How to Find Cash When the College Bills are Due

What can you do when it's too late to start that college savings program? Perhaps you always meant to open a 529 account for your child, but life intervened. Now he's gotten his acceptance letters, he's chosen his college and the bursar's bill is in your mailbox.

It now takes an average of $35,636 to cover tuition, fees, room and board at a private college and over $15,000 for an in-state public school, according to the College Board. And that doesn't even count pizzas and iPads. You'll spend more than $50,000 a year to send your child to the most expensive schools like George Washington University and Kenyon College.

That's more than most families can reasonably save, even if they started with a 529 college savings plan and the best of intentions. And it's certainly more than most college students can earn in their spare time. So much for the "work your way through school" parable that parents like to tell.

But there are some other sources of money out there, and there's little doubt that a college degree is a worthwhile investment. Here's how to squish those bills down to size and find the cash you need to pay them. Be very open minded about the college path. You can save significant amounts of money by considering alternative approaches to college. Your child can start at a cheap school or community college and then transfer to the in-state flagship for junior and senior year. They can pile up advanced placement credits in high school and summer school, and cut the number of full semesters you need to pay for. They can take a gap year between high school and college to work, earning and keeping as much as possible. They can pass on their pricey "first choice" and go to the school that's willing to pay to keep them there.

Apply for financial aid, even if you think you won't qualify. You may be surprised at how much your family can earn and still qualify for financial aid. Fill out the Free Application for Federal Student Aid (FAFSA). If you're planning on a private school, fill out the College Board's profile form too.

Search for scholarships. There are thousands of them listed on (, but don't stop there. Scholarships from the local PTA or boosters club might be easier to get than the big national awards. Look for scholarships awarded by the professional association of your intended major.

Take Federal Stafford loans. If there's a gap between what the school charges and what the FAFSA says your family can afford to pay, the government will fill it with subsidized Stafford loans. The on those loans is 4.5 percent, and that's a fixed rate for the life of the loan. The Feds will pick up all of your interest until you graduate. All of those loans come directly from the Department of Education through the direct loan program.

Hit up your relatives. Grandparents can pay money directly to colleges without running over federal tax-free gift limits. Parents can take a federal Parents Loan for Undergraduate Students (PLUS) loan for as much as is needed; they are also available through the Department of Education's direct lending web site.

Borrow against the house, if you can. Not everyone has enough home equity to secure a loan, but right now interest rates on home equity lines of credit are running around 4 percent or less. If you have an old line of credit, it may be charging less than 3 percent interest. That's better than the rate on most education loans, and a reasonable way to finance a big, important expense.

Take a private loan. This is a last-ditch measure, because piling on more debt than the Feds will give you (a total of $31,000 for four years of school) will crimp your post-college style. With big private loans you won't be able to spend that year traveling after school or volunteering for some low-paying good works. You'll have to hurry into a big-salary job to start paying back the banks. If you still want to do this - say you're an engineering major and aren't worried about the job market - comparison shop at and at your local credit union. Get your parents to cosign for the best possible rate.

Pull out all the other stops. Hold yard sales. Wait tables. Tutor high school students. Consider - after all, drastic times call for drastic measures - skipping the spring break trip and using that money to buy books in the fall.