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Money and myths are things that go hand in hand when you discuss financial aid. This week, I'm going to address some of the most common myths I've been hearing lately! Enjoy.
Myth: College tuition costs more than $20,000 a year. Reality: Of the 3,600 colleges and universities in America, 81 charged $20,000 or more for tuition and fees in 1997-98. When on-campus room and board charges are added, about 300 institutions cost $20,000 or more before student aid is deducted. Myth: Private colleges are always more expensive than public colleges. Reality: On average, private colleges usually cost more than public institutions, even after aid is deducted; however, there are instances in which a private college is less expensive, after student aid, than a public institution. For example, the cost of a private institution, less student aid, often is less than a public institution outside one's home state. Myth: Only the very rich can afford college. Reality: About 20 percent of traditional-aged undergraduates come from families with income below $20,000 per year. The federal government, states, and institutions all offer financial aid to help low-income students afford college. Myth: The middle class gets socked by college costs - there's no help for them. Reality: A wide variety of aid programs are available to help middle-income families, including many grants and scholarships. At public colleges, about 30 percent of students with family income between $50,000 and $70,000 receive grants averaging $1,700. At private institutions, almost 80 percent are awarded grants or scholarships that average $6,000. Myth: It actually hurts you to save for college because you get less financial aid. Reality: Those who save will be expected to contribute more toward their children's education than those who don't save. However, the formulas for determining the expected family contribution count income far more heavily than savings, so the difference is usually not substantial. Furthermore, a family that saves will have the funds necessary to meet their expected contribution, while a family that does not save may have to borrow - with interest charges more than making up for the smaller expected contribution. Myth: You really don't need college to be a success - look at Bill Gates. Reality: Bill Gates' story is exceptional. Today, the average annual income of male full-time workers with a bachelor's degree is almost 50 percent higher than for those with a high school diploma. Those with an associate degree earn 20 percent more than high school graduates. The earnings differentials are just as large, if not larger, for women. Today, some postsecondary education or training is necessary for almost every good job.
The copyright of the article Money vs. Myths in Financial Aid is owned by . Permission to republish Money vs. Myths in print or online must be granted by the author in writing.
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