Paying for College – Can we afford it?

Posted by: Claudine Vainrub, Principal of EduPlan on Feb 2 2010 / Comments (0)

By Claudine Vainrub, Principal of EduPlan

With tuition rates on the rise, families question the value of a college education, while they dig deep in their pockets to make ends meet to provide opportunities to their offspring. As recently reported by the 2009 Trends in Higher Education report published by College Board, fees at public four-year colleges and universities across the U.S. have increased by an average 4.9%, faster than the rate experienced in the previous two decades. In inflation-adjusted dollars, this increase represents 20% for public four-year colleges and universities and 15% for private not-for-profit four-year schools between the years of 2004-2005 to 2009-2010. This tuition rate growth surpasses the general inflation rate, causing parents of college-age students to be concerned regarding the decrease of affordability for their families when considering paying tuition for their kids.

Tuition rates in Florida have been increasing at a much higher rate than that experienced in the rest of the country, at an average of 15%, and it is expected for them to continue on the rise for a few more years. The reason for this tuition rate increase has to do with the fact that Florida public universities and colleges offer tuition rates well below the national average. State officials express that these hikes will not cease until Florida tuition gets much closer to that national average. While Florida residents take advantage of annual tuition fees of $3,000, the rest of the country is closer to $7,000.

Tuition hikes seem overwhelming when looked at from this perspective. However, what students actually pay to attend college can be quite different to the full ticket price requested by colleges. With grants and federal aid, private scholarships, work-study programs and other financial aid, the average amount paid by students attending a private not-for-profit college is $11,900 coming from an average tuition of $26,273, as reported by College Board. This example shows that the first tuition rates provided by colleges when admitting a student can be far from the ones the student will end up paying to attend that college, after receiving their financial aid packages. As much as the tuition costs have increased, so has the amount of financial aid provided by all resources that take part of the process – federal government, state government, educational institutions, corporate and private sponsoring parties, who provide assistance in the form of scholarships, grants, work-study programs, federal and private loans.

Another interesting statistics is, as College Board reports, 53% of students attending four-year institutions pay less than $9,000 per year in tuition fees. When we hear that tuition rates are over $35,000 per year, we scratch our heads thinking “how can we afford this?” With all available resources, published tuition rates certainly do not have to be the rate we pay to attend college.

The key is to plan ahead and not wait for the senior year in high school to think – how will I help my child get financially through college? With 529 plans and the Florida Prepaid Plan, among others, we have ways to start actively saving for college. Another way to make tuition fees less costly is to find alternatives such as enrolling in a two-year institution to achieve the Associate’s degree and continue later on within a private or public four-year institution. With forward thinking and action, we can secure tuition rates at a lower cost and make education affordable to our family, taking the right steps towards helping our daughters and sons achieve the college education of their dreams.

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