Financial Aid News and Information
Myths and Realities About Paying for College
From www.careerexplorer.net
Myth: College tuition
costs more than $20,000 a year.
Reality: Of the 3,600 colleges and universities
in America, 81 charged $20,000 or more for tuition and fees
in 1997-98. When on-campus room and board charges are added,
about 300 institutions cost $20,000 or more before student
aid is deducted.
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: About 20 percent of traditional-aged undergraduates
come from families with income below $20,000 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. At public colleges,
about 30 percent of students with family income between $50,000 and $70,000 receive
grants averaging $1,700. At private institutions, almost 80 percent are awarded
grants or scholarships that average $6,000.
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 male full-time workers with a bachelor's degree is almost 50
percent higher than for those with a high school diploma. Those with an associate
degree earn 20 percent more than high school graduates. The earnings differentials
are just as large, if not larger, for women. Today, some postsecondary education
or training is necessary for almost every good job.
Myth: Only big-time athletes get scholarships.
Reality: In 1995-96, only 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. Since the early 1990s, annual price increases
have stabilized at 5 percent. Colleges are trying to do even better, searching
for new and innovative ways to cut costs and minimize tuition increases.
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