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Special section Save more, spend less in '07

Here are 10 ways to pay for college without relying on loans.

10 alternative ways to cut college costs

If your federal financial aid award left you feeling a little high and dry, don't sweat it. Uncle Sam is just one source of funds to tap for college. From cashing in on your company's tuition reimbursement program to attending a work or co-op college, there are lots of ways to pay for college without ever touching the Free Application For Student Aid, or FAFSA, form.

College alternatives
There are at least 10 alternative ways to pay for college without having to apply for loans.
Savvy ways to slash college expenses
1.Get college credit in high school
2.Cash in on tax credits
3.Get rewarded for your service
4.Work for the college itself
5.Transfer from a community college
6.Pay lower prices at out-of-state schools
7.Tap home equity
8.Qualify for free money as an independent
9.Work your way through a "work college"
10.Move out-of-state for a year

1. Get college credit in high school
The easiest way to avoid getting hit with a two-ton tuition bill is simply to cut down on the amount of time you're in school. Motivated high school students can earn up to two years' worth of college credits by taking upper-level courses that offer both high school and college credit. Students can earn college credit in one of three ways -- through advanced placement, International Baccalaureate, or through dual enrollment courses. Beyond looking good on your college application, AP, IB, and dual enrollment courses cost significantly less than traditional college classes (usually $100 or less per class) and oftentimes are paid for directly by the students' high school, county or state.

Susan Nesbitt-Perez, vice president for outreach and financial aid for the Commission on Independent Colleges and Universities, warns students not to automatically assume that all of their credits will be transferable. "Every college is different, which makes transferring credits very challenging," she says. "If students know where they're applying, they should call and ask whether or not their courses will transfer."

Nesbitt-Perez also warns students not to overload themselves on college-level courses. Earning poor grades in these courses can lower your GPA and potentially make you ineligible for merit-based financial aid.

2. Cash in on tax credits
Scholarships, grants and loans aren't the only ways the federal government helps out. Educational tax credits can save you thousands.

"What students need to know is that there's the Hope and the Lifetime learning tax credits," says Joseph M. Re, author of "Financial Aid Financer: Expert Answers to College Financing Questions."

"If you play those right, you can pick up $7,000 from Uncle Sam (over a four-year period) to pay for college."

The Hope credit provides a $1,500 tax credit for each student for the first two years of college, as long as you are the one paying for college -- rather than the federal government or private financial aid. (Parents who claim the student as a dependent on their tax return would be eligible for the credit.) The key to taking advantage of this credit, Re says, is to plan ahead and be aware of the stipulations.

 
-- Updated: Dec. 29, 2006
 
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 RESOURCES
Tax credits help with education costs
Education loans provide a tax break
The skinny on levelized tuition plans
 TOP PERSONAL FINANCE STORIES
Video: Tax breaks for students
Tax breaks for students
Combine 529 plan with other credits




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