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This is the first in a series of articles examining the impact the high cost of college and the student loan crisis are having on families. RSC Your College Prep Expert is dedicated to making college affordable to all families. See how we do it here.
Sarai was a good student from California interested in attending one of the state’s top private colleges, each with tuition over $50,000. Her worreid parents wanted her to keep her goals a bit more modest – maybe a state school or community college.
Sarai was about to become the first person in her family ever to go to college, even though her parents had no idea how they were going to pay for it.
Increasing College Costs
· Tuition has jumped 530% since 1982. It has jumped 300% since 1990 and 150% since 2000.
· Tuition has risen an average of 6.4% per year since 1981.
· Room and board has doubled since 1982.
· Over the past 30 years, college costs have risen more than twice the rate of overall inflation.
Sarai’s parents were concerned that she would be saddled with student loan debt for a decade or more. They’d heard the stories about how much college students and their parents owe the federal government and private lenders.
Student Loan Debt Totals
· According to one federal government estimate, the nation now owes $1 trillion dollars in student loans. This is more than people owe in credit card debt and nearly the size of the federal government’s annual budget deficit.
· Families borrow more than $100 billion per year.
· The average 2011 college graduate owed $26,000 in student loans. FinAid.org estimates that the average 2012 graduate owes $29,000.
· In 2012, the federal government ended the six-month grace period for subsidized Staffor Loans. Students must begin repaying the loans with interest immediately upon finishing college.
· In 2010, 67% of college students had student loan debt, nearly twice the rate in 2000 (35%) and more than triple the rate In 1992 (20%).
Sarai’s family faced one additional problem, a problem dogging nearly every
college student in the country – diminishing state and federal financial aid assistance.
Financial Aid Cuts
· In 2011, Pell Grants covered just 34% of student need; in the 1970s, it covered 67%.
· Between 2006-2011, 43 states cut funding to higher education. Many states reduced or eliminated funding to need-based aid programs that benefit low-income and middle-income families.
· In one 18-month period, California – Sarai’s home state – raised tuition at public universities 32%.
Reasons for the Rising Cost of College
Taken together, these three factors – tuition hikes, student loans and diminished aid – have led to exorbitant costs for both public and private colleges, but another major reason for the increasing costs is the competition among colleges themselves.
In one sense, college pricing works like retail: the higher the price, the better the product. Specifically, the more a college costs, the more prestige it carries with students and employers. As a result, pricey colleges receive more applications, turn down more students, appear even more exclusive and can raise tuition again.
Students and families are also contributing to the problem by demanding thoroughly modern and hig-tech student centers, sports facilities and dormitories. The money for these projects has to come from somewhere. With diminishing state and federal resources, it’s coming from students in the form of tuition hikes and additional fees.
Finding a Way to Pay for College
Sarai’s dilemma about what type of college to attend – state or private – was answered by the RSC. program. The handbooks and tutorials explained that college pricing may be like retail, but it’s also like buying a car – there’s plenty of discounting going on. After using RSC’s detailed college-cost and financial aid, Sarai discovered that those expensive private colleges were less than most state schools.
Encouraged to pursue her education according to her original plan, Sarai used the RSC program to put together great college and financial aid applications. She submitted applications to her top choices and received outstanding financial aid offers from four of the five colleges to which she applied. Two of them met 100% of her need.
By using the RSC program, Sarai successfully escaped the high cost of college that’s plaguing far too many families today (much to her parents’ relief!).
Today, Sarai is a student at Pomona – all because her parents had the wisdom and foresight to enroll her in a college prep program that works extremely hard to help students avoid the staggering cost of college.
For more information on the RSC program or to enroll today, call 800-898-4636 or sign up here.
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