By Chuck Nickel
College Nannies and Tutors
These words ring true for any family as it begins the college research process for children. Most families begin with best intentions, but find themselves stopping at one unsettling point: the annual average cost of attendance. That’s when shock sets in.
Costs of attending college are steadily rising. In 2011, average tuition at four-year public universities rose eight percent, and private university tuition costs rose four-and-a half percent. Increases in public school tuition rose faster due to decreases in funds available to the universities, throwing more of a burden on students.
What can be done to reduce the overall cost of college education?
- The first step is to reduce the time it takes to earn a degree. Success on Advanced Placement tests and taking high-school courses that are accepted both for high school and college credit can effectively reduce the number of hours required for a degree by a significant amount (possibly one semester or more).
- Another option is going the community college route for the first two years. The cost of completing general education credits at a community college can average about $2,700 per year versus an average of $8,000/year if living at home and attending a four-year public university. The caveat here is to make sure the college you plan to attend afterward will accept the credits you wish to transfer.
- An important statistic to evaluate when researching colleges is the four-year graduation rate. Schools with high graduation rates tend to push students in a direction to complete their degree work in four years. These schools may allow students to delay declaring a major until the middle or end of their sophomore year and emphasize coursework in the first two years that will count toward almost any major.
- A key to garnering additional grants and need-based aid is to properly allocate your assets so that when the FAFSA (Free Application for Federal Student Aid) is completed, these funds will not be counted against the family. Families need to consult with a financial planner who specializes in the college funding process to insure their assets are properly allocated.
- Completing the FAFSA early and accurately is also important. Contrary to popular belief, you do not have to wait until you actually file your income tax statement to submit the FAFSA. It can be completed using estimated tax data. By submitting early, you are at the head of the line for dollars that will be awarded. Late filing means that much of the available funds will already have been allocated.
Private University vs. Public
Don’t rule out attending a top-ranked private university because you don’t think you can afford it. Just comparing the tuition costs of a public university versus a private institution doesn’t tell you the whole story. Financial aid is an important part of the equation.
Four myths about private universities:
- Most students can’t afford the tuition cost of a private university.
Truth: Financial aid always takes tuition cost into account. Overall, 83 percent of students at private universities receive aid, which means students at all income levels receive help. Average cost of private tuition vs. average net cost after financial aid: $25,140, average private tuition; $14,930, average net cost. (Source: College Board 2008) Currently, 64 private universities in the U.S. have endowments exceeding $1 billion.
- Public universities provide better deals for students.
Truth: Most public universities cannot offer the same types of financial aid packages as private universities. A better financial aid package reduces a family’s out-of-pocket expenses. Average financial aid package at private vs. public university: $10,200, private college; $3,700, public college. (Source: College Board 2008)
- The personalized education at private and public institutions is the same.
Truth: Private institutions spend more per student. This can result in a more personalized education where professors know students by name. Average expenditure per student at private vs. public baccalaureate colleges: $21,200, private college; $10,600, public college. (Source: College Board 2009)
- Graduating in four years means a degree from a public university costs a lot less.
Truth: A higher percentage of students attending private universities graduate in four years or less, when compared to students attending public institutions. Graduating in four years could reduce a student’s overall tuition costs and the time it takes to get into the job market. Percentage of students graduating in four years at private vs. public university: 57 percent, private college; 29 percent, public college. (Source: Oregon Independent College Association 2006-2007)
There are many factors to consider when financing a college education. The most important thing is to find the right college for your student. With proper planning, asset allocation, academic achievement and a well- rounded resume, your student can get into the school best fitting his/her need.
Note from Richmondmom.com
Prepare ahead, consider the options, and decide what’s best for your child’s education and future. In Virginia, be sure to take advantage of VA529 Plans and opportunities and start saving early too.
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