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What is Reasonable and Affordable Debt?

College costs continue to increase year after year, with no end in sight. There are, however, a few ways you can cut college costs without sacrificing college quality.

Here are 10 tips to help you cut college costs:

1. Enroll at a less expensive college.

An in-state public college can cost half to a third of the cost of a private non-profit college, even if you get no financial aid. There are also six dozen colleges with generous “no loans” financial aid policies that replace loans with grants in the financial aid package.

But, think twice about taking a detour through a community college on your way to a Bachelor’s degree, or you may miss your destination. Among students who seek a Bachelor’s degree, only a fifth of those who start off at a community college obtain the Bachelor’s degree within six years, compared with two-thirds of students who start off at a 4-year college or university. 1

2. Get college credit in high school.

Take AP, CLEP, PEP and IB classes in high school to earn college credit before you enroll in college. These credits will usually substitute for general college credits, as opposed to prerequisites, but nevertheless can help you graduate earlier and save you money.

3. Focus on free money first.

Search for scholarships using free web sites like Fastweb.com and the College Board’s Big Future. Apply to every scholarship for which you are eligible. Continue searching for scholarships even after you are enrolled in college. About 1 in 8 students wins private scholarships worth about $4,000 a year and about 1 in 500 students wins more than $25,000 in private scholarships. 2

4. Apply for financial aid.

File the Free Application for Federal Student Aid (FAFSA) as soon as possible on or after the October 1 start date. Students who file the FAFSA during the first three months get twice as many grants, on average, as students who file the FAFSA later. You can’t get aid if you don’t apply.

5. Claim credit for tuition and textbooks on your tax returns.

The American Opportunity Tax Credit provides a tax credit worth up to $2,500 on your federal income tax return, based on amounts you spent on tuition and textbooks. There’s also an above-the-line deduction for up to $2,500 in interest paid on federal and private student loans. Both the tax credit and deduction only apply to families who meet the income limits.