SPECIAL REPORT: The Rising Cost of College
With college tuition and other expenses increasing every year, it’s a struggle for most families to come up with the money to pay for all — or even a portion of it.
That leaves many students trying to find scholarships and applying for loans.
In this special report, Adam Bartelmay looks at the reasons for the increases and what families can do to ease the cost of college.
“I was originally going to go to CMU, but the cost for over four years was so expensive. So I’m going to do two years of community college to lessen up my costs.”
Galya Williams is enjoying the college experience on a smaller scale to start. She’s spending the first two years of it at Northwestern Michigan College in Traverse City.
She says the community college helps her get core courses out of the way instead of shelling out a lot more money for them at a traditional four year school.
“That’s what really deterred me from going to a big university.”
In addition to having a job at a local restaurant, Galya has several other ways to make sure she can cover expenses. “Either doing student loans, a lot of them. Scholarships and Pell Grants.”
College gets more difficult to pay for because tuition, room and board and book costs go up every year.
“Our average is probably someplace in the neighborhood of three percent to four percent per year.”
According to the College Board, tuition at public colleges and universities in the U.S. increased on average 2.9-percent in the 2013-2014 school year. While the increase was 3.8-percent at private schools.
NMC President Tim Nelson says the school’s costs continue to rise, while steadily losing state money.
“If the state funding declines, property taxes stay the same, you absorb some of the changes in your cost structure through efficiencies. And the rest, yes. They have to be absorbed by increasing revenue through tuition or finding other revenue sources.”
Pam Palermo is the Director of Financial Aid at NMC. She says students needing help paying for college should fill out what’s called a Free Application for Federal Student Aid or “FAFSA.” That will determine how much they’re eligible to borrow.
But she has this warning: “You don’t need to borrow it all. Just borrow what you need.”
She suggests students do that by formulating a cost of attendance budget. Meaning how much will you need for tuition, room, board and books.
“Look at your price options and where you’re going to get the best bang for your buck. Parents need to talk to their students and say this is what I have saved, this is what I don’t have saved. I don’t want you to go in debt. We could set up a payment plan.”
For parents who want to ease the burden of college for their kids and not see them saddled with debt, there are a number of good ways to save.
“Even a small amount of money can have an impact.”
Raymond James Financial Adviser Bob Fenton says there are a couple of investment options. A 529 Savings Plan is where you invest in mutual funds and are portable to any state. Then there’s the Michigan Education Trust, which is a pre-paid college funding mechanism, but students must use it to go to an in-state college.
“We can kind of help sift through, if you will, all of the aspects of the plans that are available to them and help them ascertain which ones are best at this moment in time.”
Besides working, Galya did some preparing before college to find ways to get the money she needs. She says it went a long way toward launching her education.
“Yeah. That’s a big concern. That’s why scholarships were so important to me my senior year and signing up for them and being part honor society so I could get the opportunity to get a scholarship.”
When Galya is finished at NMC, she plans to enroll at Bowling Green State University in Ohio.