Each year The Lawlor Group conducts extensive research of their own, and also reviews other available research, to identify trends in the higher education marketplace. One of the trends they identified is called “The Power of Perception.” Their research indicates that “Economic conditions are influencing the way prospective students and their families view the value of attending a particular college.” Some of their specific findings include:
• What students are paying: Lawlor reviewed College Board statistics which found that most students attend a college with tuition and fees of less than $11,100 per year, but for more than half of students at private colleges, tuition is over $31,000.
• What students are borrowing: Students appear to be borrowing more than recommended, and are quickly ending up in default on their student loan debt much more than anticipated (Federal Student Aid).
• Tuition increases may be outpacing median household income: In 2011-12, full-time dependent students had an average out-of-pocket cost (total price of attendance minus all aid, including loans) of $18,100 at four-year private institutions (NCES). According to a Discover student loans poll, 79% of parents of college-bound students are “very” or “somewhat” worried about having enough money to contribute toward their child’s college education.
Other polls suggest that parents may be restricting the colleges to which their children apply based on tuition price alone. In fact, Sallie Mae found that 67% of families eliminated colleges based on cost at some stage during their research and admission process – either before researching, after research but before applying, after admission, or after financial aid. However, these parents may be doing their students an injustice by eliminating a college too early in the process.
It Ain’t Over Until the FAFSA is Filed
The only true way to know whether a college is too expensive for a family’s budget is to complete the entire financial aid application process. This starts with the FAFSA (Free Application for Federal Student Aid) and finishes with a SAR (Student Aid Report). The FAFSA determines how much a student might be eligible for of the over $150 billion in grants, loans and work-study funds available each year. In addition FAFSA information may be used to calculate eligibility for state and school aid.
FAFSA forms are available now. It is important to complete your form early as some funds are granted on a first-come, first-served basis, but it is even more crucial to make sure your FAFSA is completed correctly. The Department of Education reports that “the majority of people fill out the FAFSA in such a way that they do not receive all of the aid they are eligible for.”
Make sure you get all the facts about finances before ruling out any college. Set up an appointment now for a financial aid strategy session with College Financial Aid Advisors (CFAA).