Financing College
Education

Paying for College: 5 Common Misconceptions

(3/26/2007) Paying for college is an undertaking many students and families fear, especially as prices rise and associated costs increase.
But many prospective college students and their families are worried because of misinformation. Every year, students and families ask the same questions, and every year, the wrong answers are circulated about college costs, financial aid, and more.

What are these common misconceptions about paying for college?

“It's too expensive.”

A college education is still a good deal, despite the rising tuition and costs. In fact, college education is associated with earning an average $1 million more over a career compared to high school graduates.
While many news reports focus on the excess in college tuition, such as private schools that charge upwards of $30,000 per year in attendance, this is actually quite rare. According to the American Council on Education (ACE), of the 3,600 colleges and universities in America, 200 charged $20,000 or more for tuition and fees in 2002-03. Nearly 80 percent of full-time undergraduates at 4-year institutions face tuition of less than $8,000.
These costs may still strike fear in the heart of many a student and family. But consider this: nearly 20 percent of traditional-aged undergraduates come from families with income below $25,000 per year, according to the ACE. How? Rising financial aid. Student financial aid in 2005-06 rose to a record level of more than $134 billion.

“We won't qualify for financial aid.”

Many students and families are concerned about qualifying for financial aid for a myriad of reasons. Some worry that due to a secure income and savings, additional aid will be out of the question. In fact, aid is intended to make a college education available for students of families in many financial situations. No matter income or savings, financial aid may still be available after taking into consideration other family members in college, home mortgage costs, and other factors. Some students worry that they won't qualify for aid based on their school performance. Many scholarships are awarded on the basis of good grades, school activities, or sports prowess. But the vast majority of aid? Based on financial need. Finally, many students and families worry that they'll miss the financial aid boat based on race or ethnicity. In fact, very little aid is awarded on one basis only, including race or ethnicity. According to an ACE 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. Financial aid, then, is based on a number of factors in a complex equation, one that seeks to improve EVERY student's college opportunities. “We shouldn't even consider private schools.”Since private schools are traditionally more expensive than public, many students and families will remove them from the equation. However, this can be a mistake. While tuition and costs may be higher at private schools, the proportion of aid awarded is similar to public schools.

“Cost-cutting methods will negatively affect my academic and social life.”

Many students consider a job during college to defray costs, but worry that they will struggle with academic success. In actuality, research shows that students who work a moderate amount often do better academically. An on-campus job in particular, perhaps one related to career goals, can be a great way to pay for college costs and get relevant work experience.

Some students may think that living at home during college is the best way to cut costs. Rather than pay for room and board, students will be free to consider more schools and focus their energy. However, have you considered commuting and parking costs? Have you thought of the missed opportunities from living and working on campus? Living in campus dorms or in the campus community can be quite affordable, and much more meaningful and useful to a college education in the long run.

“Community colleges are only for vocational education.”

Looking at community college options? So do many smart students and their families. Community colleges offer career and technical education, but also a low-cost course of academic classes that can be transferred to a four-year institution. Open admissions, nearby locations, a wide array of courses, flexible class schedules, and low tuition prices make community colleges readily accessible to everyone.

Learn more about ways to fund college education, frequently asked questions, and tax break details in our continuing series.