The High Cost of College
Facing Facts; Debunking Myths
By Teresa Carson
College costs a lot of money. That’s no myth; it’s very, very real. Oregon and Washington’s public universities currently charge about $15,000 annually for tuition, room and board. Today’s average cost at private colleges in the U.S. is $32,307, according to the College Board. That’s the average; some of the pricier institutions charge $50,000 – or more. All of these numbers are per year and don’t include inflation. According to the popular Web resource, FinAid.org, college costs increase about 8 percent each year. For today’s newborn – are you sitting down? – that could mean a higher education tab three times that of today’s numbers.
Reaching for the Tylenol yet? Although these numbers are daunting, a college education is within the reach of virtually every family. And don’t forget why you’re sending your kids to college: College graduates earn more than $800,000 more over a life time than those with only a high school diploma. And, of course, the important non-financial rewards of college are priceless.
Below we try to help you separate college finance facts from fiction and, in the process, get you started down the path toward making college affordable for your kids.
Families should start saving early.
Fact. The earlier you start and the more you save, the more options your kids will have as high school seniors. “This is the number one mistake parents make, they wait too long to start saving for college,” says Fayne Griffiths, director of student financial services at Clackamas Community College.
Most experts recommend that you open a 529 college savings account. These accounts have tax advantages that will “grow” your college savings more rapidly, although families need to be mindful of the fees. Experts also advice that you save in the parent’s name, not the child’s. Doting grandparents and others can contribute to the college fund too.
You can also start early on scholarships. Some scholarships have no age requirement and many are open to kids as young as eighth grade. It also pays to get your youngsters into a routine of community service long before they reach high school, since many scholarships are based on your child’s character and what they’ve done for others.
You should start early in other ways too. “Create a culture of expectation of higher education early in life. For example, rather than saying ‘are you going to college?’ frame it as ‘where are you going to college? or ‘when you go to college,’” explains Alyson Galloway, assistant director of financial aid and scholarships, Washington State University – Vancouver. This will also help everyone get in the mindset of saving for it, she says.
“Pay off your debts. It’s important to unencumber income to pay for college,” counsels Varga Fox, director of financial aid at Whitman College in Walla Walla.
Another tip is to educate yourselves early on how financial aid works. “Don’t be afraid to go into a financial aid office or our offices, even if your children are small,” urges Karen deVilla, executive director of the Northwest Education Loan Association.
Everybody graduates with student debt.
Fiction. Many families manage to get their kids through college without debt. The two general types of college aid do not need to be repaid are grants and scholarships. Need-based grants are given by colleges, states and the federal government. Need-based government aid is targeted at low-income students. But colleges, especially those pricey privates, often give need-based aid to fairly comfortable families.
The other “free” money is scholarships. These range from school merit-based or athletic scholarships to scholarships from non-school sources ranging from Coca-Cola to the local Rotary Club. Loans, of course, are available, but everyone’s goal is to graduate with as little debt as possible.
We simply can’t save for college
Definitely fiction. Many families say they just don’t have enough money to save for college. This is true for some very low-income families, but most can put away something, if they are determined. And, truly low-income families qualify for government grants for college. The average award for the Federal Pell Grant program (for low-income students) is $2,200 per year.
Think you can’t save? Giving up just one $3.50 coffee drink a week for 18 years will net $3,276 (without interest), enough for one year at a community college. The average cable television bill in the U.S. is more than $40 per month. Do without cable and stash that cash for 18 years and you have $9,288 (again, without the magic of compound interest), more than enough for one year tuition at State U. There are countless other painless ways to cut back in order to bulk up that college fund, if it’s really a priority for your family.
“When we’re determining financial aid, we don’t look at credit card debt or boat or car payments,” Whitman’s Fox says, “those are choices families make. It’s important to make the choice to save for college. Is it more important to have that new car or put your child though college?”
Average students can get aid.
Partially fiction. There are many scholarships for average students and need-based aid does not take into account your student’s grades or test scores. Still many scholarships and programs require good GPAs. So, the better the student, the better your chances of slashing college costs. “Keeping a good grade point average, taking the right classes in high school and getting involved are the most common factors in winning scholarships,” says WSU’s Galloway.
Many colleges, especially the pricey private ones, give merit scholarships. These can be substantial. Of course, it’s easier for excellent students to win merit money from colleges, especially if they are a “catch” for that institution. Students and their check-writing parents can use the many available data bases and college Web sites to find out which colleges are generous with merit money and what their incoming classes looks like. Your 3.8 GPA student is likely to earn big merit money from a generous college where the average entering GPA is 3.2.
Another important method of cutting college costs – earning college credit in high school – is far easier for top students. Students can take Advanced Placement or International Baccalaureate classes and classes in cooperation with community colleges to get a head start on college, nearly for free. Kids at Oregon City High School, for example, have more than a dozen AP classes to choose from and an arrangement with Clackamas Community College, which is right in the high school’s back yard. As a result, students can graduate from Oregon City High School with a full year of college credits if they go to an Oregon public university. Unfortunately many private schools, where these top students often want to go, do not accept or limit these credits.
And, a handful of super-selective universities with massive endowments, including Harvard and Stanford have recently announced essentially free tuition for families earning less than $100,000. They join a handful of little-known elite colleges that have long been free, including The Cooper Union in New York. But you have to be admitted to these very choosy institutions before the money flows – and the competition is stiff.
The Western Undergraduate Exchange allows out-of-state students from 15 Western states to attend 143 public colleges (generally not the top-ranked schools in the state) at 150 percent of in-state tuition. So, if your child wants to go out-of-state, this can be a less-expensive option. However, many WUE schools require a high GPA/test scores to participate in the program.
At these prices, kids can’t be expected to pay for anything.
Fiction. “If kids are expected to contribute, they have a vested interest in their education,” Whitman’s Fox says. “We see it many times, students that have not contributed, have much less regard for their educations.” Your son can start stashing money away when he’s mowing lawns in middle school and continue as he takes on summer jobs. His savings can grow to become a meaningful contribution to the college bill, easily as much as $10,000. Students can continue summer jobs and work while in college.
Be flexible.
Fact. While your child may dream of a pricey private college, if that isn’t possible, she can still get a great college education on the cheap. If she lives at home and spends two years at a community college (about $5,200 for two years at Vancouver’s Clark College) and then two years at home attending a state school ($12,600, two years at WSU-Vancouver), the total cost is doable with the child’s earnings and maybe some help from mom and dad. “Community colleges are really the opportunity for families. A four-year education does not have to all be at a four-year college,” says Griffiths.
Despite the fact that college is a considerable financial expense, remember that a college education is within the reach of most families. And there’s plenty of help out there. “We don’t want to discourage people,” emphasizes WSU’s Galloway. “We want people to know that there are resources available to them.”
ADDITIONAL INFORMATION
Washington Gets Serious About College
Washington spends more than $200 million helping students pay for college and has a new program that guarantees that its lower-income kids will be able to foot the college bill.
The new Washington College Bound Scholarship asks low-income seventh and eighth graders (those on free/reduced price lunch) to pledge to graduate from high school with a C average and demonstrate good citizenship. In exchange Washington will pay for tuition and books at any Washington public college when they ultimately do graduate from high school.
“Few states have gone as far as Washington to help all students to afford college,” says Vincent Boidolats, a policy associate tracking higher education programs for the National Conference of State Legislatures.
For students at all income levels, Washington’s tax-advantaged 529 savings program has the advantage of a pre-paid, lock-in feature. If you deposit enough for a year’s tuition in a GET (Guaranteed Education Tuition) account, that tuition is locked-in, no matter how much tuition goes up by the time your child heads off to college in five or 10 years.
The 411 on Paying for College
There are hundreds of books, Web sites and articles with information on taming the high cost of college.
Here are a few Web sites to get parents started.
FAFSA; www.fafsa.ed.gov. As every parent of a high school senior knows, FAFSA stands for “Free Application for Federal Student Aid.” Virtually every college requires it, some even for merit-based aid. It will calculate the all important EFC (expected family contribution). Colleges use the EFC to determine financial aid.
Oregon Student Assistance Commission; www.getcollegefunds.org. This is the gatekeeper for financial aid provided by the state of Oregon and hundreds of private scholarships. This site also features lots of good general information on picking and paying for college. Washington higher education folks are organizing a similar service.
Washington Higher Education Coordinating Board; www.hecb.wa.gov. Dedicated to helping college students succeed, this agency oversees many financial aid and other programs.
529 Programs. These tax-advantaged savings plans are administered by each state. Washington’s is at www.get.wa.gov. Oregon’s plans are at www.oregon529network.com. General information can be found at www.collegesavings.org and www.SavingForCollege.com.
Scholarships. A couple of the Web sites that list scads of private, competitive scholarships are www.fastweb.com and www.scholarships.com. The College Board site has scholarship lists as well as a ton of other college information. www.collegeboard.com.
FinAid; www.finaid.org. This is a good overall site for information on paying for college. It has a calculator to determine Estimated Family Contribution so you can get an idea of what colleges will expect you to contribute to your children’s college education.
NELA; www.nela.net. The Northwest Education Loan Association has tons of information about all aspects of applying to and paying for college, not just about loans. They have resources and free counseling in their Portland office at 1500 NE Irving St. (right behind Benson High School; 503-488-6000) and at their Seattle location.
Western Undergraduate Exchange; wue.wiche.edu. Information on this cooperative college program among the 15 Western states.
Teresa Carson is a Portland freelance writer and mom.
June 12th, 2010 | Category: College
