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Putting College Costs Into Perspective

Posted By Jim On 02/28/2007 @ 6:05 am In Personal Finance | 4 Comments

If you have any high school kids, you probably have paid particular attention to news articles that talk about the rapidly increasing price of college these past few years. At many private schools, the price of a single year of college is over $30,000, which puts a four year degree at around $120,000 per child. Those are scary scary numbers for anyone who ever plans on having kids who will want to go to college but the College Board, a not-for-profit membership association that tries to connect students with colleges, puts these into perspective – which will probably take a heavy weight off some people’s backs and something I thought worth writing about because the big boys won’t (it’s not as exciting to dispel myths as it is to perpetuate them).

College Is Too Expensive – The average lifetime earn of a college graduate is a million bucks more than someone who is just a high school grad and the statistic doesn’t take into account whether you went to a public or a private school. The average yearly cost of a 4-year public school is only $5,836. Six grand is a lot more palatable than thirty and within the reach of more folks than thirty.

Not Enough Financial Aid Around – Over $134 billion was handed out in financial aid and while the amount in grants (free money) may have decreased, but its been replaced with low-interest loans, college grants, and other grants. Personally, I received about $10k a year in grants from the school and an extra $8k in Stafford Loans.

If I Apply for a Loan, I Have to Take It – This is actually a misconception a lot of people have about any loan, just because you apply for a loan doesn’t mean you have to accept it! Most people who apply for a loan will accept it but sometimes you just want to see what sort of rate you’ll get and that rate plays an important role in your decision, so if you get a rate that’s not favorable you can always walk away. Think about if I wanted to lend you $10, you don’t have to take it. (if you had to take it, then they could just say you have a loan for 20398420398423% interest…)

There are more myths in the article so give it a look see.

Source: College Board [3]


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[3] College Board: http://www.collegeboard.com/student/pay/add-it-up/396.html

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