Published: Sunday, February 05, 2012
Sheryl Harris, The Plain Dealer
CLEVELAND Ohio -- Parents planning to send a child off to college may experience a bit of sticker shock.
Students at four-year colleges nationwide paid an average $21,600 for the 2010-2011 academic year – roughly 2½ times more than their parents might have spent when they were in school.
Federal and state governments and universities continue to grapple with soaring tuition, but in the meantime, families can find practical tools – some new – for understanding and corralling college costs.
One of those is the net price calculator
, which the U.S. Department of Education ordered colleges to post on their websites last October. The calculators give students a ballpark estimate of what they'll spend to attend a particular school.
"Tuition and fees understate the whole cost of attendance," said Lauren Asher of The Institute for College Access and Success
. "The full cost of attendance is tuition and fees, housing and food, books and supplies, transportation, and miscellaneous."
Net price is the cost of attending a school (tuition, board, the works) minus aid that similar students received in the previous year. Similarities are based on things like test scores and family income.
The calculators have quirks, but as Asher puts it, they can give students a better and earlier estimate of what they'll need to save, borrow or earn to attend a particular school.
"It might show you your dream school is more affordable than you thought, or less," Asher said. "Or that the school you assumed was cheaper because of the sticker price actually isn't."
Another useful tool is the Financial Aid Shopping Sheet
that the Department of Education and Consumer Financial Protection Bureau are collaborating on. Their goal is to make financial aid letters – the offers schools send after a student is accepted – easier to read. Right now schools use different terms to describe the same things, which makes it tough for families to compare offers. And some schools don't clearly distinguish between gift aid and loans.
"Schools lump them together," said Asher. "You think you have this great big aid package and zero cost at the end, and in fact, what you're really looking at is $20-30,000 in loans, plus some work-study assumptions."
Although the shopping sheet is still in the draft stage, families can use it as a roadmap to make sure they ask schools the right questions about financial aid offers.
On the state level, students looking to save money may consider starting at less expensive community colleges to earn credits they can later transfer to one of the state's public four-year colleges.
"It counts toward your degree, so you don't lose time, you don't lose money," said Kim Norris, spokeswoman for the Ohio Board of Regents. Students planning to switch should check with both schools to make sure credits will transfer. (Or, try the Regents' clunky credit transfer site.
Also in the category of saving money by saving time, by year's end, the state's public universities will begin rolling out three-year bachelor's degrees as an option in certain programs.
And although it's too late for 2012 seniors, Norris notes that high school students can slice college costs significantly by taking advanced placement or community college classes in high school to earn college credit – at no cost to students.
Experts shared these tips, tools and strategies for prospective freshmen:
Fill out the FAFSA
Completing the Free Application for Federal Student Aid is a tedious chore. The form is long. It's nosy. But, financial aid experts say, it is vital.
Students can qualify for low-cost federal student loans regardless of their income -- but only if they first fill this form. Plus, many schools use the FAFSA as a jumping-off point for awarding school-based aid.
Use net price calculators
These online calculators can give students a good estimate of how much it will cost them to attend a particular school before they spend money to apply.
Students won't know the exact price until they're accepted and get a financial aid letter from the school, but the calculators provide an early reality check. Calculators are still being tweaked, and some schools hide them.
- See TICAS' tips for finding and using net price calculators
Understand financial aid letters
Students won't know exactly how much it will cost them to attend a school until they're accepted and get a financial aid letter from a college.
Use the draft Financial Aid Shopping Sheet as a guide for breaking down the information and comparing aid offers.
- Find Finaid.org's helpful guide to decoding financial aid letters
Target your borrowing
Students should always exhaust their federal student loan options before taking out private student loans, which are more expensive and less flexible for borrowers who run into trouble.
Currently, undergraduate students can borrow between $5,000 and $12,500 a year in federal student loans, depending on various factors. Interest rates are reset every July.
Asher encourages parents to consider federal fixed-rate PLUS loans before a student takes on a private loan.
On any loan, borrowers should understand the interest rate, whether it's fixed or variable, whether interest accrues while the borrower is in school, what the balance and loan payment will be when the student graduates, when payments start and under what circumstances the payment could increase.
Students loans usually don't have to be repaid until graduation, but if interest accrues while the student is in school, borrowers can hold down the balance by making even a few payments before graduation.
Co-signers should understand they can be held liable for repaying the loan if the borrower fails to make payments.
- Find important information on federal student loans (including eligibility limits and parent loans) and how they differ from private loans from the U.S. Department of Education.
- Get advice for borrowers from TICAS' Project on Student Debt.
- Find a student loan repayment calculator.
Hunt down scholarships
National scholarship competitions can be fairly competitive, but you can search scholarships for free at finaid.org. Steer clear of scholarships that require money to apply – they're likely scams. And never give away private information, like your Social Security or bank account number.
Students may have a better shot at winning local scholarships, because there's less competition.
- In Cuyahoga County, get help finding local scholarships and free one-on-one financial aid counseling at the nonprofit College Now Greater Cleveland. The walk-in resource center helps Cuyahoga County students of any age. The walk-in resource center is at 200 Public Square is open 10 a.m. to 5 p.m. weekdays and open on Saturdays by appointment. Call 216-241-5587, Ext. 140.
- Find similar organizations across Ohio at www.ohiocan.org/ProgramMap.aspx or contact the Ohio Board of Regents (1-800-233-6734).
Other helpful resources:
- Studentaid.ed.gov -- Information from the U.S. Department of Education about paying for college including links to the FAFSA form and information about eligibility. Or call 1-800-433-3243.
- CollegeNavigator.gov -- The National Center for Education Statistics site has a database of colleges searchable by price, type, location and area of study.
- NAFSAA's tips on cutting college costs, being a smart consumer and to loan repayment tips.
- ohiohighered.org or 1-800-233-6734 – The Ohio Board of Regents' clearinghouse for prospective students with questions about attending or paying for college http://blog.cleveland.com/consumeraffairs/print.html?entry=/2012/02/tools_to_help_understand_reduc.html