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How Community Colleges Save You Money

Save Money AND Decrease Your Dependence on a Student Loan

According to the U.S. Federal Reserve system, as of November 2020, Americans owe $1.7 trillion in student loan debt. That is how profound the student debt problem in the U.S. has become. To put it in even more perspective, that is about $732 billion more than the total credit card debt in the U.S. of $868 billion. Experian reported in July of 2019 that student loan balances have increased 116 percent in the previous decade, with an average loan balance of $35,359. At the same time, the percentage of borrowers who owe more than $50,000 has tripled.

Benefits of Community College

Community college provides students with several options for career training and degrees. Here are some benefits of community college:

Lower Fees and Tuition

Regardless of your major or the college you attend, your first couple of years will primarily consist of the same type of classes.

For instance, each freshman and sophomore will take:

  • English 101
  • U.S. history or civics
  • Chemistry or biology
  • College-level math

When you attend a two-year community college, it allows you to take your basic classes and get them out of the way. At the same time, you will save a substantial amount of money.

As an example, College Tuition Compare shows that Ivy Tech, a community college in Indiana, has in-state tuition of just over $4,500 per year.

That compares to $10,947 for Indiana University (Bloomington) and $9,701 for Purdue University (Main Campus), the two largest state colleges, and $55,553 for tuition at the University of Notre Dame, which is a private college.

Going down the community college path will decrease how much money you will need to borrow when transferring to a four-year college. You will still be able to apply for financial aid and scholarships for community college, further lowering your attendance cost.

Lower Living Costs

After heading off to college, the costs you will need to consider will not be just tuition. You will also need to think about the additional costs of things like:

  • Living expenses
  • Car maintenance
  • Gas

If your school is in a different state, you will need to tackle paying for a dorm room or apartment.

However, if you attend a community college for two years, that means you may be able to live at home and save yourself hundreds of dollars every month in utilities and rent expenses. While it might not be as exciting as living in your own dorm room away from home, graduating with over $40,000 in debt is not that exciting either.

Greater Flexibility

Imagine if you were to pay a high price at a university and then realize the major you initially chose does not prepare you for what you wish to do. Even though you can still change your major, it could turn out that many of the classes you have taken will not count towards your new major. This is a great deal of money down the drain.

Going to a community college allows you to see how it goes for a little bit at a much lower expense than going to a four-year university. Explore various fields or classes to decide if your chosen major is really the one you want to pursue after all.

How Do You Save Money?

College is costly, and not all families can afford to save for a four-year college. Learn how a community college could help you bring costs down so you can save money:

  • You could save a portion of your job earnings and put it into a 529 plan. The 529 plan earnings grow tax-free. You might also qualify for an extra state tax credit or state income tax deduction for your contributions.
  • Start to look and apply for scholarships. Around 12.7% (one in eight students) in Bachelor’s degree programs pay their costs using private scholarships.
  • Ask family and friends for contributions to your 529 plan instead of holidays, birthdays, and graduation.
  • On October 1, the year before attending college, fill out a FAFSA. Every year, millions of students fail to complete FAFSA, and they could have qualified for financial aid.
  • If required, take out student loans in a reasonable amount. You should borrow no more than what you expect your first year on the job out of college salary will be.

Transferring to a University

An associate’s degree from a community college may be sufficient for you to pursue your chosen career. In many cases, however, you will need to further your education and obtain a bachelor’s and maybe even a master’s degree.

Going to a community college for a couple of years and then transferring to a university has benefits for any education plan. The costs of tuition and other fees are substantially lower for community colleges than those of private and public universities.

If you have a target university in mind, make sure to research course requirements and whether the course work you take at the community college level is transferrable to that University. Most state higher education systems offer clearly defined transfer routes from a community college to a state university. Make sure your community college course work meets their transfer criteria.


Community college can be the ideal choice if you are looking to save money and decrease your dependence on a student loan. It is also a great way of easing you into college life and building successful learning strategies before you transfer to a more costly university.

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