President Obama’s speech on college affordability at the University of Michigan last week is certainly timely given the upcoming priority filing deadlines for the FAFSA. The gist of Obama’s ambitious tuition reform plan seems simple enough: provide more assistance to schools that keep costs down and slash aid to those that do not.
Or is it that simple?
In theory, colleges and universities would be clamoring to heed Obama’s call for action. But in practice, maybe not so much. State-supported universities that rely heavily on state funding will find this a tough row to hoe. Because state funding has been cut (and cut again), most state universities have been left no other choice than to increase tuition and fees in order to offset what the state can no longer provide. Just last month, the University of Illinois announced a tuition increase which can be largely attributed to our state’s budget crisis.
Whether Obama’s plan will work remains to be seen, but undoubtedly this is not the last we have heard of this hot-button issue. And now that 125 colleges have crossed the $50,000 a year mark for tuition, room and board, and additional fees, it seems the term “college affordability” could be the next popularized oxymoron.
There is no doubt that the cost of higher education has spiked at an alarming rate. Many families perceive college, and especially private ones, as unattainable. And although the majority of the schools on the $50,000 list are private institutions, the reality is that many students are not paying the full price for tuition. Money generated from endowments, private gifts, and investment returns help offset the “sticker price”, which sometimes make private institutions as affordable (or even more so) than state institutions.
So what can be done now to deal with financing college options?
If you are a current high school senior (or the parent of one), make sure you file the FAFSA asap, and definitely by Feb. 15. This will give you the best chance to receive funds should you qualify for them. If the colleges you are applying to require the CSS Profile, make sure you fill this out in addition to the FAFSA.
For underclassmen, pay attention to the financial information of the colleges and universities you are interested in. The more you understand about the process, the better. As of last October, all colleges and universities are required to have a net price calculator application on their website which can be used as a tool to begin to understand what will be the “net cost” of attendance (sticker price minus any award money). Due to the early stage of its use, the net price calculator is not 100% reliable, but it’s a good place to start the conversation on college affordability at a particular school.
For a crash course on the financial aid process, click here to read the first of a six-part interview with Mark Kantrowitz, a financial aid expert and founder of the web sites finaid.org and fastweb.com.
Obama has drawn much needed attention to this topic. Let’s keep the conversation going.