Frugal Finance and the College Student

alternatives to financing college

Much has changed in the world of higher education from a generation ago. Mainly, a university education can cost as much as a luxury automobile or a small house, and if you’re not prepared, you might be compelled to seek financial aid in the form of a loan. Of course, the problem with student loans is they tend to haunt the student long after graduation. This can be a bit like a ball and chain around the ankle, just when a young person is trying to get their first home, raise a family or otherwise make ends meet with their entry level income.

In light of the financial challenges that higher education presents, perhaps it’s time to take a look at alternatives to financing a college education that can be easier on the bank account, and a learning experience in the arena of personal finance. In some cases, college is the first time that the cost of living starts to hit home for students. In addition to tuition, travel, books, registration fees and parking fees, there are also costs associated with housing, meals and other expenses that go along with living away from home. Whether the student is prepared to face the real cost of living, or college will be their introduction, here are some ideas that can be used – alone or in combination – to support success in obtaining an education while providing a good taste of personal financial responsibility.

Start at a Community College – a lower cost alternative to a four-year university, a community college can help keep costs down while “greasing the skids” for finishing a degree program at a university. In addition to lower costs, the school will be local, so the cost of housing won’t be a financial burden. Also, with reduced fees, some or all of the costs associated with school can be made to be the responsibility of the student. Getting a start at a community college also allows the student to find their major and demonstrate tenacity with respect to studies before a larger personal and financial commitment is made at a university.

Commute to School – a great idea for those who live close to a four-year university. Following this approach, you trade the cost of housing and food for the cost of commuting. In the event that friends and family live nearby a university, this approach can also be employed for schools far away from home. Staying with friends and family can be a way to reduce living expenses and expand the potential range of schools where a student can commute as opposed to having to find more traditional student housing.

Work and Study – a more traditional way of earning income to meet school expenses. It’s also known as working your way through school. The key is to select job opportunities that might offer good experience as a complement to the areas of study. Being a waitress doesn’t help much on the resume when your course of study is law, but being a librarian for a law firm most certainly does. Also, think about bartering instead of money exchanging hands. Can you work around the house in exchange for room and board? Can you work as an assistant in an office in exchange for them paying your tuition? Investigate these opportunities as it keep money from exchanging hands, and that can be an advantage for both parties.

Share the Cost – perhaps the cost of school isn’t something that can be met by the student’s savings and income earning efforts alone. Why not create a cost share arrangement? This is a much better arrangement for learning personal finance than having someone else pay for everything. Instead of a percentage split, share the complete cost of various categories likes books, tuition, fees, and housing. Tailor the agreement such that expenses with a discretionary component are the ones borne by the student. This will naturally help the student make better decisions about just how lavish their housing, meals, transportation, and miscellaneous expenses might be.

Transition Funding – a less traditional approach to paying for school, but one that can provide a good start for the student, and transfer financial responsibility over a clearly established period. Here is a suggested approach: first year, 100% paid by the parents; second year, 33% paid by the student; third year, 66% paid by the student; and, fourth year, 100% paid by the student. This approach allows time for the student to learn how to reduce expenses, create revenue streams, and find ways to fund or offset the cost of education.

Co-op Programs – an income earning potential that often requires another year of study before graduation. In addition to helping offset the cost of schooling, co-op programs offer students a chance to graduate with an education and workplace experience and work references. Having experience and references is well worth the “penalty” of delayed entry into the job market. Typically, co-op programs are only available to juniors and seniors, but they should be on the radar screen for all students because of the value they offer in terms of offsetting the cost of education, and greasing the skids with respect to entering the job market.

Using one or more of these approaches to funding an education can help sidestep loans and grants that might not be available in the first place. More importantly, it serves as a good personal finance proving ground and educational process. In the real world, seldom is anything handed to us – we have to work for it – so there’s no sense shielding students from that reality. Instead, we might better use the opportunity to create alternative ways of funding education, that fully engage the student, so our graduates are better prepared to assume responsibility for their own financial future. At the same time, they’ll be acquainted with financial problem solving techniques.

As an employer, I like to see a can-do spirit in those whom I interview. Working your way through school and overcoming obstacles in creative ways is just what I’m looking for. And, if it takes time, effort and sacrifice to make it happen, that shows me more about an individual’s character than anything else I might learn from a resume, transcript, or interview.

If we are to instill the idea of individual responsibility, and we hope to have our children live a life with more peace of mind, and less potential for financial disaster, then it seems all the more reason to make certain that our children learn the basics of personal finance before they leave school. It’s a bit too late to be learning these lessons while trying to tackle the pressures of everyday life. What better time to learn the lessons of the real cost of living than while we’re still in school?


written by: Clair Schwan

Clair Schwan is a contributor and managing editor at, promoting personal responsibility, wise use of hard earned money, and doing for yourself instead of depending on others. He regularly writes about personal finance, self reliant living, self employment, and individual responsibility in the hopes of helping inspire others to live a more self directed, abundant and satisfying life.


Image courtesy of Ambro /

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