How to Pay Cash for a College Education

A family with no college debt shares six tips.

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College fund savings.

Many parents want to play a financial role in paying for their child's college education, but all the other expenses that occur during the child-rearing years—mortgages, braces, and retirement savings, just to name a few—have a way of derailing even the best-laid college savings plans.

If time is beginning to catch up with you, and you fear that your dreams of paying cash for a college education are passing you by, read on for some ideas that may revive them.

JULIE:

Like many parents, we didn't have as much saved for college as we would have liked. Some of those reasons were conscious choices, such as parochial school education and family travel, and some, such as the stock market crash in 2008, were out of our control.

Still, with Lindsey about to start her junior year in college, we've been able to avoid any debt and expect that we'll be able to for the rest of her time as well. Here are the parent strategies we used that may help you, too:

1. Take advantage of any time you have left: If your child is a high school sophomore or junior, you may feel like time has run out. But even a year or two headstart can get you the edge you need to use cashflow for education expenses.

Start by cutting out all unnecessary expenses and funnel the savings into a dedicated college account. Every dollar you save is a dollar you or your child won't have to borrow.

[Learn about the college savings option many parents don't know of.]

2. Start a new revenue stream: Starting a small, part-time business or taking on a part-time job and dedicating the funds to college savings can be a surprisingly effective strategy. Since this is extra income, it won't be eaten up by everyday expenses.

When Lindsey was a sophomore in high school, I started earmarking all of my earnings from writing online into her college account. The amount I was able to accumulate surprised me.

3. Focus on low-cost college options: The private liberal arts school across the country may be out of reach financially, so make the best use of the options close to home. Start by having your child earn community college credits the summer before college, or even while still in high school.

Community college is a great option for the first two years as well. Not only are the credits cheaper, but you can skip the living expenses by having your student live at home. And if a four-year college is part of the plan, look into state schools that offer discounted in-state tuition.

[Consider saving money through out-of-state tuition breaks.]

LINDSEY:

Whether you or your parents will be footing the bill for college, the prospect of funding a four-year education can be overwhelming. You may want to attend a prestigious university, go out of state, join a Greek organization, or have other factors that increase the cost of school.

Here's how I've contributed cash for my education and avoided taking student loans: 

1. Scholarships, scholarships, scholarships: When I was a junior in high school, my college counselor told me that most students only receive 10 percent of the scholarships they apply for, so I should cast my net wide in order to increase the dollar amount I received.

I don't know whether that statistic is accurate or not, but I do know that I found lots of smaller, private scholarships to apply for that I wouldn't have known about had I not searched.

Definitely apply for those university-sponsored scholarships, but don't count on those for all your financial aid needs. Try using an online scholarship search engine or profile-building site to maximize your odds of finding scholarships for which you're extremely eligible.

2. Make finances part of your college decision: Most students consider factors such as size, academics, location, and campus feel when choosing where to go to school, but in my experience, the cost should be more important than all of these.

If you're torn between several schools or think you could get the same or nearly the same education from each of your options, let the money do the deciding for you. You may want to find the perfect school for you, but chances are there are several schools that would make you happy.

And what will make you even happier is graduating with no (or minimal) debt to your name.

[See which private colleges are the least expensive.]

3. Do your fair share: Your parents may be paying for college, but the price of college goes far beyond tuition costs. Help out by offering to pay for some smaller cost, such as books or a meal plan. Those costs can be high as well, but your help with them may be the difference between taking out loans or graduating debt-free.

[According to a recent survey, college students are paying more for their education.]

Using summer job money or taking a part-time job during the school year will help you to fund part of your education and will also make you more invested in the process. This way, you'll graduate with a better appreciation for what it took to put you through school and will be more likely to use that education wisely.