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7 Alternative Ways to Pay for College

By Lucy Lazarony • Bankrate.com

The news on college costs is mighty grim, but there are plenty of creative ways to keep your college dream on track.

Dwindling state and federal aid, lower endowments and drops in fund raising have forced many colleges and universities to raise tuition prices and cut back on financial aid programs.

What's a cash-strapped student to do?

Never Give Up on Scholarships

You don't have to be a stellar student to land a big scholarship. Unless it's strictly an academic scholarship, your grades don't really matter. As long as your grades make the cutoff, often a 2.5 GPA or higher, you have as good a chance as any applicant of bagging a scholarship.

And there's no reason your scholarship search can't continue through four years of college.

"It's really just beating the bushes," says Barbara O'Brien, director of college bound marketing for Sallie Mae's planning-for-college destination, CollegeAnswer.com.

The Web is a great way to get started. Check out individual college Web sites, and search for scholarship sources on sites such as FastWeb, College Board, Wiredscholar.com and ScholarshipCoach.com. Avoid sites that charge you to search for scholarships.

Don't overlook local sources of scholarships. Community-based awards may be smaller, but they're also easier to win.

"College Answer has the largest online scholarship database containing more than 2.4 million scholarships worth more than $15 billion in funds," O'Brien says. "Students should look to organizations such as the Kiwanis Club, YMCA, parents' employers and area businesses."

You can learn about local competitions at the public library and at the guidance office at your local high school.

It's time to pull out all the stops. Be flexible. Be determined. Be willing to give the unusual a try.

Here's a roundup of some offbeat and overlooked strategies for pursuing and paying for a college degree.

1.     Accelerate your degree
Accelerated classes cram a semester's worth of material into six- or eight-week sessions. The classes, while intense, can really help to move up your graduation date. You land the degree you want at a much lower price.

Tuition in an accelerated degree program at Albert Magnus College in New Haven, Conn., is about half the cost of its traditional degree program. And many schools offer bachelor's degree programs in three years instead of four.

For students on the physician track, George Washington University in Washington, D.C., offers a seven-year program integrating a bachelor's degree with a medical degree, saving a full year's costs.

At Seton Hill College in Greensburg, Pa., a student can earn a bachelor's degree and a master's degree in elementary art education for the price of a bachelor's degree.

An accelerated degree program is a great option for a student with a clear career goal. If you're ready to work hard, why not put your college education on the fast track?

2.     Be a transfer student
Consider the power of credit transfer.

In many cases, credits earned at a less-expensive college or university can be transferred and applied toward a degree from a pricey, elite school. You could earn a prestigious diploma at a fraction of the price.

So why not attend a community college for a couple of years and then transfer to your dream college? It's not as if the fancy diploma you'll hang on your wall will say "transfer student."

Taking the transfer-student route will save you some serious cash. Every credit earned at a low-cost community college could save you hundreds of dollars in tuition. Also, by bunking at your parent's house, you could knock down your room-and-board charges to zero.

"You get some of your core curriculum out of the way for a cheaper price," Cooper says.

The first step is learning about articulation agreements at your dream university and nearby two-year colleges.

An articulation agreement specifies which community college course credits will be accepted toward a bachelor's degree at the four-year college or university. It also outlines scholarship requirements and specifies what kind of grades a student must achieve to transfer to the four-year school as a junior.

3.     Go where you're wanted
Somewhere out there is a college or university that's dying to have you as a student. Find that school, fire off an application and watch the cost of your college education drop.

"Every student is a star at the right college," says Ray Loewe, president of College Money, a Marlton, N.J., financial planning firm specializing in helping parents pay for college.

And star students get deep discounts for their education. A college that really wants you will find the aid and scholarships to keep you.

"Colleges know what they want, and if you fit their criteria, they're willing to pay," Loewe says.

The trick is finding the school that considers you a star.

Peruse college guides. Do your grades and SAT scores match or exceed the average marks of the current student body? Does the college offer the courses you want?

If so, this could be the school that rolls out the red carpet for you.

"Choose a college where you fit in the top 25 to 30 percent of a class," Loewe says. "Obviously, the higher you are the more the school wants you and the better position you're in."

Not sure where to start your college search? Begin by checking out smaller, regional colleges in your area. An excellent but less-known college may be searching for a student just like you.

4.     Choose a tuition-free school
Overwhelmed by tuition prices and the prospect of paying massive student loans after you graduate? Why not attend a tuition-free school? You get the college education you want without the hefty price tag. The catch? You may have to work. Some schools require students to work 10 to 15 hours a week on campus and in jobs related to their majors.

Tuition-free colleges include The Cooper Union in New York, N.Y.; Webb Institute in Glen Cove, N.Y.; Berea College in Berea, Ky.; College of the Ozarks in Point Lookout, Mo.; and Alice Lloyd College in Pippa Passes, Ky.

5.     Get a sponsor
Can’t quite swing the cost of college? Federal student loans are the best way to go when borrowing money for school. The government sets the maximum rate of interest and any qualified federal loan lender is able to charge less, such as MyRichUncle. The company provides federal Stafford, PLUS and Graduate PLUS student with upfront interest rates that start at repayment. There are no minimum number of on-time payments to qualify and this interest rate cut will never be taken away from the borrower, so long as they don’t default of their loan.

“Debt should be avoided at all costs,” says Raza Khan, president and co-founder of MyRichUncle. “But when you need to borrow, you should shop around for the lowest rate possible.”

6.     Lock in tuition
Can't stand the way college tuition keeps shooting up? Consider locking in a single tuition rate for four years.

The tuition rate you pay as a wet-behind-the-ears freshman is guaranteed until you graduate. No more losing sleep over skyrocketing tuition costs.

Colleges with locked-in tuition programs include Anna Maria College in Paxton, Mass.; Baylor University in Waco, Texas; Centenary College of Louisiana in Shreveport, La.; Concordia University in River Forest, Ill.; Hardin-Simmons University in Abilene, Texas; Huntington College in Huntington, Ind.; Urbana University in Urbana, Ohio; the University of Charleston in Charleston, W.Va.; and New York's Pace University.

Some schools offer guaranteed-tuition programs for free. Others charge fees. Be sure to check.

7.     Work off debt with community service
Got your degree? Why not do some good and wipe out a big chunk of education debt at the same time?

Recent college grads can cancel part or all of their federal-education debt by working in public-service jobs -- lower-paying professional jobs that serve low-income communities -- or by volunteering.

Loan-forgiveness programs are available to everyone from teachers to nurses to young doctors and lawyers to Peace Corps volunteers.

Teachers who work in low-income elementary or secondary schools may be able to cancel as much as $5,000 of their federal Stafford loan debt.

The National Health Service Corps offers loan-forgiveness programs to physicians, nurse practitioners, physician assistants, midwives, dentists, dental hygienists, psychologists and therapists who work for two years in communities in great need of health professionals.

Similar programs are available to attorneys who pursue public interest careers. About 50 law schools offer loan-forgiveness or loan-repayment assistance programs. The National Association of Public Interest Law has a list of the schools on its Web site. The site also lists state and employer loan-repayment-assistance programs.

Several volunteer organizations also provide assistance with student loan debt.

Peace Corps volunteers who complete a two-year term can wipe out 30 percent of their Perkins loans' balance. Student loan payments may also be deferred while serving in the Peace Corps.

Members of Americorps and Volunteers in Service to America receive educational awards of $4,725 for each year of service. These awards can be applied to student loans or future education expenses.