This post 3 Secrets to Slashing College Costs appeared first on Daily Reckoning.

A recent survey by the College Board revealed the budget for an in-state public college last year averaged $25,290.

And a moderate budget at a private school last year averaged $50,900.

Suppose you have three kids bound for college a decade from now. At the rate which college tuition costs are rising and tuition aid formulas changing, you're looking at spending, over the course of 4 years, close to $900,000!

If you can't figure out how to slash the costs of your child's education, you're going to get crushed. And good luck asking your boss for a $1 million bonus.

Lucky for you, I've been doing some research on this and found three ways I believe you can significantly lower the costs of getting your child a post-secondary education. Here's what I found:

Section 568 Loophole

A college will use one of three different aid formulas to determine how much of a price break you deserve. The Section 568 formula, used by a small but impressive group of schools, including Dartmouth, Duke and MIT, has an interesting loophole that involves the value of your home.

For schools that follow Section 568, the home equity that goes into calculating your net worth is capped at 120% of your income. Here's why this matters:

Take a family with an income of $150,000 per year and a daughter applying to two schools on the Section 568 list. They have a mortgage of $500,000 left to pay. If this family inherits a decent chunk of money, maybe from a relative passing, they have a few options. They can save and invest the money, spend it, or pay down their mortgage.

If the family decides to leave the money in their bank account, their daughter won't qualify for any aid. But, if the mortgage is paid off, this girl could receive close to $20,000 of aid per year! So if you have extra cash, consider paying down your mortgage faster if your kid is applying to one of the school's on the Section 568 list.

State School Advantage

Another way to save on tuition costs is take advantage of state universities. I don't recommend you up and move your family to save on college but if you're already considering a new job or potential job transfer to a different state, take the state university into consideration.

Some states offer huge cost advantages to residents. For example, the University of Texas at Austin slashes approximately $24,000 off the cost of the tuition bill per year for Texas residents. If you have two kids attending college at the same time, there's potentially $192,000 in savings over the course of four years.

What if your kids want to stay close to home? There's no guarantee your child will want to go to school close to home but some gentle persuasion may be in order. If you decide to make moves when your kids are in high school, make sure you know the state's rules. There is usually a minimum residency of 12 months before classes start.

Part-time Student Hack

I saved the best for last. What should you do if you have a child who has their heart set on an expensive, four-year school (whether in-state, out-of-state or a private school)?

The answer is two part. First, have them register for only a few classes at their choice four-year school, qualifying them as a part-time student there. This will save you a ton in tuition cost. Second, supplement that by taking online classes from any school that offers the classes they need at the four-year school that will be accepted.

The benefits are as follows: your child still gets to live on campus and have the college experience they were hoping for but at a fraction of the cost since they'll be taking courses from two schools.

Here's why this plan works. Most schools have one full-time rate that covers anything over a certain number of credit hours. Take the University of Minnesota (UM) for example. For 13 or more credits (what's considered full-time) a non-resident cost is $14,368 per semester.

One way to cut costs would be to take as many credits as possible, say 18, because the price is the same. But rather than overload your child with courses to max out on tuition, a better approach would be to take two three-credit courses at UM.

This would qualify your child as a part-time student and now be charged per credit. For the class of 2022, the per-credit cost is $1,105. Your UM bill for a part-timer taking six credits per semester would be $6,630.

If you supplement those courses by taking three three-credit courses online from a community college, for example the College of DuPage offers online courses to residents for $500 per course, you'd be looking at $1,500 for nine credit hours. Add the $1,500 to the $6,630 and you get $8,130, or nearly half the cost of full-time tuition!

Now imagine doing that for the first couple years of college while taking basic courses at your local community college. The savings add up fast! This hack applies to almost any four-year school. Keep in mind however that most colleges mandate the last 30-60 credit hours be taken at their school in order to receive the degree.

If you're worried courses won't transfer to the four-year school, you can easily check ahead of time before registering. A lot of schools have websites that help you check this, or you can speak with an adviser. Another great resource is Transferology, a website you can search every university that has a class that will be allowed at the college your child attends to meet the course requirement.

There's no question the cost of going to college is out of control. But if you can learn to navigate the systems in place, you can slash the bill significantly.

To a richer life,

Nilus Mattive
Editor, Rich Life Roadmap

The post 3 Secrets to Slashing College Costs appeared first on Daily Reckoning.