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Part 7: Education Planning Thumbnail

Part 7: Education Planning

Paige Knier

There are a lot of ways to pay for college, and not all of them are good.

Student loans are following college grads around for years after graduation, delaying wealth-building and the ability to achieve financial independence. As of August 2021, 43.2 million student borrowers were in debt by an average of $39,351 each (educationdata.org).

If you’ve spoken with our team about the topic of future education, you know we firmly believe that it doesn’t have to be this way.

My “college experience” was non-traditional and started years before I turned 18. I earned credits throughout my teenage years, graduated high school with five semesters of college credit under my belt, and still got to attend and graduate from a college that I loved.

While I won’t pretend that getting started on college credits at age 14 was my idea (as it turns out, my parents really did know best), I was still the one that had to do the work.


Here are four things that allowed me to graduate debt-free from a private college at age 20:

CLEP tests offer college credits for passing exams that cover introductory level college course material. Currently, there are exams covering 34 different topics that award three or more college credits after passing. These tests cost $89 (plus a testing center administration fee) and are widely accepted by colleges. There are countless study guides meant to help your student learn the material, and they can often be passed with what they already know.

My parents made me a deal: they would pay the exam fee, or I could pay for the courses later. That second option didn’t sound very fun to me, so I took my first CLEP test at age 14 and passed others as I studied the topics in my regular schooling.

Per the MN Department of Education website, “PSEO is a program that allows public and nonpublic students in 10th, 11th and 12th grades to earn college credit while still in high school, through enrollment in and successful completion of college nonsectarian courses at eligible postsecondary institutions.”

In other words, if eligible, your student can enroll in classes (in-person or online) at a higher learning institution while in high school to fulfill credit requirements for college and high school simultaneously. The best part? The bill is footed by the taxpayer, so nothing comes directly out of your own pocket. If you live in a state somewhere other than Minnesota, you may have different options available to you—you can check on your state here. I enrolled in PSEO full-time in 11th grade and graduated high school with an associate degree.

  • Education savings accounts

Perhaps you have had a conversation with our team about starting an education savings account for someone close to you. UTMAs and 529 plans are great ways to set aside funds for higher education while shielding your child, grandchild, etc. from tax liability.

529s are tax-advantaged accounts designed specifically for education savings—contributions are made with after-tax dollars and the money comes out federal income tax-free if used for qualified education expenses. While a UTMA does not provide the same tax advantages as a 529 plan, it does offer more flexibility in that it is not specifically reserved for education costs.

If your student is going to have some skin in the game, education savings accounts are a great way to partner with them.

  • Choosing a school that partnered with my progress

Not every school operates by the same rules, so thinking ahead here is paramount. As a general rule of thumb, state schools will accept credits earned prior to college more readily than private schools will. Once I knew the school for me, I made sure to learn its requirements and steer clear of courses from other schools that wouldn’t transfer towards my degree.

Many high school students have no clue what they want to study in college; if that’s the case, not to worry! The first two years of college are typically general study, so taking courses that would be required regardless of the area of study is a great way to get started.

My path towards a debt-free college graduation ceremony at age 20 was out of the ordinary, but my intent is to showcase that there is more than one method of getting a degree. A myriad of options are available to lessen the financial burden both during and after college for the student.

Like most things in personal finance, the key is having a plan early and executing it. Our team is here to help you craft and implement a successful education plan.

**Giveaway: the first 5 readers of this post to email Paige will receive a copy of Ron Lieber’s new book, The Price You Pay for College: An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make. Ron is the “Your Money” columnist for The New York Times.