11 Ways Parents Can Help Kids Cut College Debt Now

Here are some cost-cutting tips from students and college financial aid people.

Parents who purchase prepaid tuition credits should plan ahead to avoid surprises when their child gets to college.
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Financial planners will give you a quick list of the things you must absolutely do to pay for your child's college (529s, Stafford loans, Coverdell savings accounts, savings Bonds, home equity loans) but sometimes their advice is hard to follow in the time frame you have—and often they involve piling on more debt.

Students already are choking on $1 trillion in loan repayments for college. Parents spend and borrow huge amounts beyond that. But what can you do in the near-term to make the funds you have go further?

With help from students and college financial aid officers, we've compiled 11 tips to cut college costs and avoid borrowing more:

When shopping for a school, get past the sticker price. "It really is like buying a car," says Chanel Greene, manager of the office of financial aid for Peirce College in Philadelphia. "People look at the sticker price and get shocked and say I am not going there. But like cars there are lots of option." There are rebates and scholarships nearly every school offers or knows about. Saving on college costs requires that you "look beyond fees and tuition. It's really never as simple as comparing apples to apples," Green says. Cost-effective education plans are even more complicated than car deals. Consider all of the options.

[See How One Woman Wiped Out $80,000 in Credit Card Debt.]

Live off campus. This might rank lowest on parent's cost-saving lists. But it's more than an off-campus party pad and potentially the biggest moneysaver on the list. The College Board says the amount colleges charge for room and board has jumped 65 percent over the past decade—about twice as fast as inflation. Boomer parents who opted for dorm life when they went to school a generation ago often paid below-market rates. Not true anymore. "You can share a place and really cut down on rental costs, and you also pay less for things like food if you share with roommates," says David Ellman, a Brown University student now taking time off to work on a social media startup.

Take that year abroad. The dream of jetting off to Paris for a café-society semester at the Sorbonne or zipping down Florence's narrow streets to get to class at the Academy of Arts was a luxury purchase then. Not any more. With American colleges the most expensive in the world, students can save by taking that year abroad, even with transportation costs included. Becoming more popular are Latin American destinations like Chile, Costa Rica, Brazil, and Argentina, and further-flung places like South Korea, India, and South Africa, as students seek out less expensive and more exotic study-abroad locations alongside with old favorites like Britain, France, Italy, and Spain, according to the Institute for International Education. In a global economy, the experience often pays dividends in the job world. But smart shopping is essential since fees vary widely. It's also a good thing to consider in your initial college search: Some U.S. schools assess fees while students study abroad.

Don't assume your income is too high for financial aid. "It's one of the most common mistakes. There is no real 'cutoff' for financial aid assistance," says Peirce's Greene . "Everyone should fill out the FAFSA (Free Application For Federal Student Aid) regardless of income level." "There are a lot of factors we take into account," she says. Sometimes they are not even part of FAFSA. The college where she works is a low-residency school where many adults attend and parents often don't know that their own school costs can be a factor in weighing their children's financial awards.

Return unused loan money. Students will sometimes qualify for loan refunds if they do not use the funds during a financial aid period. Some see it as a kind of tax refund to be treated as a bonus for travel, or to reinvest in costs not directly related to their degrees. Either way that loan adds to total debt. Greene recommends that students return them when they don't use them for school costs.