Myths and Realities About Paying for College

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Myths and Realities About Paying for College 

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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