February 21, 2018
College is expensive; no one will deny that. According to CollegeBoard, in the past decade alone (2007-2017), tuition rates rose 26% at private nonprofit colleges and 37% at public four-year colleges. Those rates jump to 129% and 213% respectively when comparing current tuition with that of just 30 years ago, accounting for inflation. With no end in sight to the continual increase in the cost of an education, low and middle income students are facing more difficult choices than ever.
The rising cost of academia is forcing us to place a cost value on college education — an invaluable commodity. Is an education worth $45,000 in student loan debt? Is it worth going to your last-choice school because it's the cheapest? Is it worth working two jobs and falling asleep in class to make tuition payments? These are just a few of the questions students must grapple with before setting foot on-campus or enrolling online. And for many, these questions are daunting enough to make them believe that college is not a serious option for them, no matter its value.
Students are experiencing sticker shock. What used to be the affordable options of two- and four-year public colleges are no longer easily paid for by part-time and summer jobs, and the threat of student loan debt looms ever present. For those who don't have significant family financial contributions, college can suddenly seem very out of reach, which is why we wanted to use this edition of our Barriers in Education series to explore one of the largest deterrents to higher education: cost.
Our panel, comprised of college planning and financial aid experts from universities, nonprofits, and financial institutions, spoke with us about how we can help students plan for college and take advantage of all the resources available to them. Emphasizing above all that students should wait to see what all their financial offers are before ruling out any schools — sometimes the school you least expect can offer you the most money. We cannot let rising costs become a discouraging barrier for students wishing to gain an education. Read on to learn about resources and support that can help student see the true value of a college education.
People really need to think outside the box when it comes to scholarships. They also need to look in their own backyard first. Local scholarships may be smaller, but they add up, and competition is less fierce. I tell all my students to get on Google and search their hobbies, accomplishments, and interests that are unrelated to school along with the word 'scholarship'.
By Abril Hunt
Manager of Outreach and Financial Literacy for ECMC
CAN YOU TELL US A BIT ABOUT YOUR HISTORY AND PERSONAL EXPERIENCE WORKING WITH ECMC HELPING STUDENTS PLAN THEIR FINANCIAL PATH TOWARDS COLLEGE?
I have been counseling students with challenges related to paying for and staying in college for two decades. I have worked at 2-year, 4-year, and graduate schools, as well as a career college. When working with students and their parents on issues related to paying for school I regularly draw from the challenges I had as a first-generation student.
WHY DOES THE COST OF ATTENDING COLLEGE FUNCTION AS SUCH A DETERRENT FOR STUDENTS?
It's a lot of money! Traditional students have a hard time getting past the sticker shock of a four-year degree. You can explain the cost vs. benefits, but many don't have enough life experience to relate. I also think there is a fear of the unknown and all the "what ifs" – What if I run out of money? What if I flunk out? What if I can't find a job after graduation? What if I lose my job and can't afford to repay my loans?
WHAT ARE SOME OF THE COMMON MISCONCEPTIONS ABOUT PAYING FOR COLLEGE?
Many people think there is only one path to college graduation. However, not all students attend full time for four years, especially non-traditional and commuter students who have to balance work, family, and school. Students may also choose to study half time or three-quarters time, and take a semester or two off to work and save money. Many schools offer a tuition discount for students taking between 12-18 credits. That could be two extra classes per term, which accelerates your pace towards a degree.
Another misconception students have is that they won't qualify for financial aid. This is probably the most pervasive myth out there. While it's correct that there is an income threshold for need-based aid, all FAFSA filers, regardless of their parents' income, qualify for unsubsidized Direct Loans and PLUS loans. It's so important to fill out the FAFSA every year regardless of your current income. You never know what the future holds. It also is helpful to work with a financial aid counselor, who can help you complete the form.
Students also think they have to be a straight-A student to qualify for scholarships. It's true that colleges and universities offer academic-based scholarships, but those aren't the only scholarships out there. You can still win scholarships even if your grades aren't stellar. In fact, very few private scholarships are based on academic performance. Scholarship sponsors look for students who best match their unique criteria. They might be looking for artistic ability, athletic talent, overcoming obstacles, or even something a bit unusual. People really need to think outside the box when it comes to scholarships. They also need to look in their own backyard first. Local scholarships may be smaller, but they add up, and competition is less fierce. I tell all my students to get on Google and search their hobbies, accomplishments, and interests that are unrelated to school along with the word 'scholarship'. One of the coolest scholarships I have seen a student earn was for her essay on knitting a sweater. When I was in school, I had a scholarship from the American Quarter Horse Association and I didn't even own a horse!
A final common misconception is the belief that colleges will reduce a student's financial aid package when they receive a private scholarship. That's not exactly true. Federal regulations prohibit schools from awarding aid in excess of the student's total cost of attendance. If a student has a financial aid package that meets 100% of their cost of attendance and a private scholarship comes in, it creates an over-award. In that situation, the private scholarship funds will be used to reduce loans or work study. It is possible for a student to bring in so many private scholarships that the school might reduce its own grant funds. However, that is not a hard and fast rule. The bottom line is that replacing loans with scholarships reduces the student's cost of attendance because loans have to be repaid while scholarships do not.
WHAT CHOICES ARE YOU SEEING STUDENTS AND FAMILIES HAVE TO MAKE BASED ON THE COSTS OF HIGHER EDUCATION? HOW DOES THIS AFFECT LOW-INCOME FAMILIES? MIDDLE-CLASS FAMILIES?
For middle-income families, I am seeing a lot more who are choosing local colleges, so that their students can live at home and commute to save money. Some families are choosing to send their student to community college for two years, rather than directly to a four-year institution. I am also seeing fewer families who have the capacity (or desire) to borrow PLUS loans for undergraduate students to attend private, independent colleges. For most truly low-income families, the PLUS Loan is just not an option, so any financial aid gaps really limit their choices. This is why low-income families in Rhode Island, Tennessee, and my home state of Oregon, are loving the tuition-free community college options. San Francisco and New York offer similar programs. Louisiana, Arkansas, Minnesota, and South Dakota have varying tuition-free options for students studying high-demand fields.
WHAT IS ONE THING YOU WISH ALL STUDENTS AND PARENTS/ GUARDIANS KNEW ABOUT FINANCING AN EDUCATION?
For parents especially, the first thing I make sure they understand is that a LOT has changed since they were in school. The days of being able to work a summer job to save money for the next year's tuition are long gone. In addition, the cost of college has increased more than 150% in the last 20 years. Unfortunately, increases to financial aid and personal income have not kept pace with rising tuition costs. That leaves a gap for most families that is difficult to address if they wait until their senior year of high school to prepare.
Early awareness and financial literacy play a vital role in academic and financial preparedness for college. I encourage high school students to start looking for scholarships their junior year. They can't apply at that point, but they can get all of their documents ready. Many students come to school expecting to continue living their parents' lifestyle and the adjustment to living frugally is a foreign and unpleasant concept. However, it's vital to their quality of life after graduation. The adage "live like a student when you're a student or you'll live like a student once you've graduated" has stuck around for so long because it's true. Manicures and sushi nights are absolute budget busters for college students.
WHAT ADVICE WOULD YOU GIVE TO STUDENTS THINKING ABOUT APPLYING TO COLLEGE, BUT AREN'T SURE THEY CAN AFFORD TO ATTEND?
Know your bottom line. College is the second largest financial investment you'll make in your lifetime, and yet the total costs aren't always clear from the outset. When it comes to financial aid award letters, not all colleges include both direct and indirect expenses in the total "Cost of Attendance" (COA). While most schools outline baseline tuition and fees, some omit certain "indirect expenses" like room and board, textbooks, meals, and transportation. In addition, not knowing how much a full year of college will cost makes it difficult to put an aid letter in context. If the aid letter you receive doesn't include an itemized expense breakdown or excludes the COA altogether, don't hesitate to call the school's financial aid office to get more information. Also, complete the FAFSA 4CASTER online at www.fafsa.gov. It will give you an early estimate of your eligibility for aid. Then, meet with the college or career counselor at your high school—they can refer you to a college access expert or center in your area that offers free college planning assistance.
Consider Wants vs. Needs. I talk to students about how we always seem to find ways to buy the things we really want, such as smartphones, Apple watches, designer bags, or other expensive items. How did we find the money to buy it? We sacrificed smaller things for the bigger desire. Affording college is the same. If something is important to you, you will find a way to make it happen. Many students start out on the four year plan, which stretches out to the five, six or even seven years of balancing life, work, and school. If you need help along the way, ask for it.
Scholarships! They are out there. But you really need to work at finding them. It's easy to do a cursory search on the web and believe you can't find anything, or if you do find something, only applying for one or two is a huge mistake. The more you apply for, the better your chances are at receiving one, and the more time you spend applying, the better your responses become. I tell students to keep a running document with all of their scholarship application responses. As they apply for more scholarships they will begin to see a common theme in the questions. Then, it's just a matter of personalizing the responses.
WHY IS IT IMPORTANT FOR ORGANIZATIONS LIKE ECMC TO PROVIDE RESOURCES FOR STUDENTS TO HELP THEM NAVIGATE THE COST OF COLLEGE?
There are many things to consider during the college planning process – from the financial commitment, to the academic offerings, to whether a particular school's environment and location is a good fit. I can't speak for other organizations, but at ECMC, we focus on student success in higher education and provide financial literacy training, support, and outreach to help students plan and pay for college, as well as manage debt. Our mission is to help students succeed.
WHAT ARE SOME OF THE WAYS YOU SEE THE HIGH SCHOOLS AND SCHOOL DISTRICT'S YOU WORK WITH ARE SUPPORTING STUDENTS APPLYING TO COLLEGE, SPECIFICALLY FINANCIAL AID?
I see them reaching out more and more to college access and student success partners like ECMC. High school counselors are pretty resourceful and very dedicated to their students. They contact us at ECMC for support when they need it. We partner with local community colleges to offer free college access centers (The College Place) in several states. Our ECMC Scholars Program pairs students with mentors beginning in their junior year in high school and continuing through college, providing scholarships to those participants as well. In the Fall, schools often ask us to assist at FAFSA filing events.
WHAT IS ONE THING YOU WOULD LIKE TO SEE THEM ADOPT?
I would love to see financial literacy incorporated into K-12 curriculum. At the very least, it should be a mandatory course to graduate from high school in every state, which it currently is not.
WHAT DO YOU THINK THE ROLE OF A UNIVERSITY IS IN SUPPORTING STUDENTS STRUGGLING TO PAY FOR COLLEGE?
Schools are responsible for their cohort default rate, which is the percentage of a school's borrowers who default on their student loans within a specific timeframe. Students may understand that student loans represent a lot of money, but many still don't quite grasp the impact that this debt will have on life after college.
Financial challenges and needing to work are two of the main reasons students dropout of school. Failing to graduate leaves the student with debt but no skill set to pay it off. Financial literacy programs easily align with the public service mission of state colleges and universities. Schools can mitigate the percentage of defaulting students by promoting financial literacy as a value-add and weave programs into the campus culture. This in turn helps transition the next generation of taxpayers into the American economy. Unfortunately, there is no "one-size-fits-all" solution for a successful financial literacy program. What is successful for one school may not work as well for another. The success of financial literacy programs is usually driven by the availability of funding, time, space, and staffing.
WHERE DO YOU RECOMMEND STUDENTS, AND THEIR SUPPORT SYSTEMS, TURN FOR RESOURCES AND GUIDANCE AS THEY BEGIN TO PLAN HOW TO FUND THEIR EDUCATION?
There are many things to consider during the college planning process – from the financial commitment, to the academic offerings, to whether a particular school's environment and location is a good fit for the student. At a time when Americans collectively owe more than $1.3 trillion dollars in outstanding student loan debt—and with tuition rates vastly outpacing inflation—families shouldn't be left in the dark about what they'll be expected to pay for college. This is even more true for individuals who are the first in their family to attend college, which we focus on a great deal at ECMC. By bringing much-needed transparency to the college tuition market, we're empowering families with the tools and information they need to make fully-informed decisions about where to attend college before they've settled on a list of schools.
ANY FINAL THOUGHTS FOR US?
Our website, www.ECMC.org, is a great resource, and not just for high school students. ECMC also provides several resources that guide families through the process to ensure they make the best choice. Here is a sampling of our free tools and resources:
Opportunities Book is a step-by-step workbook that provides the tools families need to make smart decisions about one of the biggest decisions in their lives. The book features a variety of worksheets covering a myriad of topics including the application process, choosing the right school, and navigating the financial aid process. Also included are "to-do" checklists for high school juniors and seniors. We provide more than 350,000 copies annually to students across the country, free of charge, in English and Spanish. The books also are available for free download on ECMC's website.
ECMC Scholars program is a rigorous two-year mentoring program that allows select students to access up to $4,000 in scholarships their first year of college. Pending completion of all requirements, students qualify for an additional $2,000 for their second year. Unlike a traditional academic scholarship, these students aren't selected solely for their academic merit or test scores—instead, they are chosen for their potential. Over the past 13 years, ECMC has provided more than $15 million in financial aid to 5,080 students in Virginia, Oregon, and Connecticut. ECMC committed to supporting an additional 470 students with nearly $3 million in scholarships through 2019.
The College Place (TCP) is a network of ECMC-supported college access centers operating across Minnesota, Virginia, Oregon, California, and Connecticut to provide free college preparation and financial counseling services to high school students. TCP Directors work with hundreds of students and their families to help them navigate the complex college admissions and financial aid processes. The centers provide free information and assistance through in-person, telephone, and online support. They also offer presentations, workshops, and individual assistance with college admissions, financial aid, and scholarship applications.
ABOUT ABRIL HUNT
Manager of Outreach and Financial Literacy for ECMC
Abril Hunt is manager of Outreach and Financial Literacy for ECMC, a nonprofit that focuses on student success in higher education and provides financial literacy training, support and outreach to better educate students on paying for college and managing their debt. In her position, Abril facilitates and manages ECMC's award-winning national educator trainings, which provide valuable, free-of- charge lessons in financial literacy and higher education planning to students in middle school, high school and college.
Abril also manages College Abacus, a free online tool that allows families to calculate and compare personalized financial aid estimates across thousands of U.S. colleges, and also serves as the writer and co-host of ECMC's weekly national webinar, Financial Awareness Basics.