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11 Smart Ways to Save for College: Easy as A-B-C

by Sherri Smith, SVP of Retail Banking

College is a big investment. But whether you’re a parent or student who’s researching the costs of secondary education, it’s never too early – or too late – to start saving money for that college fund.

According to the College Board, today the annual average in-state tuition cost for public four-year colleges and universities is estimated around $10,000. If you leave the state or go to a private college, you’ll typically multiply that amount times two or three. And, unfortunately, none of those costs include room and board, books or other expenses.

So how can you make it more affordable? While you’ll typically need to cover some costs with student loans, there are several things you can start doing now to make a dent in what you’ll owe.

11 Ways to Do Your Homework on Costs

From taking AP classes to opening a Coverdell Education Savings Account (CESA), here are 11 smart tips to help prepare – and pay – for college expenses down the road!

  1. Research costs. If you know what type of degree or university interests you or your student, start by doing your research, comparing tuition, scholarships and programs at similar colleges.

  2. Consider a community college for the basics. If you’re open to starting the path to higher education at a community college, keep in mind that students can typically take general education or basic courses that will transfer to a four-year university and meet credit requirements.

    The advantage: tuition at these schools is often a fraction of the cost. As a student, you may also be able to save on room and board by taking classes close to home.

  3. Fill out the Free Application for Federal Student Aid (FAFSA®). Even if you’re not sure if you’ll qualify, submitting the application puts you in the running to receive federal grants, student loans, work-study options and even some state and school-based aid.

    Often, many families are skipping it or missing the deadline (in fact, only 68% filed in 2021!), missing out on thousands in financial aid.


    Tip: Complete the FAFSA as early as you can. Some colleges award money on a first-come, first-served basis, so the sooner you apply, the better your chances.

  4. Look for scholarships and grants.

    • Counselors: School counselors and advisors are excellent resources for different types of scholarships and aid, based on academic achievement, skills, volunteering and financial need.
    • Federal websites: Sites such as studentaid.gov and scholarships.com can also be useful to find scholarships and reduce costs.
    • Local scholarships: While smaller in amounts, local scholarships can be much less competitive. Don’t overlook scholarships from local organizations, nonprofits, places of worship or even companies that give scholarships to dependents of their employees.
    • Scholarships by college: Once you’ve narrowed down a list of universities, you can typically learn more about available scholarships on their websites or via their admissions offices, too.

  5. Take advanced placement (AP) classes if possible. AP classes are a terrific way to earn college credit while in high school, reducing the number of courses you or your student will need later.
  6. Set aside savings. It’s never too early to start saving, whether it means depositing that birthday money from your grandparents or setting aside a portion of every paycheck.


    Tip: Gate City Bank’s Minor Savings account is a great option for anyone under the age of 18, since it has no minimum balance, no fees and a competitive interest rate.

  7. Consider a Coverdell Education Savings Account (CESA). If you’re a parent or grandparent, you may want to consider opening a CESA for your child or other designated beneficiary under the age of 18. Specifically for education expenses, it earns tax-free* interest and requires a low minimum balance.


    Tip: Curious how a Coverdell Education Savings account compares to a traditional 529 savings plan? A 529 only allows reallocating funds within a select portfolio range twice per year. A CESA isn’t limited – allowing you to choose virtually any investment you like. Ultimately, it gives you more control and flexibility with your rate of return.

  8. Pursue a work-study job and/or internship. Part-time jobs are obviously great for gaining work experience and paying bills. But a work-study or internship can help with creating valuable connections for future full-time employment, too.

    Be sure to submit the FAFSA to qualify for work-study opportunities, and talk with a college advisor about any available internships.

  9. Check into employer tuition assistance. From Target to Starbucks to Amazon, a growing number of companies are also providing tuition reimbursement programs for employees.

    Federal tax law allows employees to get up to $5,250 in tuition reimbursement tax-free from their employer every year. While it varies by company, this can be especially helpful for students who are juggling a few classes while working full-time.

  10. Test out of college courses. While it varies by school, students can sometimes test out of general education courses by taking College-Level Examination Program (CLEP) exams. The CLEP program is designed to give course credit based on test performance, and it only requires a small fee – usually less than $200 per exam.

    Talk with a college advisor to discuss whether this may be right for you or your student!  

  11. Choose federal loans before private ones. And finally, if you need to borrow to pay for college, remember that federal loans offer more benefits than private loans, such as loan forgiveness programs and repayment options based on income.

Put Your Questions to the Test

Have any questions or want to learn more about different savings accounts? Stop by one of our convenient locations, or give us a call at 701-293-2400 or 800-423-3344. We’d love to help!

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*Consult with a tax professional to understand what impact CESA may have on your tax situation.


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