Kids want to go to college, but the stubborn question that refuses to go away is – at what cost? College education has never been cheap, and it’s not about to get any easier moving forward. According to the College Board, college tuition fees continue to skyrocket – 3% to 5% per year.
The last recession made it more difficult after the public fund’s tap ran dry. Since then, college tuition fees for a four-year program at public institutions have jumped a whopping 71 percent over the last 10 years. Private colleges for the same course and time frame jumped 54 percent.
It’s these figures that are keeping students worried more than their parents are. With such an increase in tuition fees, it’s no wonder the overall student loan debt in the U.S. hit an all-time high—$1.6 trillion. This translates to an average of $34,144 per student, representing a 62 percent raise over the past 10 years.
Good Old Days
Back then, the process was predetermined and easy to follow. Attend a high school, get good grades, and get admitted to a great college. Get good grades again, graduate, and get a job. Things have changed today.
The only happy moment comes during high school graduation. Everyone wears a smile and hugs fly everywhere. However, the happy moments are short-lived, and a few days later, the reality dawns. College. It’s the new worry in town and for good reason. A college education is rising faster than the rate of inflation.
The 10th annual “How Youth Plan to Fund College” survey conducted by the College Savings Foundation revealed how high school students are increasingly worried about the rising cost of their dream.
In the survey, a majority of the respondents, 83%, indicated affordability was a major factor when choosing a college according to a research group based in Washington. This is an 8 percent rise from last year’s 75%.
Furthermore, another 71%of students said college fees could be a major determinant of whether they would attend college or not. This represents a 6% rise from 65% recorded last year.
The worries don’t stop with high school students; those in their first year of college share the same worries, according to a survey conducted by the Cooperative Institutional Research Program.
The survey found over 55% of first-year students are in some way concerned about their college tuition fees while another 13.3%share concerns about financing their higher education. Another survey by the Higher Education Research Institute arrived at the same conclusion.
Indeed, the cost of funding a college education continues to rise every year. Add to it the rising cost of living, and life for a college student can be almost unbearable. In fact, California State University Fullerton administrators said they lost more students to credit card debt than to academic failure, presenting a new angle to the whole college-cost argument.
The Curse of the Plastic Card
College tuition fees aside, it would be wrong to ignore the social life of a college student. They need to eat, move from point A to B, and also buy books every year, and clothes once in a while among other expenditures.
The main source of funding is a credit card, and according to the U.S. Federal Reserve, 43 percent of students have a credit card while still in high school, while 73 percent of those without one will have one before they graduate from college.
Another 25% of students will use credit cards to cover their tuition fees and a few months down the line, but 41% of them will have to come face to face with a debt balance. Now, while many students are concerned about college financing, not many understand how credit cards work. Because of this reason, many of their parents get into huge piling debts that become hard to pay off. However, many of them are trying to consolidate these numbers of loans taken from the various source into a one. An affordable loan can be found with the help of nation 21 loans website.
The real problem stems from the education they receive in school. Many educators—including parents—shy away from talking about money matters. In turn, these kids assume credit cards are some genies let out of the bottle: Rub it and get what you want at no cost.
The current generation is more educated and more cost-conscious than previous generations despite inadequate money management education. For this reason, students are getting involved in college choices based on tuition fees.
For instance, 40 percent of students said they’d opt for a public college while another 26 percent said a community college would make more financial sense. Others, just over 1 out 10, said apprenticeship programs and technical schools aren’t out of consideration.
As you may have noticed in this article, it seems that both parents and students prefer staying away from private schools because of the fear of ultra-high fees. However, skipping past private colleges may prove to be a costly mistake because, believe it or not, they offer the best financial aid.
According to the College Board, college tuition fees for a four-year program at a private university average $48,510 while public universities are cheaper by more than half—$23,370. This may seem too expensive, but two-thirds of full-time students in private universities receive financial aid.
This brings the overall cost way down and The Princeton Review is evidence to this. The Review ranked colleges by the amount of aid students receive and how satisfied they were with the aid, using data from the start of fall 2017 to the summer of 2018. The results will probably shock you.
Private universities occupied the top spots despite their high fees. However, their financial aid packages make these institutions more affordable than public universities.
With such financial aids up for grabs, it’s no surprise that 54 percent of students say they expect to receive this aid, in addition to having to take out student loans. A similar percentage said parents have a savings account for the sole purpose of a college education. Another section, about 48 percent, said they would turn to relatives to fund their education.
In a report, How America Pays for College, by Sallie Mae, savings and income contributed to less than half of the undergraduate’s cost. Grants and scholarships, which is money you don’t pay back, took up 28 percent of the total cost.
Borrowed money took up 24 percent of the total expense, while friends and relatives filled the remaining needs.
A college education may be expensive, but still, many parents and students believe college is an investment worth every dollar. This means that not many people make their decisions based on college costs alone.