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!

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.

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.

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.  

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.

Why is the denominant factor school funding or tuition subsidization the combined income of our parents? What if parents earn more than what qualifies a student for scholarships, but is barely adequate enough to pay minimums for outstanding loans? What if if parents are paying off funding for another child who recently finished schooling? What if parents have been paying for the costs of having and supplying the necessities for children before funding their own retirement? Does scholarship consideration take into account the parents’ current debt liabilities? What’s a sufficient amount of disposable income to be the proper determinant? How much longer does Middle Class America have to bend over? Something needs to change.

Like many of us, college life has to eventually come to an end. We get to finish classes, say goodbye to friends near and dear, enter the real world with arms swinging. The end in terms of financing college, however, is a whole other story. For those who are fortunate enough to not need financial aid, this may not be important to you. But for the other 50% of us, we now prepare to repay the amounts borrowed over four years. For most students, the option to pay interest while in school was not a clear option (which may not be so coincidental). Unsubsidized Stafford loans over four years, have accumulated interest and already begun compounding. For many four year colleges, the interest has already accounted for another couple thousand dollars. Yippee! Not only was school too expensive to self-finance, but now we are forced to devote the next ten years of ours lives to paying down the loans. When the end of that ten years comes, many of us will have children of our own. Which leads us down the same path of paying for an expensive eduation, that quarantees no better life-just helps open doors…It’s up to us as individuals to close them.

NBC Nightly News ran a piece on Friday March 7, 2008 in regards to rising college tuition costs as a part of an immigrant family. The story told of how college tuition is on the rise nationwide, but it is actually the Ivy League schools that are taking action. Schools like Harvard and Brown have recently taken  endowment money-nearly $65 Billion-and made it available to help middle income families who have children accepted to the schools but are forced to turn away because of costs. Maybe other schools will follow in the footsteps of Harvard and Brown and make some sort of effort to minimize costs to the student while maximizing opportunity for all. Article

Students in Harrisburg, PA are no longer able to borrow money from the state for college. Private lending instations after March 7 will be the new source of funding for Pennsylvania students. The bond market hit hard from the national sub-prime mortgage lending has led to the state no longer being able to lend funds. The state lending program currently provides funds for more than 500,000 students statewide. This is yet another example of how college tuition continues to be effected by poor leadership and decision making. Now those needing funding for school (nearly half a miliion) will be forced to go to private lenders and pay slightly more. Article

As we approach the appointment of a front runner for each party, I thought it would be beneficial to see what the front-running candidates’ stances are on college tuition. John McCain still has no formal stance on tuition, but is reported to be in favor of some sort tax write off for the parents. Clinton wants to provide $500 million to community colleges and $250 million to four year universities. She also wants to replace the FFELP with 100% direct lending. And finally, she wants there to be a box to check for families on their income tax return rather than FAFSA. Obama also wants to replace FFELP with 100% direct lending. He also wants to eliminate FAFSA and provide a box for families to check for income tax return. One issue the candidates both have in common is that they want to either increase the Pell Grant with inflation or have it cap off at $10,000. The Pell Grant provides need-based funding for low income undergraduates. FinAid Article