Amidst Increasing Tuition and Tens of Thousands of Average Debt

The answer is a certified educational planner.  These professionals work as your private financial aid consultant to ensure you maximize your cost savings.

by Sophia Cheng

A college degree has never been more expensive. According to the National Center for Public Policy and Higher Education, college tuition has increased more than 439 percent since 1982 and 5 percent since last year.

Student loans are the No. 2 source of household debt, and students are borrowing more money to pay for college than ever. New data from College Access and Success shows that students who graduated in 2010 carried 5 percent more debt than the previous year., a financial aid information source, claims that two-thirds of four-year undergraduates

leave college with debt. They also estimated that for the class of 2011, average debt was $27,200—or, if parent loans were included, $34,000.

Bowdoin made last week’s Huffington Post list of “Five Schools with the Best Financial Aid,” along with Williams, Vassar, Amherst, and Pomona, due in large part to the January 2008 decision by Trustees to eliminate loans from the financial aid process.

Nonetheless, 43 percent of the Class of 2010 took out loans, with an average of $18,229.

"Student debt goes up and it doesn’t ever go down," said the publisher of to The New York Times.

As the recession drags on, those with student loans are being hit especially hard. College graduates often find themselves saddled with debt and tax at the same time, unable to buy a home or obtain other credit.

Many Bowdoin students tend to leave Maine after graduation, often finding themselves in cities with high costs of living.

"Opportunity Maine" is a state program started in January 2008 designed to ease students’ financial burdens while encouraging graduates from Maine colleges and universities to stay and work in the state.

"Maine has an issue of brain drain," Director of Student Aid Stephen Joyce said. "A lot of students come here for college, but most leave after they graduate."

"There are more job opportunities outside of Maine," first year Emma Wheeler said. "I also want an urban life in a big city—more culture, more excitement."

The program provides a state income tax credit for student loan payments made by Maine college graduates who subsequently live, work and pay taxes in the state within 10 years. Alternatively, the tax credit may be available to Maine businesses that make their employees’ education loan payment.

The average student credit will be $2,100 each year, but the figure varies depending on a student’s tax liability and how much student loan he or she has repaid. Some may even claim up to $5,500 each year.

All current Bowdoin students are eligible for this loan once they have earned a degree. The College has promoted the program ever since its launch.

"Its great because it’s financially advantageous to students and great for the state—Maine needs a highly educated workforce," Joyce said.

Every student who takes a loan during any of their four years at Bowdoin is told about the program and given the materials they need to apply for the credit.

The Student Aid Office has also been putting up flyers in Thorne and Moulton Dining Halls and even dedicates a page to the program on its website.

"Because in Maine, we’re not able to offer above the national pay average, and because student debt is enormous, with the incomes that Maine can provide in general, we end up losing, sometimes, our best and brightest, because they’re looking for opportunities that can help pay off their student loans and their debts," said former Governor John E. Baldacci in a 2007 Orient article.

For many students, though, it seems that opportunity takes precedence over debt burden.

"Maine has been a perfect home for four years, but I don’t know the prospect of paying off student loans would come above taking an opportunity that would truly allow me to grow in the ways that I’m looking for," said senior Sadie Nott, who plans to pursue a career in urban planning and design

Students Finish College Anchored to Loan Debt

Minimizing loan debt is a primary goal for any financial aid advisor.  Asking questions, being proactive, and asking for the financial aid assistance you need are the keys to success.

By Jodi S. Cohen and Vikki Ortiz Healy

CHICAGO — A college education used to be a ticket to a secure future. Now, a generation of students and graduates is walking off campus with a collective $1 trillion in student loan debt and troubling career prospects. The daunting combination is forcing them to rethink their futures, postponing weddings, home purchases and vacations to make hefty monthly payments on loans that will follow them into middle age.

It’s a financial and emotional strain their parents didn’t have, or at least not to the same degree. Just two decades ago, fewer than half of undergraduates finished school with debt, and the average was less than $10,000. This spring, two- thirds of graduates are expected to have debt, owing an average of $29,000. In fact, student loan debt now exceeds the country’s credit card debt.

Addressing the outcry heard from Occupy Wall Street protests to kitchen tables in the Chicago area, President Obama last week sped up plans to help graduates dig out. Some borrowers will be able to lower their maximum required payments starting next year, with balances forgiven after 20 years. Borrowers will also have the chance to consolidate loans at a lower interest rate.

But even those proposals may mean only modest help, and won’t help those who’ve already defaulted.

And future students could face even heavier financial burdens. The cost of going to college has risen faster than inflation, home prices and even health care costs. Tuition at the average public university is up 8.3 percent this fall, and 123 colleges now charge $50,000 or more for tuition, fees, and room and board, according to data released last week.

While a college degree will lead to significantly higher earnings over a lifetime, the unemployment rate for recent graduates is more than 10 percent.

"What we know is it is impacting so many people," said John Pelletier, director of the Center for Financial Literacy at Champlain College in Vermont. "I think many of them have been surprised, as have been their parents. There are many of them like the folks who may have gotten into mortgages they regret and don’t understand."

An ongoing bill

That’s true for Steven Kent, who graduated from Loyola University Chicago in 2009 with a journalism degree and $49,000 in federal student loan debt. His payment notices asked for at least $650 a month, he said, more than his $533 rent.

Kent, 27, is working at a Starbucks where he earns about $1,500 in salary and tips a month. He hasn’t paid back a penny of his loans.

"I didn’t have an expectation that it would be this ongoing bill I would carry forever. I thought it would be like a utility bill, not another rent payment," said Kent, whose deferment ends in April. "It is like having a ticking time bomb around your neck."

Laura Perna, an education professor at the University of Pennsylvania, said that while most students borrow reasonable amounts of money, an “important share of the population” has excessive amounts of debt.

"This is a relatively new phenomenon," Perna said. "For those students, it is influencing many dimensions of their post-undergraduate life."

In 2005, when the advocacy group Project on Student Debt began, there was so little attention to the issue that founders couldn’t decide on an organization name. “There wasn’t the term ‘student debt,’ ” said Lauren Asher, president of the Institute for College Access and Success, the home of the debt project. “There was so little awareness of how much our higher education system had changed and how heavily it had come to rely on student debt.”

"College is still the best investment you can make in the future and our country’s future," Asher said. "But like any investment, the returns are not guaranteed."

A ‘scary thought’

Nija Fountano is in college, but she’s already, little by little, paying off her student loans.

About $60 a month goes toward a loan payment, money earned from the two jobs she has in addition to going to school full time at the University of Illinois at Chicago. She expects to graduate in the spring with $30,000 in private and federal loan debt.

"That is becoming an increasingly scary thought because I don’t have any savings," Fountano said. "I don’t know if I would say it weighs on me daily, but having such a tight budget and living paycheck to paycheck is a stress on its own."

An urban-planning student, Fountano, 21, is postponing graduate school plans until she feels more financially secure. She works at Whole Foods and as a gymnastics instructor, and she hopes to get a job related to her field of study after graduating.

"Was it worth it? It is definitely worth it, but it is really difficult, and sometimes when I think about it, I wonder if maybe I could have done it differently," she said.

No buying a house

Like many young married couples, Jessica and Ian Riley share everything they have, including $30,000 of student loan debt.

She still owes about $21,000 on a loan she took out to pay for the Western Michigan University bachelor’s degree she received in 2006. The debt eats $400 from her monthly pay.

He owes $9,000 for a semester of an online course he took from Ashford University. He pays $627 a month.

"It definitely changes, like, your whole mind frame of things that you do, and not getting any more credit cards, or not accruing any more debt," Jessica Riley said. "We have rented for 11 years. I would love to own a home, but honestly I don’t see that happening."

The Rileys, both 29, say they wish the federal government could do something to lower interest rates or offer more flexible repayment plans.

"Just give graduates some kind of solution," she said. "We want to pay our debt, but it needs to be a reasonable manner where we can eat and breathe and be happy."

Working two jobs

Natalie Quist, 28, doesn’t look at the statements on her student loans anymore. They make her queasy.

She’s well aware that she owes $13,000 on a federal loan and $19,000 more to a private lender.

The debt, which requires $500 in payments each month, forced her to take a second job, never mind that neither it nor her first job is related to psychology or criminal justice, her college majors.

"I wouldn’t say my degree is useless, but it doesn’t get you as far as you thought it would," said Quist, who graduated from Loyola University Chicago in 2006.

Because of the debt, Quist doesn’t have a car. She’d also like to go to graduate school, but she doesn’t dare add to her loan balance.

Still, Quist considers herself lucky in some ways. She would be worse off, she said, had she not gotten a $36,000 academic scholarship to reduce her tuition bill. And she knows the price of higher education has only risen since she got her diploma.

"It’s probably worse for kids entering college right now," Quist said. "I can’t imagine."

Divorce and the Cost of College

A financial aid educational consultant can be the most important mediator in this delicate family situation.  You can’t let a divorce impede the education and college funding services for your child.

by Daniel Clement

The college application process can be an extremely stressful experience in a young person’s life; adding to the child’s stress about deciding where to apply and which school to attend is the child’s awareness that his or her choice of a college will provide yet another opportunity for parental conflict over who is going to pay for college.  In New York, divorced parents oft seek to apply the “SUNY cap.”

 The SUNY cap is one of the devises employed by New York divorce attorneys to address the issue how to pay for children’s college education.     

 It is common in New York for divorcing parents to agree in their settlement agreements how college expenses will be paid.  Sometimes the parties agree to split the actual costs of pursuing a higher education; other times one parent solely agrees to bear the burden.   More often, the parties agree to limit their obligation to pay for their children’s college education to a percentage of the cost of a State University of New York (SUNY) school.   This limitation is referred to as a “SUNY Cap.”  

 An agreement to apply the SUNY cap and to limit a parent’s contribution to a child’s college education will be enforced regardless of whether the child attends a public or private educational institution.

In the absence of an agreement, the Domestic Relations Law empowers a court to order a parent to pay for college.  Among the factors that Courts  consider in determining whether to award college expenses are the educational background of the parents, their financial ability to provide the necessary funds, the child’s academic ability and endeavors, and the type of college that would be most suitable for the child.

More problematic is when, in the absence of an agreement, college expenses will be paid.   In the recent case, Pamela T. v Marc B., the parties did not have an agreement as to how they would pay for the children’s college education, the court refused to apply a SUNY cap.

In Pamela T.  v. Marc B., the Court announced that:

“There is no basis to impose the SUNY cap, to the extent that it should be imposed at all, where the party seeking to invoke the cap has the financial ability to contribute towards the actual amount of his or her child’s college expenses.

”The Court noted that even if a SUNY were to be imposed, it would not be determinative as to what school the child would attend.    As the Court noted:

“Contrary to what proponents of a wide and liberal application of the SUNY cap might urge, the SUNY system should not be the assumed destination of the children of divorce.

”In selecting the college, a litany of factors should be considered, including the educational curriculum, the make-up of the student body, and active alumni networks. “Other considerations might include such things as the size of the school, the type of campus, the architectural distinction of the buildings, the nature of its athletic programs, the services provided to students with either physical or learning disabilities, and the type of city or town in which the school is located. “

In short, the failure to address the how the costs of college will be handled in a settlement agreement only leaves the door open to litigation when the children are college bound.  

Average Georgia College Student Graduates $19000 in Debt. Worth it?

Students and their families are working hard to limit the amount of student loan debt and maximize the college funding services.  The education is worth it if you can get the college financial aid help you need.

by Maureen Downey

This is one of the few studies on college debt that takes it down to a localized level. A report by the Project on Student Debt found that Georgia’s class of 2010 college graduates owed an average of nearly $19,000 in loans.

For those of you wondering why students end up with that much debt in light of the HOPE Scholarship, remember that room and board and fees are not covered, and those annual costs can easily exceed $10,000.

I still say the evidence tips in favor of a college degree, although I know many of you disagree. Granted, the job market is tough now, and half of recent college grads are reportedly living back at home with mom and dad. But a degree is still an asset in the long-term, according to most studies on lifetime earning power.

Georgia ranked No. 44 in the state-by-state list of debt owed. Graduates here face less debt after college than their peers nationwide, which may be a result of the generous – although increasingly less so – HOPE Scholarship.

According to the AJC story:

Nationwide, graduates carried an average debt load of $25,250, up 5 percent from the previous year and the highest amount on record. Georgians carried less loan debt than the national average, which indicates nearly two-thirds of 2010 graduates needed college loans to complete their 4-year degrees. New Hampshire topped the list, with 74 percent of graduates owing an average of $31,048, according to the study’s findings.

It’s no secret that it typically costs more money to attend a private college or university rather than a public one. But those attending state schools still accumulate loan debt, even if degrees are a better deal in Georgia.

Southern Polytechnic State University graduates owed an average of $24,360 in loans, according to the report’s findings on Georgia colleges and universities. It cost about $15,448 a year — including tuition, room and board — to attend the Cobb County university.

Among the state’s largest public universities, Georgia Tech grads borrowed $21,838, Georgia State’s borrowed $20,336, and University of Georgia grads needed $15,938. Graduates of Kennesaw State University, in contrast, owed less than a $1,000 each, on average.

So which Georgia graduates owed the most? The Savannah College of Art and Design holds the honor, with diploma holders owing $39,066. Total cost to attend the school is just over $40,000 a year.

Graduates’ debt loads at Georgia’s other private colleges and universities averaged nearly $31,000 at Shorter University, $30,460 at Mercer University, and around $26,000 at Agnes Scott College and Emory University.

What Others Say: College Costs Crush the Best and Brightest

It’s important to find the right mix of college tuition solutions for your situation.  A financial aid advisor working for you can make sure the costs don’t crush you.

by St. Louis Post Dispatch

Not all that long ago in the American experience, a million was a big number. Then it was a billion. Today the word “trillion” is thrown around casually.

The number is so big and so hard to comprehend that it has a certain cachet. Deficits and debts seem to matter when trillions of dollars are at stake. When they were in the billions, not so much. Which was a mistake.

Which brings us to the latest trillion-dollar-baby: America’s student loan debt.

The Federal Reserve Bank of New York reported last month that the debt owed by U.S. college students has topped $1 trillion for the first time. That figure doesn’t even take into account the loans owned by parents on behalf of students.

This number is not just the result of inflation or population growth but of a fundamental shift in U.S. policy toward helping our next generation reach for the same dreams the previous generation had the opportunity to achieve.

Students are borrowing twice what they did a decade ago, partly because states have reduced their support for higher education. In the meantime, with ever more kids wanting to get in and willing to borrow to pay for it, colleges keep raising prices.

In 1984, tuition was less than 25 percent of the overall revenue for the nation’s colleges and universities, according to an association known as the State Higher Education Executive Officers.

By 2009, tuition accounted for 37 percent of higher education revenue. The same study found that per-student state appropriations for public colleges and universities were lower in 2009 than at any time since 1984.

America’s middle class is being priced out of an opportunity to succeed.

But smart kids know that their lifetime earning potential is significantly increased by obtaining a college degree. So they saddle themselves with debt to keep alive the hope that comes with an education. That hope is being crushed by bills that outpace post-graduation jobs, if the jobs even exist.

So it’s not hard to understand why, in many cities, a major source of the anger fueling the Occupy Wall Street movement comes from students seeking student loan relief.

Slowly but surely, the threads of the tapestry of the American dream are being pulled away. First came the homeownership bubble, which in some ways contributed to the original tea party anger. Now comes the student loan debt bubble.

About two-thirds of graduates with a bachelor’s degree have student loans, according to the College Board, with the average debt about $24,000. The promise was that you’d get a good job coming out of school, so you could handle that. But not if no one’s hiring. Not if you’re working at Starbucks.

Congress, President Barack Obama and state legislatures must get beyond the political battles of left and right and see what is happening to the next generation of Americans. Most of them don’t yet have any political allegiances, only a desire to start building their own nest egg.

President Obama reached out to the students dragged down by debt last week. For six months, beginning in January, borrowers with both federal loans and federally backed loans can consolidate them at a sightly lower interest rate.

It’s a modest start, but far more serious work needs to be done.

How to Go to College Without Going Broke

College financial aid help is available to all.  Look for a certified educational planner to create the best financial plan for you.

by Daily Finance

For the 2009-2010 school year, the average cost of tuition and fees at a four-year college or university was $12,467 — 60% more than it was 10 years ago, and almost three times as much as it was in the early 1990s. Factor in the cost of room and board — which has risen more slowly — and total average college costs are still about 60% higher than they were in 1991.

To cover these hefty bills, the average undergrad takes out loans, and graduates with approximately $25,250 in student debt. As an ever-higher percentage of students take on loans, the problem has reached epic proportions: In 2010, the total amount of student loans outstanding surpassed the total amount of credit card debt for the first time. This year, it is on track to cross the $1 trillion barrier.

Worth the Money?

So is a college degree is actually worth the price? James Altucher, a finance writer and hedge fund analyst, has made headlines with his claim that people of college age would be better served by taking those four years to start businesses, travel the world, and generally discover themselves. Peter Thiel, co-founder of PayPal, agrees, and has put a bit of his money where his mouth is: The Thiel Fellowship is giving a small number of young people grants of up to $100,000 that they will use to start businesses. The only catch is that they have to agree to stay out of college for two years.

Thiel and Altucher aside, however, the truth is that, for most young people, a college degree has become more necessary — and valuable — than ever. According to a recent Pew survey, the average lifetime earnings for a college graduate are $1.42 million, almost double the $770,000 of a worker with only a high school diploma. Even given the cost of tuition and the loss of earnings during one’s college years — which Pew estimates at $100,000 overall — a bachelor’s degree is still very profitable.

Saving on Tuition

In the short run, college is extremely expensive, but there are many ways to cut the costs. One smart move is to start off at a community college. Since many universities accept up to 60 units of transfer credits, it’s possible to take your freshman and sophomore years at a two-year school, then finish up and get your sheepskin at a more expensive and prestigious institution.

The numbers are pretty clear: Based on the 2009-2010 figures, two years of tuition and fees at a four-year college average $24,934, plus an added $17,038 for room and board. At a community college, those students can expect to pay an average of $5,426 for the same two years. Additionally, given that most community college students commute from home, room and board costs may be negligible. Overall savings: between $19,508 and $36,546.

As for the junior and senior years, prices vary greatly depending upon the school, but public colleges and universities tend to be a wise bet. Tuitions at state schools are rising — they went up more than 8% over the last year — but are still far cheaper than private institutions. The tuition and fees at a four-year public school averaged $6,695, compared to $25,552 at a nonprofit private four-year school. At those rates, students who opt for a public university would save $37,714 over two years.

Saving After Graduation

Saving on tuition won’t help all that much if your degree doesn’t get you a job. This isn’t much of a problem for engineering majors: Seven of the 10 most lucrative majors are in engineering, and the other three — physics, computer science, and applied mathematics — are also highly math-dependent. Students with degrees in these majors can look forward to average starting salaries of $63,070.

Even if you’re more inclined to the liberal arts, all hope is not lost: Graduates in less in-demand majors can still expect to vastly out-earn workers with only a high school diploma. English majors, for example, make an average of $1.92 million over a 40-year work life, as do philosophy majors. What’s more, according to the Princeton Review, majors like psychology, business administration and communications can prepare students for a variety of careers in a host of industries.

Another thing that can give students a step up is a solid career placement program. While many of the top placement offices are at private schools, some public schools also have great programs. According to the Princeton Review, the University of Florida, Penn State, UT-Austin, Clemson, and Missouri S&T are particularly outstanding.

Internships can also be a big help: A 2010 survey by the National Association of Colleges and Employers revealed that students who had completed at least one internship while in college were almost 38% more likely to get a job offer after graduation. They were also likely to be paid more: The average starting salary of graduates with at least one internship was 31% higher than those who had never undertaken one. In other words, when it comes to getting a job after college, the best move might be to get a job while in college.


Costly College Myths, Part 2

College funding services are abundant but are also big targets for scam artists.  It’s important to be working with a certified financial aid advisor to identify the solutions that will really work best for your situation.

by Liz Weston, MSN Money

Only one in four students attends a residential college — the kind with dorms and fraternities. The rest attend commuter schools, community colleges and trade schools.

Forty-five percent of students attending four-year schools work 20 or more hours a week, while 60% of community-college students work at least that much.

Twenty-three percent of college students have dependent children.

Given how different most people’s college experiences are from the myth of toga parties and ivy-covered buildings, maybe it’s not surprising that so many other college fables have taken hold.

How to earn money for college
Over the summer I dealt with three common misunderstandings in “3 college myths that will cost you”:

•”Saving for college will hurt my child’s chances of getting financial aid.” (Reality: If you can save, you should.)
•”College costs too much.” (Reality: Not attending could cost you a lot more.)
•”A public school will be cheaper than a private college.” (Reality: Budget cuts and crowded campuses mean it could take you years longer to complete a degree at a public school.)
Now I’ll tackle three more higher-education myths that can set you back financially. Starting with:

1. “There’s no point in filling out a financial-aid application, because we aren’t needy enough.”

"Most families underestimate their eligibility for need-based aid and overestimate their eligibility for merit-based aid," said Mark Kantrowitz, a financial-aid expert and the author of "Secrets to Winning a Scholarship."

In other words, your kid probably won’t attract full-ride scholarships even if she is a whiz at basketball or math. But your family may qualify for need-based aid, even if your income approaches six figures, if the school is expensive or you have more than one child in college at a time.

"The financial-aid formulas are complicated enough that you can’t tell whether you are eligible for financial aid without applying," said Kantrowitz, the publisher of Fastweb and FinAid.

"Middle- and upper-income families might qualify for financial aid if they have multiple children in college at the same time or their children are enrolled at higher-cost colleges," he said.

If you’re sure you don’t qualify for need-based aid, though, you still should fill out the Free Application for Federal Student Aid, or FAFSA, if you want access to federal student loans. Federal education loans are typically much better than private student loans, since the federal version offers fixed rates, flexible repayment options and the possibility of forgiveness.

"The unsubsidized Stafford loan and the Parent PLUS loan do not depend on financial need, so you don’t have to be poor to qualify. Even Bill Gates could qualify for these loans," Kantrowitz said. "The federal government requires families to file the FAFSA to get these loans, however, in order to ensure that they get all the grants and other gift aid for which they are eligible."

Filling out the FAFSA takes about an hour, Kantrowitz said.

2. “Borrowing for an education is a bad idea.”

Overdosing on student loans and other debt is clearly detrimental to your financial health. But excessive suspicion of debt could keep some people from getting degrees that could justify the costs of borrowing.

A Public Agenda study of high school graduates who didn’t go on to graduate from college found they were far more likely than college graduates to:

•Be unfamiliar with the financial aid process. Only three in 10 high school graduates recognized the term “FAFSA,” the gateway application for financial aid, compared with seven in 10 college graduates.
•Be unconvinced that borrowing for a college degree can make sense. Fifty-four percent of college graduates strongly agreed that “even if someone has to take out a loan to go to college, it is worth it in the long run,” compared with 37% of those who didn’t graduate from college.
•Believe that “there are many ways to succeed in today’s work world without a college education” (57% of nongraduates versus 40% of college grads).
These optimists may be counting on a world that no longer exists. The jobs that once provided stable middle-class incomes for many people without college degrees — such as union manufacturing jobs — are fast disappearing. Currently, 59% of jobs require some college education, according to the Georgetown University Center on Education and the Workforce. By 2018, the proportion is projected to reach 63%.

Obviously, a college degree doesn’t guarantee a great income or lifetime employment. But even in today’s lousy economy, college graduates have half the unemployment rate of high school grads, and on average will earn far more over their lifetimes.

Calculate the Costs of College

A financial aid advisor can calculate your true college costs.  These college financial aid services are invaluable to the students and their families.

by Michelle Singletary

I haven’t met anyone who looks forward to the process of figuring out what’s a fair price to pay for a car and then negotiating to get less than the sticker price from a dealership. That same anxiety is also true for students and families trying to figure out the cost of college.

But finally, the federal government has taken steps to push schools to give families more price information. My hope is people will use it when making decisions about the colleges their children want to attend, ultimately reducing the debt they take on.

School officials often boast that many families don’t pay the sticker price for their institutions. In fact, the College Board, which puts out an annual report on the price of college, says about one-third of full-time students pay the sticker price of college without the assistance of aid.

Still, it was concern about the rising cost of college and the non-transparency of prices that led to a mandate in the Higher Education Opportunity Act of 2008 requiring all postsecondary institutions that participate in Title IV federal student aid programs to begin posting a net price calculator on their websites as of last Saturday.

The act called on the Department of Education to also create College Affordability and Transparency Lists. This past summer, the department released lists that highlighted private and public institutions with the highest and lowest tuition and fees. The department also generated lists of schools with the largest increases in tuition, fees and net prices (cost of attendance after grant and scholarship aid). To view the lists, go to

All this focus on net price is a good thing.

The net price is what you might have to earn, save or borrow to go to that school, said Lauren Asher, president of the Institute for College Access & Success, a nonprofit group that does research and advocacy work to help make higher education more available and affordable.

Asher provided these tips for finding and using a net price calculator:

» Be persistent. You won’t find the calculator in the same place on every website. It may be posted on the college’s home page. However, you’ll likely to find it in the Financial Aid section, which is sometimes under Admissions. Also try searching for the calculator within the site or by using an outside search engine such as Google.

» The tool isn’t always called a “net price calculator,” so keep an eye out for the keywords “cost,” “estimator” and “financial aid.”

» Some calculators will make you provide detailed financial information before you get a net price.

» The most important number on the page is the net price. Focus on that dollar figure.

» The estimates are only for the first year of college and apply to a particular academic year. Not all grants and scholarships are available for all years of college.

College is Cheaper than you Think

Any quality financial aid consultant can uncover savings you didn’t think were possible.  The key is their ability to identify little known college tuition solutions.

by Judith Scott Clayton

The College Board released its annual report on the cost of college last week, and guess what? It’s going up. Again. Cue the headlines: “College Costs Reach New Highs”; “Public College Costs Surge 8.3 Percent”; “College Tuition Is Out of Control.”

Today’s Economist
Perspectives from expert contributors.
.What has been buried in much of the resulting coverage is that while colleges’ published tuition and fees have indeed increased, these so-called “sticker prices” are not all that informative. For the average full-time student, net tuition – which subtracts grants and tax-based aid – is less than half of the published price at private nonprofit four-year schools and less than a third of the published price at the typical public four-year institution.

Moreover, trends in sticker prices and net prices have diverged over the past several years, such that many students are actually paying less now to attend college than they would have five years ago.

The College BoardThis divergence is the result of a 40 percent increase in grant aid and a 78 percent increase in tax-based aid since 2005-6. The average full-time undergraduate now receives about $6,500 annually in grant aid and nearly $1,000 in tax-based aid to help defray tuition and fees (these figures, also from the College Board, are averaged across all students, including those who received no aid). Only about one-third of full-time students pay the published sticker price, and even this third may receive significant tuition tax credits that lower the effective cost.

After accounting for this assistance, net tuition and fees in the public four-year sector, at $2,490, are only $170 higher today (in constant 2011 dollars) than they were five years ago. At private nonprofit four-year institutions, net prices are $500 lower than they were five years ago. And at community colleges, the average student actually faces a negative net price – meaning they receive about $800 more in aid than they are charged in tuition and fees.

This growing gap between sticker prices and net prices is not a bad thing; it enables colleges (or states) to price discriminate. Because tuition at most public and nonprofit institutions fails to cover per-student expenditures, keeping published prices low would mean providing a blanket subsidy to all students regardless of need.

The trade-off, however, is increased complexity, and often total confusion. Many students and their families consider only published prices when comparing colleges, without taking financial aid into account.

And families’ perceptions of sticker prices are themselves often wildly inflated, perhaps in part because of news coverage that tends to focus on prices at elite four-year institutions, like Columbia University (with published tuition and fees exceeding $45,000) rather than the public two- and four-year institutions that most students attend. Participants in one recent study, for example, overestimated the published tuition costs of community college by more than 300 percent.

This confusion is one reason why colleges are now required, as of Oct. 29, to offer “net price calculators” on their Web sites. Having explored a handful, I have found quite a bit of variation in both the amount of information students are required to input and the resulting output.

Many calculators, like one used by the University of Florida, require the user to page through multiple screens, inputting detailed information that most casual explorers will not have on hand (e.g., what year the eldest parent was born, what type of tax form was filed, how much income was earned from interest and dividends). But the resulting output is similarly precise, providing information on specific types of federal, state, and institutional aid.

Others, like one used by Southwestern Oklahoma State University, require the student to answer just nine basic questions, but provide only a single number for “estimated grant aid” that does not, for example, take account of students’ eligibility for state merit-based grants.

Unfortunately, some of these calculators are likely to increase families’ confusion. For example, the output of the calculator of the University of California, Los Angeles, (for a single-parent family with $30,000 in parental earnings, $2,500 in parental assets, $2,500 in student earnings and $500 in student assets) included a “self-help award” of $9,200 – which sounds great until you read the fine print, which clarifies that this type of “award” means loans and work-study, not grants.

Finally, another story that is often missed in discussions about college costs is that for most students, the main cost of college is not tuition and fees, but the opportunity cost of time – that is, if one were not in college, what productive activity could one be doing instead? For example, while community college students may receive on average $800 more in aid than they pay in tuition and fees, this $800 is not going to cover all of the earnings forgone if the individual enrolls full time in school.

Unless, of course, that individual is already unemployed. Given current economic conditions, the opportunity cost of enrolling in college is lower than it has been in a long time. Granted, this is hard to get excited about. But the declining opportunity cost of college is one big reason that college enrollment rates have reached all-time highs in the last few years, even while published tuition prices have been rising.


People Need Help Managing the Cost of Higher Education

The answer is a certified educational planner.  These professionals work as your private financial aid consultant to ensure you maximize your cost savings.

by Jackson Sun

As state higher education officials ramp up efforts to help students complete college-level course work, they should include discussions on how to help them manage the cost of college.

Higher education is hard work, even for the most gifted students. It takes time and discipline to complete a two-year or a four-year degree. The same can be said for those pursuing academic certifications needed for many good-paying jobs. When people add work life, family life and a big financial burden to the mix, completing a college program becomes even more of a challenge.
With the constantly rising cost of higher education tuition, books and fees, it is little wonder that such a small percentage of those who enter post-secondary education programs are able to complete them.
For those who complete four-year programs, the average debt they incur has reached $25,000. And that is only the money they borrowed to pay tuition and other direct expenses related to higher education. Many people who finish school also carry additional debt ranging from credit cards to auto loans and even home mortgages.
For those who borrow money to attend college and who don’t complete their studies and qualify for higher-paying jobs, the debt burden can become a veritable financial millstone around their necks.
President Barack Obama’s recent executive order designed to ease Americans’ education-debt burden is a small step in the right direction. But its impact is limited, mostly applies to future graduates and doesn’t begin to address rising tuition costs. But it is a start, and those who will benefit should be grateful.
When combined with the lingering poor economy, significant college education debt is becoming the norm for middle-class Americans who want the best futures for their children and for themselves. According to a recent report from Education Sector, a national education think tank, education debt now surpasses total credit card debt.
These national trends are felt in Tennessee, which has seen more than a decade of college tuition hikes. With Tennessee ranking near the bottom for the number of college-educated residents, there is pressure to increase the number of people with degrees.
Tennessee also faces a high percentage of first-generation college students, many of whom are inadequately prepared for higher education, and who, statistics show, are at high risk of not completing their studies.
So, what higher education officials and many Tennessee residents are faced with are two colliding trends; the growing need for post-secondary education and a declining ability to pay for it.
We are pleased to see Gov. Bll Haslam and state higher education officals focused on increasing college completion rates. We hope their deliberations also factor in the rising cost of higher education and consideration of ways to help people manage it.