Guidance Office
Q. and A.: Paying for College
Laura Perna, a professor at the University of Pennsylvania and a researcher in college finance and affordability, is answering select reader questions about paying for college.
The Choice has invited Laura Perna, an author, professor at the University of Pennsylvania and researcher in college finance and affordability, to answer your questions about paying for college in the blog?s Guidance Office, a forum for college applicants and their families seeking expert advice.
The moderated Q. and A. session, which began on Monday, will continue throughout the week.
In this third installment of answers, Ms. Perna responds to questions about appealing a financial aid award, starting at a community college to save money, the actual average of student debt, and whether college is really worth its cost.
Some questions, and answers, below have been edited, including for length and style. ? Tanya Abrams
Appealing a Financial Aid Award
Q.
My daughter will be attending college next year. Her older brother has left school due to poor grades. We took out a parent loan for him so we cannot afford to do anything for our daughter. We never could save much for either child?s college fund as we have always just scraped by. Can we call the financial aid office at the school she would like to attend and request that they review her aid request in light of this? There is nowhere on the form to include information like this.
? Mary
A.
You should certainly contact the financial aid office if your ability to pay college costs changes because of your personal or financial circumstances. Some colleges provide information on appealing a financial aid award on the financial aid office?s Web site. You should also contact the financial aid office if you are having difficulty paying college costs even with your financial aid award.
After leaving college, you should contact the loan servicer if you encounter challenges repaying a student loan. For federal student loans, students may be eligible to receive a deferment or forbearance, provisions that delay or temporarily reduce monthly repayments.
Beginning at a Community College
Q.
My son is a junior and is interested in majoring in gaming and programming. He is looking at the Rochester Institute of Technology in New York and Becker College, in Worcester, Mass. We live in New York. Our annual income is $44,000. The annual tuition, room and board at each of these schools is more than our income and I can?t afford parent loans. He can attend a community college to get his liberal arts classes out of the way but can he get enough financial aid to be able to attend one of these colleges? What are our options?
? Joyce
A.
The published price of attendance (tuition, fees, room and board) does not necessarily reflect your out-of-pocket cost. Financial aid can reduce the price that you will actually pay at a four-year or two-year college. You can estimate the actual net price that reflects your particular financial circumstances using each college?s net price calculator and determine your actual net price by completing the Fafsa.
Beginning at a community college is another approach to reducing your need to rely on savings, loans, and other sources to pay for college. Tuition and fees are typically substantially lower at community colleges. According to the College Board?s 2011 Trends in College Pricing, the average published price (enrollment-weighted) for tuition and fees for in-state students was $3,131 at community colleges and $8,655 at public four-year colleges; it was $29,056 at private nonprofit four-year colleges in 2012-13.
Living at home to attend a community college may eliminate room and board costs, but may create some commuting costs. If your son begins at a community college with the goal of transferring to a four-year college to complete a bachelor?s degree, be sure to learn more about the courses for which the receiving four-year college will grant credit. Transfer policies vary across states, and across colleges within the same state. Connect with the transfer office at the community college and four-year college that you are interested in attending in order to learn their specific policies.
Student Debt Burden May Be Higher Than It Appears
Q.
I have been looking at published stats purporting to show average student debt after four years of college. The number seems to be the maximum amount that can be borrowed through Stafford and Perkins loans over four years, something in the mid- to high-$20,000s.
This is of course all poppycock. Parents are borrowing through the PLUS Loan program and children recognize that this loan is theirs to pay as well, with the parents on the hook if the child defaults.
It is apparent to me that the stats are being manipulated, or at the very least, a see-no-evil, speak-no-evil attitude has been adopted by researchers by looking strictly at who signed the note. The day the reported numbers get real is the day that the real issue of cost is addressed. Until then, is this not all window dressing with an it?s-really-not-that-bad look to it all?
? Tom Schreppler
A.
As in other cases, the available data raise as many questions as they seem to answer. Information about the use of federal student loans is readily available, given the government?s interest in collecting these data. But these data do not describe how the burden of paying college costs is distributed between students and their parents.
Students are responsible for repaying their parents? PLUS loan in some families, but not in others. Students and their families are also relying on other forms of borrowing to pay college costs, including private loans and credit cards. Moreover, because federal and other loans all must be repaid, counting them as ?financial aid? is misleading.
A better indicator of the financial burden on students and their families is the cost of attending college less the amount of money received in the form of grants (money that does not need to be repaid). Any amount that is not covered by grants must be paid by the student and family from savings, loans or additional employment.
Students and their families should carefully consider not only the total amount that they are borrowing from all sources but also the number of hours that the student is working while also enrolled in classes. Too much borrowing and too much employment can both be problematic.
Is College Worth the Cost?
Q.
For those of us who are full pay, is there really any college out there that is worth $60,000 dollars a year? If we?re talking about 30 weeks of actual teaching ? at most ? it works out to $2,000 dollars a week! For that price, we could send our child on a cruise every single week for four years!
I can?t help but think that if I actually paid that for three children ? working out to more than $750,000 ? I could probably afford to build my own university for that. When will these ridiculously overinflated prices come down?
? Felicia
Q.
Yes!!! Felicia, we feel the same way. How can they really say they are worth those prices?? That goes for Penn, too. We have enough for 2 1/2 years at a $60,000 school. This is extraordinarily painful. You want the best for a kid that has worked hard, but does any of this make any rational sense? How can you tell your child that it?s not worth the pain associated with debt?
? Robin
A.
When considering which college is best to attend, each student and family must make their own cost-benefit calculation. Many dimensions ? financial, academic, social and other characteristics ? are all part of what makes one college a better fit than another.
Costs (including the need to use savings, the need to borrow, and the need to work more hours), as well as a student and family?s valuing of these different costs are certainly an important part of the equation. Be sure that you have accurate and complete information about what these costs really are.
It is important to recognize the wide variation in the cost of available college options. According to the College Board?s 2011 Trends in College Pricing report, about half of all full-time undergraduates attending four-year colleges are enrolled at institutions with published tuition and fees (the sticker price) below $10,282. The sticker price is considerably higher at private nonprofit colleges ($29,060 in 2012-13) than public four-year colleges ($8,660).
Moreover, these sticker prices do not take into account the financial aid that many students at these institutions receive. For full-time undergraduates in 2012-13, net tuition and fees were $2,910 at public four-year colleges and $13,380 at private, nonprofit four-year colleges.
The costs should also be weighed against the many economic and noneconomic benefits of college. Students who attend and graduate from college realize many benefits, including higher earnings, lower likelihood of unemployment, and better working conditions, and these benefits have increased over time.
Even in the Great Recession, college-educated workers fared better (on average) than those without a college education. Society also benefits by having a better-educated society, as higher levels of education are associated with a more productive work force, less reliance on social welfare programs, lower crime, and more.
To pose a question to Ms. Perna, please use the original post soliciting questions or the comments box below. We will accept questions through March 20.
Source: http://thechoice.blogs.nytimes.com/2013/03/20/guidance-office-paying-for-college-3/
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