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How Much Does College Really Cost?

Posted by Manuel Fabriquer on Thu, May 14, 2015 @ 10:15 PM
CollegeCostPHOTO

It’s not surprising that college these days can be fairly expensive. Educational costs are rising, particularly as universities strive to remain competitive. Fortunately, with scholarships, grants, and loan options, college is perhaps more affordable than ever. But what is the final cost of those four years? Though you may have a general idea of tuition amounts and the living expenses you’ll be responsible for, how much does college really cost?  

The Basics: Tuition, Fees,  Room & Board

In a recent College Board survey, reports showed that an average budget for an in-state public college was just over $23,000 per year. At a private college, a moderate budget amounted to approximately $46,000. These estimates include all of the basic, upfront items like tuition, fees, room & board, books, supplies, and other miscellaneous costs. Tuition and fees alone might be roughly ½ to ⅓ of that overall estimated budget and will vary greatly depending on your university and, at public colleges, your status as an in-state or out-of-state student. Fees are typically included within the tuition rate, and help offset the cost of student services such as library access, athletic facilities, and on-campus transportation. 

Room & board comprises your housing and dining options. This is a cost which can change dramatically based on many factors. Will you live in an on-campus dorm? An off-campus apartment? Will you have a meal plan and eat entirely at your school’s dining hall? Or will you cook the majority of your meals in your residence? These elements will determine whether you need to consider extra costs up front (such as signing up for a meal plan).

Books & Supplies

First-year students and their parents are often shocked by the cost of books and supplies when they begin their college education. If you’re in a science or mathematics major, you can expect to pay several hundred dollars each semester for your books. Other majors, such as fine arts, may have fewer books, but have hefty costs for supplies. It’s important to prepare yourself for these costs when heading to college for the first time. 

Other Costs

When estimating your cost of attendance, colleges typically include expenses that you won’t find on your bill, such as transportation, personal items, and clothing. Because these estimates will vary from student to student, it’s important to know your own budget for certain expenses. A student whose parents live far away from the university will probably incur larger transportation expenses when visiting home during breaks than a student whose parents live in the next town. Such miscellaneous expenses could amount to several thousand dollars per academic year.

Paying for College

Despite what may seem high costs, there are many ways of financing your college education. If you’re fortunate enough to receive scholarships or grants, this is money you do not have to repay. This will drop your costs significantly. Taking out federal or private loans is also an option, which a vast majority of parents and students choose to take advantage of. Remember, however, that all loans will need to be repaid, and these amounts gather interest. If you take out a substantial loan, you may end up paying a great deal more money than the original amount of the loan itself over the length of your repayment period.

No matter what, you should not let costs dissuade you from the incomparable benefit of receiving a university education. For more information on affording college, please contact us directly at College Planning ABC. 

Tags: strategies for college, college planning abc, college consulting, college planning, college applications, money for college, Manuel Fabriquer, College Admissions, attending college, Paying for college

Understanding Loans Before You Borrow

Posted by Manuel Fabriquer on Fri, Apr 17, 2015 @ 3:39 PM

Loan Photo WEB

While a college education can be expensive, it is an invaluable resource, helping you excel in your chosen career field and contributing to your all-around personal development. Fortunately, students these days have options for financing their higher education plans. Alongside scholarships, grants, and family contributions, students can choose to take out federal and private loans to help pay for their educational costs. Taking out a loan is a serious consideration, and it is important that you fully understand the facts and obligations associated with loans before borrowing.

Borrowing from the Government

If you plan to take out loans for your college education, federal loans are the way to go. Your university will determine your possible loans in line with information gathered from your FAFSA. With a fixed interest rate on federal loans, you’ll better know how much interest you’ll be paying over the life of the loan. Conversely, private loans have variable interest rates, which can present a financial challenge should the rates rise. As well, federal loans offer repayment options and programs for those who are experiencing financial hardship.

The most common type of federal loan is the Stafford Loan. These loans have yearly and overall borrowing limits, which differ based on what year you are in college, and whether or not you are financially dependent on your parents. Stafford Loans are divided into two types: subsidized and unsubsidized. Subsidized loans, contingent on financial need, do not accrue interest while you are still enrolled in school part-time or greater. Unsubsidized loans do accumulate interest, beginning when the loan is distributed. Unsubsidized loans also have a higher interest rate.

Other federal loans include Perkins Loans and PLUS Loans. Perkins Loans, with an interest rate of 5%, can assist students with up to $5,500 each year. If you’re a dependent student, your parents may qualify to take out a PLUS Loan. This loan is repaid by your parents and also has a fixed interest rate, making it a better alternative to a private loan. While you are enrolled in school, your parents do not need to make payments. A PLUS loan amount cannot exceed the total cost of educational expenses minus a student’s existing financial aid.

Things to Know

While private loans are an option, their variable interest rates and lack of structured repayment should make them your last resort. No matter the loan, it’s important to know that loans taken out in a student’s name are the responsibility of the student. Once you’ve graduated, you will be responsible for repaying your accumulated educational debt.

Fortunately, most federal loans have a grace period. Immediately following graduation, this grace period typically lasts 6 months. During this time, you won’t need to begin making repayments, but on unsubsidized Stafford loans, interest will still accrue. Many students take advantage of this grace period to commit to the job search in earnest. If you don’t find suitable employment or are experiencing financial hardship, there are options for repayment that can take into account your current income. This can temporarily lower your payments so that you can still continue to make them on time. In some circumstances, there are also options for forbearance and deferment, subject to the discretion of your loan servicer. Depending on your career interests, it may be worth investigating loan forgiveness programs, which can result in some reduction in your overall loan amounts.

 For further information on student loans, check out the following resources:

 https://studentloans.gov/myDirectLoan/index.action

 https://studentaid.ed.gov/types/loans

Tags: strategies for college, college planning abc, college planning, college applications, cost of attending college, money for college, Manuel Fabriquer, attending college, Paying for college, cost of college, student loans

What Do You Get the Graduating High School Senior?

Posted by Manuel Fabriquer on Thu, Jun 27, 2013 @ 6:00 AM

college technology

What do you get the graduating high school senior who has everything?  After all, high school seniors usually have all the latest clothing and gadgets, so it can be difficult to find something they don’t already own.  Yet, we all want to give that special student something that will make a difference in their lives.  This is especially true when it comes to close family and friends. 

The 529 Plan

Now it is possible to make a third party monetary contribution to some 529 plans.  Through a 529 plan, a student can save money in a tax favorable way to pay for college tuition and related costs.  In essence, you could contribute to a 529 plan whether the student just completed kindergarten or high school.

There are some new websites that have recently come online that allow third party contributions and even provide parents with a way to solicit gifts to their 529 plan.  However, parents should be aware that there are problems associated with these websites such as:

  • Problems with factual inaccuracies
  • Difficult to understand terms and conditions
  • High fees associated with the program
  • No help in selecting the right program

As with any financial instrument, it is recommended that you receive advice and direction on how to best maximize your investment. 

We are Here to Help

Should you be interested in learning about a 529 plan or perhaps other vehicles that can help your student pay for college, call our office today.  We have information that can be tailor fit match your needs and particular time frame.  We will navigate you to the best solution that will get you where you want to go.  Call today and don’t forget to also check out my next FREE workshop where I cover how to pay for college without going broke!

 

Tags: College Funding, cost of attending college, money for college, Saving for college, Manuel Fabriquer, College Admissions, attending college, Paying for college, cost of college

College Planning ABC asks is getting a college degree still a good idea?

Posted by Manuel Fabriquer on Sat, Aug 11, 2012 @ 7:00 AM

cornellSince the beginning of this year there has been a lot of talk and reports in the media debating whether going to college is still worth the investment in time and money.  The news media has emphasized the amount of recent college graduates who are either unemployed or working at jobs that didn’t require a college degree. 

Then there are the various reports showing the amount of student loans outstanding is now nearing $1 trillion. 

So, not only are some graduates not finding good jobs, they are leaving college with a large amount of debt.

It is no wonder that many students and parents may be wondering about whether they should attend college or not?  Let’s take a look at some real facts that may help answer this very important question.

The real numbers

In order to address these questions we need to look at the true numbers and then draw a reasonable conclusion from that rather than rely on sensational statistics that are designed to ramp up ratings. 

A college degree does matter

Looking at the Bureau of Labor Statistics, the unemployment rate for Americans with a high school diploma was 8.7%.  The rate of unemployment for those who attended but did not graduate was a bit lower at 7.1%.  Now, the rate for those with a bachelor’s degree or higher the rate was down to 4.1%. 

How about pay?

A worker with only a high school diploma earned $638 a week in 2011 according to the Bureau of Labor Statistics.  However, a worker with a college degree earned 39% more per week during the same time. 

Jonathan James an economist with the Cleveland Federal Reserve Bank stated his department has hard evidence that employers are willing to pay a higher wages for college graduates.  He has been able to demonstrate that beginnings back in 1977 employers were willing to pay 30% more for college graduates.  Yet, by 2010 those same employers were paying 60% more for college graduates than workers without a college degree.

So, based on these raw numbers employers are not only preferring college graduates, they are willing to pay more for them.

But what about the costs of attaining the degree?

The actual truth is that extreme borrowing is far less common than what we all hear about on the news.  Here are some hard facts from Department of Education:

  1. 90% of the students who graduated with a six figure debt were graduate and professional students (medical students accounted for 49% while law students were 36%).
  2. Undergraduates who attend a private university are 12 times more likely to graduate with a six figure debt.
  3. When you add it all up it is only 1.5% of ALL undergraduates and graduate students who actually end up with a six figure debt.

Bottom line

A college education is still a good investment if it is plan properly like any investment.  This means that not all colleges and universities are a good fit or provide the value you may be seeking.  Now, more than ever parents and students must know what the advantages and disadvantages of each school they are considering.  You need to look both at the cost and the product your student will be receiving.  This is where College Planning ABC comes in.

First, I make sure that the student finds not only the best college, but also finds the lowest cost possible to attend.  Secondly, we find programs that include internships or coops that will help in maximizing the employment potential for that student when they graduate.   

It is not uncommon on a first consultation to see a family who was on road to a high debt education. Then, after meeting with me we have significantly lowered the expense so that debt is no longer necessary.  Similarly, I have had students and parents come in with a firm college choice not knowing that there was another more prestigious college, with better job placement opportunities, and lower costs.

The bottom line is you need to be informed and I am hosting new Workshops this month to give you the tools and knowledge for you to make the best decisions.  Let me bring you the real facts and strategies that will keep your student from being a statistic.  Now is your time.Click me

Tags: college planning, College Planning News, College Admissions, Paying for college, getting a college degree

The Most Expensive Colleges and Universities in America Today

Posted by Manuel Fabriquer on Thu, Jun 14, 2012 @ 1:55 PM

college

We all hear stories and reports from various sources telling us that college costs are rising at an alarming rate.  However, it is not at every college.  Which ones are a bargain, and which ones are truly very expensive? 

Now, the Education Department has just completed doing an analysis of the nation’s most expensive colleges and university.  This report was commissioned by Congress and includes both private and public institutions. 

The purpose of the report was to shame colleges and universities who have been significantly increasing tuition prices.   However, the final report that was completed also includes the names of the least expensive private and public schools. 

It is important to understand what this report is including as costs.  All the schools are ranked according to their tuition net prices.  In other words the tuition noted in the report is the cost of the tuition after the average scholarships and grants are deducted.   This means the actual “off the shelf” price would be a lot higher.

Report Highlights

Here is something interesting that I gleaned from a quick review of the report.  Just looking at the net price listed in the report, it appears that eight of the 10 most expensive institutions are art schools or music conservatories.

Furthermore, as you can imagine just a bit over half of the priciest schools are located on the East Coast and another five are located in California.

Take a Look For Yourself

The Education Department has developed a simple interactive website where anyone can do a free search based on several factors and have an instant report.  You can access the site here: http://collegecost.ed.gov/catc/Default.aspx

Even Better

My college planning clients never have to worry about these reports because my clients know how to minimize their tuition costs below these published reports.  How?  Well, I share this information at my FREE College Planning workshops. 

You are now cordially invited to attend the next live workshop.  Take advantage of the summer to attend my timely and informative workshop that will give you the advantage you and your student need to get into the college of your dreams and not go broke.

Click me

Tags: College Planning News, cost of attending college, Paying for college