Financial Aid Facts: How Are We Going To Pay For This?
The single most important thing a new college student or parent of a new college student can do to prepare financially is to make a budget. Making a budget requires knowing two things: 1) how much is college going to cost? and 2) how much money do I have to cover these costs? Our section titled How Much is this Going to Cost? can help you answer the first question. Every school will have different financial aid requirements and costs will vary. Our Cost of Attendance worksheet will help you start putting some real costs together and start you on your way to a sound financial aid plan.
If you're like most Americans, you probably don't have enough stored away under the mattress to simply write a check for your college bill. In fact, a recent survey by Sallie Mae found that 61% of all parents of incoming college freshmen in 2007 said that they began initial discussions about the best way to pay for college after the child entered high school, down from 69% in 2006 The survey also found that 82% of all respondents surveyed in 2007 believed that a college education is worth the cost, although fewer than half (42%) believed that college is affordable. But you'll be glad to know that help IS available. Most college students receive some form of financial aid. (Sometimes, it's good to know that you're not alone.) Following is the percentage of undergraduate students receiving financial aid in the 2003-2004 academic year:
- Two-Year Public Colleges 46.8%
- Four-Year Public Colleges and Universities 68.6%
- Four-Year Private Colleges and Universities 83.3%
- Private, for Profit (Proprietary) Institutions 89.9%
- Total (All Institutional Types) 63.2%
Does this surprise you? For 2008-2009 the College Board reports that the average tuition and fees for an in-state student at a four-year, public institution are $6,585 ($14,333 including room/board). For a private, four-year college: $25,143 ($34,132 including room/board). And for a public, two-year: $2,402.
On average, college tuition increases by 8% per year. That translates into college tuition doubling every 9 years!!! The good news is that few families actually pay the "sticker price." Once you deduct grants, scholarships and loans from the bottom-line, most families are left with a very manageable net cost.
Nearly $107 billion in financial aid was distributed to undergraduate students in academic year 2007 - 2008; the majority coming from either loans or institutional grants. Below is a list of financial aid sources for 2007 - 2008 (in billions) for undergraduate students.
The point being: financial assistance is available to all and knowing where and how to apply for it is the key to a better financial position. The financial aid process can be intimidating, but knowledge is power. The other sections of this site will equip you with the information you need to make better decisions regarding the financing of your college career.
U.S. Department of Education, National Center for Education Statistics, 2000 National Postsecondary Student Aid Study, Undergraduate Data Analysis System, May 2005.
The College Board. (2008). Trends in College Pricing: 2008
The College Board. (2008). Trends in Student Aid: 2008