Reuters Money

I can hear the quaver in the voice of my neighbors as they send their children off to college this week. Not only do I sense the emotion of having a child leave home, but the anxiety of what it’s going to cost.

The financial part, at least, doesn’t have to cause insomnia. There are a number of routes to find money for college that few explore. Yet you have to plan ahead to find these sources of cash.

Few comprehend that the rate in increase in college costs has outpaced consumer inflation by a factor of two — from 5 percent to 8 percent. That’s why some 73 percentof families surveyed by student lender Sallie Mae reported that they were either reducing spending or working more to pay college bills.

With most big states experiencing fiscal crises, state schools, which used to be relative bargains, have been increasingly exposed to college inflation. They’ve had to jack up their tuition bills to cover their expenses.

It’s unlikely that state schools will resolve their fiscal shortfalls any time soon as the housing crisis has devastated state tax revenues.

How about private colleges? They are already charging top dollar — an average $26,273 for tuition alone for the 2009-10 school year, according to The College Board. Combined with room and board and other fees, private colleges are easily billing between $30,000 and $50,000 a year.

But there are a number of ways to cut bills. Here are some of the least known:

*Ask for a Tuition Discount. Most colleges don’t call it this and certainly don’t advertise the fact that they offer reductions from their “sticker” price. Once you’ve completed financial aid forms, ask for additional money off. Always cite special circumstances — loss of parental income, unreimbursed medical care. Put everything on the table and ask for work-study programs and grants (which don’t have to be paid back).
*Go to Community College First. This has become an increasingly popular option. Most colleges have the same core requirements that can be taken at community colleges for a fraction of the cost. Students can also stay at home so you don’t have to pay room and board. About one-third of all college students go the community college route, which charge an average $2,544 annually.
*Grandparents. They can help by either directly paying tuition bills or contributing to a 529 college savings account. While they don’t get a tax deduction for their contribution, the money grows tax deferred in the 529 until it’s withdrawn.
*Hidden Grants and Loans. Do you belong to an ethnic group or service organization? There are thousands of groups that offer scholarships and grants. A great source is the database at www.finaid.com. There’s more than $3 billion available, so do your homework once you get accepted.
*Network. Who in your network can help you? Employers may offer assistance. Affinity groups may have grants. Contact the college to see if departments offer special programs for students in specific majors. Peer-to-peer lending is emerging as an alternative. These networks offer access to direct lending. See www.lendingclub.com, www.prosper.com and www.Greennote.com.

None of these options present easy-money solutions to college financing.

You’ll have to get ahead of the game well before you send out entrance applications; research and negotiations take months to yield results. (Community college is always a viable fall back at the last minute, though).

Going into debt for a six-figure education will set young adults behind if they want to buy a car, home and live a sustainable, happy life. In order to get a decent education, you’ll need to first educate yourself on the myriad opportunities to avoid that debt trap.

John Wasik is the author of “The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream.”
Photo caption: Graduates of Columbia University during the commencement ceremony . A college diploma has long been the ticket to a good job, but the deepest economic slump in decades has dampened the dreams of many college seniors.