Author: Donald Saunders
Source: articledashboard.com
Just like everything else the cost of college education has risen considerably. Increases in tuition of more than 6% a year are commonplace nowadays. For instance, back in 1973 the price to register at The University of California (UCLA) was approximately $200 a quarter and today it is more than $2,000 a quarter.
That tenfold increase is not too abnormal and lots of things cost ten times more than they did 25 years ago. Wages, by contrast have increased approximately threefold in this same time period from in the region of $15,000 - $30,000 a year to around $39,000 - $42,000 a year. The numbers vary according to age, gender and more although as a guide a three times increase is just about right.
But it is not all gloom and doom. There are a lot more types of financial help available nowadays to parents and students than there has ever been. Financial assistance, as the name implies, is money that parents and students receive from grants, scholarships and loans granted by Federal and private lenders to help students to pay for their college education.
Formerly, students could depend almost totally on Stafford loans and Pell grants to finance their education costs and college living expenses. Today Pell grants are still issued although they are needs based and represent a very small percentage of the education cost today. Stafford loans are also needs based but can range from 25% to 40% of the average cost of financing school nowadays. Another type of aid is Perkins loans which are similar to Stafford loans but which are issued only to the lowest income families.
Happily, PLUS loans (Parent Loans for Undergraduate Students) are also available now and these were not an option a few years ago. These are loans provided for parents and not students to help parents in paying for their child's college education. Interest rates for PLUS loans are average and there are some restrictions and fees levied but they often form an important part of the student's overall package of college funding.
A word to the wise on fees. A lot of loans are for a specific amount of money like $6,000 a year disbursed in several payments (often once each semester). But it's common for fees of up to 4% to be deducted from the loan amount before the funds are disbursed. That 4% fee on your $6,000 equals $240 which you will not see but which you must repay. If you are searching for a loan ensure that you do your homework and look for a low-fee or no-fee loan.
Despite the fact that Federal loan programs like the subsidized Stafford loan program have low fees and interest is paid by the government, they are certainly not the only form of financial assistance nowadays and are not necessarily the best option.
Funding the cost of college nowadays is a complicated operation and the majority of students will have to put together a funding package which includes scholarships, grants, government loans and private financing.
Fortunately, there are now a lot more more funding options available than we have seen for a very long time and competition in the open market between private financial institutions especially means that it is possible to find funds at a price which will not necessarily break the bank.
You are also lucky to be living in an age where finding the information which you need to make wise decisions about the options open to you is also relatively easy.
