How to Save for College: 10 Essential Tips

Saving for college isn't easy. Learn key money-saving hacks, such as earning college credit in high school and opening a college savings account.
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  • Tuition costs have risen sharply in recent years, leading to a college affordability crisis.
  • You can estimate how much to save for college by analyzing the average costs of tuition and supplies.
  • Saving now is key — consider looking into scholarships, part-time jobs, and college savings accounts.

Over the past few decades, the cost of college in the U.S. has skyrocketed, creating a college affordability crisis. The situation has left many wondering how to save for college without racking up huge amounts of student debt.

According to the College Board, the average cost of tuition and fees for a full-time undergraduate at an in-state, four-year, public university is $10,740 for 2021-22, up from $5,720 in 2001-02. Private, four-year colleges cost even more — an average of $38,070 for tuition and fees, up from $26,380 two decades ago.

Multiply these costs by four years and you're looking at total expenses ranging from around $40,000 to about $150,000 per student — and that's excluding expenses like room and board.

It's easy to understand why Americans have accrued $1.75 trillion in student loan debt. Fortunately, there are several strategies students and their families can use to grow their college funds, minimize debt, and eliminate the stress around being able to afford college.

How Much Should You Save for College?

How much you should save for college depends on the type of college you want to attend, where you plan to live, your family's financial situation, and how much money you can expect to receive in financial aid.

To figure out how much to save for college, add up your estimates for how much you'll pay in tuition and fees, room and board (if applicable), and school supplies for all four years. Then, from this sum, subtract the total amount of financial aid you expect to get (including grants and scholarships), again for all four years.

You can estimate the amount of federal student aid you're likely to receive with the Federal Student Aid Estimator tool.

For example, say you plan to attend a public, in-state college. In this case, you can expect to spend — over the course of four years — around $43,000 on tuition and fees, $5,000 on books and supplies, and $48,000 on room and board. Altogether, this comes out to $96,000.

Say you also received $8,000 in grant aid per year, or around $32,000 for all four years, and a $5,000 scholarship for your first year only. This comes out to $37,000 in financial aid.

By subtracting your total financial aid amount ($37,000) from your total college expenses ($96,000), you get $59,000, i.e., the amount you'll need to save for college.

10 Essential Tips for Saving for College

Now that you know how much to save for college, how can you reach your goal — especially if you're a student trying to save money on your own? Is there a single best way to save for college?

Below, we go over 10 ways to save for college. Remember that even if you don't meet 100% of your goal, every dollar saved is one less you'll have to borrow.

1. Apply for Scholarships

While scholarships usually don't cover the full cost of tuition, they're a great way to supplement your savings and reduce student debt. It's best to start applying for scholarships in 11th grade.

We created a list of the best resources you can use to find scholarships to apply for. Be sure to also look for local scholarships offered in your community.

2. Take AP, IB, and/or Community College Classes

High school students can take Advanced Placement, International Baccalaureate, and community college courses to earn college credit. Doing this allows you to skip some general education courses your first year of college, thereby bringing down tuition costs.

3. Put Your Savings in a CD Account to Earn Extra Interest

According to the FDIC, regular savings accounts earn an average of only 0.06% in interest per year, whereas CDs average anywhere from 0.03% for a one-month CD to 0.28% for a 60-month CD.

A CD, or certificate of deposit, is a type of savings account with a fixed interest rate over a specific time frame. While you'll likely find rates far above the national averages by shopping around with lenders online, CDs generally offer higher returns than interest savings and checking accounts.

If you won't need your college savings for a few more years, it's a good idea to put any money you accumulate into a long-term CD. This way your money can grow risk-free.

If you'll need your money relatively soon, moving your funds into a one-year CD from a regular savings account should give your returns a boost.

4. Enter Contests to Earn Cash

Many youth organizations run competitions for high school students in which winners receive monetary rewards. YoungArts' National Arts Competition, for example, offers awards up to $10,000.

By entering contests, you can bolster your resume and maybe even earn some extra cash for covering college expenses.

Here are some other contests to check out:

The learning doesn't need to stop here

Explore the rest of our collection of financial education resources to continue your journey to a healthy financial future.

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5. Use the Upromise Mastercard to Earn 529 Cash

The Upromise Mastercard allows you to earn 1.25% cash back on all purchases, money which then gets deposited directly into a 529 account, a type of college savings plan.

If you can't get approved for this card on your own, consider asking a parent or guardian to sign up or co-sign for you. Family members can also use their rewards to contribute to your plan.

6. Open a College Savings Account

Many college savings accounts, such as Coverdell ESAs and 529 plans, offer unique benefits like tax-free growth and withdrawals while having minimal impact on your financial aid eligibility.

7. Sell Stuff You Don't Need

Have a bunch of gently used items you no longer need, such as clothing you've outgrown, old electronics, or sports equipment? Put it up for sale and save the money you earn for your college. The whole family can even pitch in by cleaning out their closets and hosting a garage sale.

You can also advertise your items online through Craigslist, Facebook Marketplace, Etsy, and eBay.

8. Ask Family Members to Contribute

Instead of receiving gifts for your birthdays and graduation, kindly request that your friends and family donate money to your college fund. Many 529 plans have gifting platforms that allow relatives to make secure electronic deposits. They can also simply send cash or checks.

9. Get a Part-Time Job

Picking up a part-time job after school or during the summer is an excellent way to save for college. Common gigs for high school students include babysitting, becoming a lifeguard, mowing lawns, tutoring, bussing tables, and working for a local business owner.

10. Automate Your Savings Contributions

Automating your savings contributions so that they come directly out of your paychecks is extremely helpful when it comes to saving for college. You'll see the reduction as just another monthly expense and get into the habit of setting money aside.

You might even ask your parent or guardian to do the same, too.

DISCLAIMER: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.

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