Why is College so Expensive? Part 3

Difference Between College Sticker Price and Net Price.

As discussed earlier in the article in relation to public versus private college and universities, there can be a sizable difference between a college’s sticker price (the advertised cost of tuition and fees) and the net price (what you actually pay). Because of this phenomenon, a student’s perception about the cost of college is often skewed towards the overwhelming and negative.

Before you press the panic button, let’s get the facts about financial aid

For the school year 2011-2012, college students received an average of $14,745 of financial aid per full time equivalent student.9 Also, during this time period, students received 56% more in grant aid10 (money you don’t have to pay back) than students did a decade earlier. This is good news. On the other hand, college students during the 2011-2012 school year, on average, took out $6,558 in federal student loans (money you do have to pay back). This number also doesn’t include the amount of money students have taken out in private loans (money you have to pay back at generally far higher rates and shorter terms than federal student loans). 

Even though what you ultimately end up paying for college may be less than the published rate, that’s not to imply college isn’t expensive, it just emphasizes the fact that your college of choice may not necessarily be as expensive as you think it might be. What you end up paying for college is linked to many factors including your background, your unique set of skills, your economic situation, as well as how many existing college credits you are able to transfer into your college of choice. 

The National Center for Education Statistics provide a College Navigator (http://nces.ed.gov/collegenavigator/) which allows you to research the schools you are interested in using a number of school-specific financial and student success rate parameters, including: estimated tuition and expenses for full-time undergraduate students, the number and percent of students receiving financial aid at that institution (as well as a breakdown of grants/scholarships versus loans), net price, programs & majors available, admissions, retention and graduation rates, as well as cohort default rates (the percentage of students by academic start year who are in default on loans). 

You can also check StraighterLine College Savings Calculator, a resource that can assist you in determining what your true cost of college will be. 

What Can You Do to Accommodate the Rising Cost of College?

Two of the most important things you can do to accommodate the rising cost of college right now are: 

  • Have a clear degree-to-career path so you know precisely what college courses you will need to take and which colleges offer the most flexible degree pathway. A flexible degree pathway, by its very nature, should include a college’s ability and willingness to accept a significant number of transfer credits. 
  • Take as many low cost online credit-bearing college courses as you can and then transfer those college courses to the school where you plan on ultimately earning your degree. This will save you thousands of dollars towards your total cost of college. The less time you’re paying tuition, the lower your college debt will be and the less interest you’ll pay.

Taking advantage of low cost college courses is not a new thing. Students are smart and adaptable – and they learn quickly. It may come as no surprise to you if you are currently enrolled in school, but the most likely group to take advantage of earning college credit through distance learning options (such as online college course providers) are students who are already enrolled full-time at a different institution’s college program.11  


9College Board, Trends in Higher Education: Average per FTE Student over Time, p.1 http://trends.collegeboard.org/node/246

10IBID

11A National Dialogue: The Secretary of Education’s Commission on the Future of Higher Education, Frequently Asked Questions About College Costs, p.8
http://www2.ed.gov/about/bdscomm/list/hiedfuture/reports/dickeson2.pdf