Dollars & Sense: The Cost of a College Degree
Author: BeginCollegeNowAccording to the College Board the cost of getting a college degree at four-year public colleges and universities is rapidly rising by 6.6 percent.
The cost of higher education differs between public and private institutions. State or public colleges cost less as they receive money from the government as opposed to private institutions that receive less financial assistance. In general public colleges cost $3,000 to$10,000 per year whereas private colleges cost $10,000 to $60,000 or more per year.
In addition to tuition, colleges have other fees including the costs of books, supplies, transportation, room and board and personal expenses. In general, these additional fees can set a student back between $5,000 and $15,000, depending on the institution.
With the mounting cost of higher education the ability to finance a college education can be daunting. Most students finance their education through a combination financial aid, grants, scholarships, savings plans, loans and work-study programs.
Loans are one of the most common funding options. Loans are an instant line of funds that must be repaid with interest. In general, student loans have lower interest rates and are usually easier to obtain than other loans. There are many types of education loans such as federal student and private loans. Federal student loans tend have better repayment rates and are available to more students.
Grants and scholarships are merit-based financial awards that don’t have to be paid back. Grants are generally given based on financial need and eligibility is determined by grades and skill such as in sports, music or art. There are three federal grants: the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant and the Academic Competitiveness Grant. In order to be considered for a grant, students need to fill out the Free Application for Federal Student Aid (FAFSA).
Scholarships are earned based on a student's academic merits, athletic performance and application. Applications for scholarships are usually extensive with specific deadlines and requirements.
A work-study program offsets the cost of college. This program, usually part of a financial aid package, allows students work part-time jobs to earn money to pay for tuition.
Another college funding option is a savings plan such as the 529-saving plan. This long-term, non-taxable savings plan is generally established by parents when a student is young. Any unused funds from this type of savings plan can be carried over to another child in the family.
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