College Tuition by the Numbers

A college-bound student is likely to pay a huge price for that coveted sheepskin – $12,127 a year to cover tuition, fees, and board and room at a public institution. That’s more than $29,000 per year at the average private college, according to the College Board.

The rest of the story is not much better. If college costs continue to inflate at the same rate as last year (6.6%), those same figures are $38,316 (public) and $91,627 (private) for a child born today. What’s more, congressional budget cuts mean variable-rate federal loans, with rates as low as 4.7%, will lock in July 1 at higher fixed rates. Stafford Loans, the most popular of all, will be fixed at 6.8% while Parent Loans for Undergraduate Students (PLUS) will be fixed at 8.5%.

The College Board tells us that last year 13 million college students in the United States received $143 billion worth of financial aid. The American Council of Education estimates that more than 10% of those who didn’t apply would have been eligible for some aid.

There is plenty of financial aid available to those who learn how to use the system and resources available, according to student loan originator, Sallie Mae. On January 1, the Department of Education began accepting the Free Application for Federal Student Aid, or FAFSA.

The FAFSA process is needs-based, taking into account parental and student income, age and assets and it determines how much the family is expected to contribute toward the student’s education. If this number is less than the amount charged by the selected college, the student is eligible for the difference, which can come in the form of grants, scholarships or low-interest loans.

To understand the FAFSA process, go to the web site, www.finaid.com where you can input your financial information and calculate an estimated family expected contribution figure.

Sallie Mae’s website connects to a database with more than 2 million scholarships worth roughly $15 billion. The database lists the scholarships for which students qualify, based on their financial needs, grade point average and academic or extracurricular interests.

For families facing college expenses, those likely to qualify for financial aid should strive to get into the best colleges possible and those likely to not qualify should seek out the most economical college programs. In the case of the former, if the family is expected to contribute $10,000 and the cost at an Ivy League school is $45,000, the family is going to pay $10,000 whether the student goes to a state college next door, or to the Ivy League institution.

In the case of the latter, parents and student should shop for the best school possible within their budget. The student might consider enrolling in Advance Placement classes while in high school to earn college credits. These credits may cut the college stay from four years to three – a significant saving!

Scholarship and aid money typically is handed out on a first-come basis. So learn the system, apply early and apply often.