Paying for College
Myths and Realities About Paying for College
Myth:
College tuition costs more than $20,000 a year.
Reality: Of the 3,600 colleges and universities
in America, 200 charged $20,000 or more for tuition and fees in 2002-03.
Nearly 80 percent of full-time undergraduates at 4 year institutions
face tution of less than $8,000.
Myth: Private colleges are always
more expensive than public colleges.
Reality: On average, private colleges usually
cost more than public institutions, even after aid is deducted; however,
there are instances in which a private college is less expensive, after
student aid, than a public institution. For example, the cost of a
private institution, less student aid, often is less than a public
institution outside one's home state.
Myth: Only the very rich can afford
college.
Reality: Nearly 20 percent of traditional-aged
undergraduates come from families with income below $25,000 per year.
The federal government, states, and institutions all offer financial aid
to help low-income students afford college.
Myth: The middle class gets
socked by college costs -- there's no help for them.
Reality: A wide variety of aid programs are
available to help middle-income families, including many grants and
scholarships as well as tax incentives and benefits related to higher
education. At public 4 year colleges, about 40 percent of students with
family income between $40,000 and $80,000 receive grants averaging
$2,900. At private institutions, almost 75 percent are awarded grants or
scholarships that average $9,300.
Myth: It actually hurts you
to save for college because you get less financial aid.
Reality: Those who save will be expected to
contribute more toward their children's education than those who don't
save. However, the formulas for determining the expected family
contribution count income far more heavily than savings, so the
difference is usually not substantial. Furthermore, a family that saves
will have the funds necessary to meet their expected contribution, while
a family that does not save may have to borrow -- with interest charges
more than making up for the smaller expected contribution.
Myth: You really don't need
college to be a success -- look at Bill Gates.
Reality: Bill Gates' story is exceptional. Today,
the average annual income of full-time workers with a bachelor's degree
is almost 45 percent higher than for those with a high school diploma.
Those with an associate degree earn 19 percent more than high school
graduates. Today, some postsecondary education or training is necessary
for almost every good job.
Myth: Only big-time athletes
get scholarships.
Reality: In 1999-00, less than 1 percent of
undergraduates received athletic scholarships. Most student aid is
awarded on the basis of financial need -- not athletic talent.
Myth: Only minorities get
extra help.
Reality: The majority of student aid is awarded
on the basis of financial need. Very little aid is awarded solely on the
basis of students' race or ethnicity. According to a recent survey of
financial aid officers, less than 10 percent of institutions' budgets
for non-need-based scholarships go toward scholarships for members of
specific minority groups. Generally, students from racial or ethnic
minority groups are more likely to receive scholarships because they are
more likely to have financial need.
Myth: Only white people know
how to pull the strings to get to college.
Reality: Socio-economic status and previous
experience with higher education are much more important in determining
who goes to college than race or ethnicity. The admissions and financial
aid process is daunting for many families, but especially for those with
no previous college experience. Families can get help from a number of
sources. This website is a great place to start. Libraries and high
school guidance offices offer resources and assistance. In addition,
many communities have a federally funded Educational Opportunity Center
with trained counselors to help students and parents through the
admissions and financial aid process.
Myth: It's not what you know
when it comes to college and financial aid -- it's who you
know.
Reality: It is most important to forge
relationships with people who can provide solid information and advice,
such as high school guidance counselors and college admissions or
financial aid personnel.
Myth: Community colleges
offer only vocational education.
Reality: Community colleges provide a wide range
of educational options, all at a low cost to students. In addition to
career and technical education, community colleges offer the first two
years of academic course work to transfer to a four-year institution.
They also help workers upgrade their skills and provide courses for
lifelong learning and personal enrichment. Open admissions, nearby
locations, a wide array of courses, flexible class schedules, and low
tuition prices make community colleges readily accessible to
everyone.
Myth: Colleges charge
whatever they want -- they've got a monopoly.
Reality: Public and private colleges set their
tuition in very different ways. Generally, state policy makers set
tuition for public institutions. Tuition decisions are driven by the
funding colleges receive from the state. When states cut their
appropriations for colleges and universities, they have to raise tuition
to make up at least part of the resulting budget shortfall. Private
colleges set their own tuition, but they operate in a very competitive
environment. They have to construct tuition and aid policies that allow
them to fill their classes and offer the programs and facilities that
will keep them competitive.
Myth: There is no basis for
the soaring increase in college prices.
Reality: Many factors influence college cost
increases - technology and facility costs, faculty salaries, student aid
expenditures, and cuts in state appropriations to name just a few.
Despite cutbacks in state appropriations and decreasing endowment values
colleges are trying to do even better, searching for new and innovative
ways to cut costs and minimize tuition increases.
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