Big choices, big financial fallout: Tips to navigate the costs of college

As high school seniors make their pick about which university they’ll be attending in the fall, this is also the time of year when countless young adults (and their parents) are coping with major sticker shock.

That’s because the price of college keeps climbing higher. The annual cost of tuition and fees for a four-year, in-state college (not including room and board)? It’s now $11,950, according to the College Board’s most recent Trends in College Pricing survey.

Out-of-state? More like $31,880. And private, nonprofit colleges will set you back an astronomical $45,000 a year.

Numbers like that are why national student debt has ballooned to $1.66 trillion, with 9.6% of balances more than 90 days delinquent, according to the latest data from the Federal Reserve Bank of New York. 

That’s why such a big financial decision, whose ramifications will ripple throughout your life for decades, shouldn’t be taken lightly.

“For students, this is often their first major financial decision,” says André Small, a financial planner in Houston. “They need to understand the total cost, not just tuition, and how any borrowing today affects their future flexibility. The goal is to approach college funding with a plan.”

Here’s the good news: If you put together a thoughtful strategy, and get proactive about taking steps early, the financial hit will be much less. Every single dollar you can save now, as opposed to borrowing with interest, will lighten the burden on your future self and open up more career possibilities, when you’re not handcuffed by huge monthly payments.

Here are some action steps for doing the math, minimizing the financial damage, and prepping for a financial launch into adulthood.

-Fill out the FAFSA. It’s the Free Application for Federal Student Aid that gives universities an accurate view of your family finances, and unlocks access to grants and loans. It’s open now for the coming school year of 2026-27, at https://studentaid.gov/h/apply-for-aid/fafsa.

It is true that the deadline for this form isn’t actually until June 30, 2027. But keep in mind that many pots of student aid are first-come, first-served – and when they’re gone, they’re gone. So you would be much wiser to fill the form out now, so the institution can offer you as much aid as possible.

-Search for scholarships. Federal grants are key, but they are only one of the funding sources available. Private scholarships at sites like Fastweb, Scholarships.com, and Big Future (a College Board service) can also be a lifeline for students.

The challenge here is figuring out what’s available, and whether or not you’re eligible. So enter your family’s data at the sites above – Fastweb, for instance, has a database of 1.5 million scholarships valued at $3.4 billion – and they will generate a list of which ones are a match.

The key is to take this step earlier rather than later. “For parents it’s important to prioritize funding sources in the correct order,” says Small. “Start with scholarships if available, and grants, and savings, before taking on any debt.”

-Set up your financial life. Freshman year of college is when most students are striking out on their own for the very first time. So beyond just college bills, there is important financial infrastructure that needs to be established on the road to independence.

That could mean elements like first bank accounts, first charge cards, or first attempts at building a credit record. You can attack a couple of those goals at once through opening a spending account at Current and selecting the Build Card. With the Build Card, members have a single balance for members to view across credit and debit and your on-time monthly payments can help boost your credit score. Members have an average credit score increase of 81 points six months after using the Build Card. It also helps minimize risks of debt as you can only spend the amount available in your account. The funds are held in reserve as you spend, which are then used to pay your bill each month. These on-time payments are then reported to the three major credit bureaus (Equifax, Experian and TransUnion). 

Establishing a regular savings habit at an early age is also critical, even if it only involves small amounts at first. Current offers a bonus up to 4.00% on money in your Savings Pods, creating a growing reserve fund that could help avoid putting student expenses on pricey plastic.

-Make hard choices. To be sure, it can be difficult when university dreams crash into reality. But if one top-tier college is charging $80,000 a year, and another solid option is only $10,000, these are profound financial implications families have to weigh. 

One classic money-saving strategy is to begin your degree at a local two-year community college, and then transfer to your dream institution later. The degree and prestige will be the same but you will have slashed your costs essentially in half.

“Your goal should be to graduate with little to no debt, so that may mean going to a second-choice school,” says Catherine Valega, a financial planner with Green Bee Advisory in Burlington, Mass. “This will set your kids up for the best possible pathway to longer-term financial success.”