Video created on the costs of college

I created a video that summarizes everything my blog is about. It starts off dealing with what determines your acceptance and facts on how much financial aid was awarded last year. The video then goes through the American dreams of being accepted to college and showing some potential colleges (Ivy leagues and in-state schools like UW and WSU) and what they have done to make college more affordable. Then it goes into further detail about financing college…what it takes to finish school, how much interest has accumulated, how long you have to pay it off. It also talks about why college is so expensive and some of the things that contribute to the cost. The video also talks about who gets left out (inequalities) because of higher education costs and how college is becoming a commodity rather than a resource as college and how they relate to the new global economy. The video then takes viewers through tuition hikes over the past 30 years and how these increased rates are affecting our parents and even entire nation. And finally, the video takes viewers through some things that people can do to combat the high costs. enjoy!

Things that can help

You can always save for your children’s education before they are born, via the 529 Education Plan or the Guaranteed Edutaction Tuition program as mentioned one post ago. There are many millions of dollars of scholarships available for those in need of aid, or worthy of achievement. Every high school offers scholarship lists provided from local sponsors, every college offers scholarship once in the program. While in school, it is always best to pay the interest on your loans as you go (saving you a few thousand come graduation). Many schools also offer work study programs where you get a job within the school to help pay for room and board / rent expenses. Once done with school, the sooner you start paying down your laons, the better…with preenstly high interest rates, it’s never a bad idea to sretch and pay $100 when you were going to pay $75. When interest rates do come down on loans, refinance! Refinancing in better financial times could also help save you coin.

What can we do?

While we have very little control over how college administration boards determine what we will be forced to pay every year, we can start planning for the future and build into our plan to inflating costs. A 529 Education Plan allows for investors to save strictly for college in a tax-free shelter. Whatever the account grows to, can be taken out tax-free to pay for higher education. The sooner investors start saving, the better-due to compound interest. Another option is GET Washington. The state of Washington has developed a program which allows its residents to buy college tuition for kids or grandkids now, to lock in the tuition rate, rather than wait nearly twenty years or more to pay. As some one of my graphs depicts, public four year universities will cost almost $130,000 in just ten more years! By buying today’s tuition rate, you avoid the costs of compounding interest working against you.

Who gets left out?

Far too many! Those who are ill-informed or fall victim to relying on word of mouth for financing education. The government is there for support for the under-priveleged or anyone else who can help “diversify” public institutions. Many middle class american familes get the shaft as well. Moderate to sufficient parental income often disqualifies people from receiving scholarships…no matter how well the essay was written, or qualifying the markings were. Also, people who didn’t get the best grades, aren’t good test takers, who have languauge barriers-are often too easily swept under the rug to be forgotten about. More often, it takes public relations to bring issues like tuition, scholarships, and aid to the surface for people to start an interest in the topic-unless they are already directly involved.  

Option

If a university is an institution, and an institution has an endowment, why can’t increasing costs be funded by capital gains? If a university is only allowed to spend five percent of the money earned on its endowment funds before being penalized, why can’t the government change that to say 5 1/2 percent? That extra 1/2 percent of all money invested gaining monetary value could immediately help subsidize the cost for schooling for many. Most institutional investors create much more than five percent wealth on any given year anyways, so there isn’t a need to worry about possibly liquidating the principal and quickly deteriorating the funds all together.