Answered: The Top Five Questions About College Costs

Figuring out how to pay for college is no easy task. The costs of college and the various forms of financial aid vary dramatically. All of this makes it easy to become confused when trying to decide on which type of college to apply to.

There are community colleges, state colleges, private or out of state universities, which was is right? More importantly what is the options for paying for the various college options.

If you find yourself confused by all of this, rest assured you are not alone. But paying for college does not have to be confusing, I have put together a list of the most commonly asked questions on the costs of college. This list will help you determine which college option may be best for you.

1. State School Costs vs Private Schools?

The cost of college varies dramatically depending on the school you are looking at. There are many variables, including location and ranking.

Generally, the higher the school’s ranking the more expensive the school will be. As a general rule, attending a private university and paying completely out of pocket is going to be much more expensive than going to your local state university.

However, private schools often have far greater resources and endowments than state universities. These resources allow private universities to provide greater financial aid awards, leveling the cost.

When you take financial aid into account, the difference in price between a state college and a private university may not be significant.

You should not let the initial price be a factor in whether you choose to apply to a private or an in-state university. If you have been accepted into a private university that has a higher cost, look into their financial aid packages.

You can negotiate financial aid. Make sure to read this post on six ways to increase your financial aid award.

2. Does it Cost More to Attend An Out of State School?

The price of tuition is one of the greatest concern for many students looking at out of state universities. Generally, most private schools have a standard tuition in which all students pay the same amount.

However, at public, state-funded schools, tuition for non-resident out of state students, is almost double that of the cost of tuition for students that reside within the state.

Because of this, out of state public universities are generally not a financially wise choice. The exception to this would be that if you are a top student, an out of state college may grant you a full tuition scholarship.

3. Should You Start At A Community College and Transfer to a Four Year University?

This is a choice that is often contemplated and is advised by many. There are some good reasons to consider this option.

Without question attending a local community college is significantly less expensive than a four-year university. If you are not given a merit scholarship from the university of your choice community college may be a viable option.

This is also true if your high school grades were not such that you were accepted into the university of your choice. Attending a community college, bringing up your grades and then looking at transferring is a viable option.

But before making this determination there are some factors that should be taken into consideration.

Not all four-year universities will accept your associate’s degree. If you are hoping to transfer to a specific university you should check with the university you want to apply to see what classes they will accept. You need to be aware that some of your upper-level courses may not transfer.

However, keep in mind that your first two years of college are usually spent fulfilling general education requirements. Those courses are basically the same at community colleges as they are at four-year universities. General education classes usually transfer without any problems and they cost a fraction of what you’ll pay at a four-year school.

The bottom line is check with the university you are hoping to transfer to. Once you know what they require from transferring students you can take those classes you need to fulfill their expectations.

4. Should I Incur Student Loans to Pay for College?

I think it goes without saying that it is best NOT to use student loans if you can avoid it. However, there are times when there is no other option if you want to attend college. In fact, the majority of college students need some loan assistance.

However, before you start applying for loans make sure you have exhausted all other avenues to paying for college.
Do you qualify for any federal or state grant money (Pell Grants, Cal Grant)?
Have you diligently applied for new scholarships each week?
Have you spoken to your university and requested additional funding?

Assuming you have exhausted these avenues let’s look at loans.

Stafford Loans alone will allow you up to $5,500 your freshman year. Stafford Loans are yours, without regard to your credit. The rates are low, and the repayment period is extremely flexible.

If your parents can apply for the Parent PLUS loan and be denied for it, you are eligible to take out an additional $4000 in Stafford loans which bring you to a total of $9,500. Each subsequent year the amount of Stafford loan you can borrow increases. There is, however, a maximum of $51,000.

If you can get by with these Stafford loans, at the end of four years you will be looking at a maximum of $51,000 in loan debt. That is a lot of money and requires a lot of consideration before taking these loans out.

There are of course numerous private student loans that you can apply for. The warning here is that the interest rate and repayment options will be significantly greater than the Stafford loans. The more loans you take out, the more debt you will have to pay.

It is best to consider all other options before incurring private student loan debt. Remember debt is never a good thing and should be avoided as much as possible.

5. Should you Work While Attending School?

Students are increasingly more likely to work while in college. Since 1984, the fraction of college students aged 16 to 24 who also work full- or part-time has increased from 49 to 57 percent.

Not only are students more likely to work today, but they are more likely to work full-time. The share of students working full-time while going to school full-time has nearly doubled, rising from 5.6 percent in 1985 to 10.4 percent in 2000. In 2000, 828,000 full-time students worked full-time, compared to 366,000 in 1985.

Many students qualify for work-study as part of their financial aid package.

Federal Work-Study is a form of financial aid awarded to students who demonstrate financial need and meet certain eligibility requirements. You must submit the FAFSA to determine your eligibility. You will find out whether you are accepted into the program through the Student Aid Report (SAR) you receive in response to the FAFSA.

Job positions can be either on campus or off campus. For most schools, once you accept the work study award, you will be sent information regarding the steps you need to take for securing a job. You can check with your school’s Financial Aid Office to get a list of available work study jobs.

At the very least, you will earn the current federal minimum wage. The amount you are paid could be higher depending on where you work and the type of work that you perform. Your work study earnings are considered taxable income, but they are not considered in determining your financial need.

When assigning work hours, your school will consider your total award and your class schedule. Average work schedules are from 10 to 15 hours a week. Work-study hours are flexible.

If you do not qualify for Federal Work-Study, you should inquire about non-federal student employment opportunities at your school. Working on campus will give you more flexibility than working at an off-campus job because on-campus employers are usually more understanding of your class schedule and school work.