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A college education is within reach for all

Paying for college is not easy but will seem less daunting after dispelling some misperceptions about college financing.

First, regardless of family income, fill out the FAFSA ( www.fafsa.ed.gov). This essential form is used by the federal and state governments and your student’s school to determine financial aid. The deadline is March 10. Free help is available at community-based sites across Indiana on College Goal Sunday, Feb. 23.

College Board offers additional advice:

Costs: During the last 30 years, the average published tuition and fees at four-year private schools have increased by 153 percent to $30,094 and by 231 percent to $8,893 at four-year public schools. Room and board averages an additional $9,000 to $10,000. However, most families don’t pay sticker price for tuition and fees. The actual average price paid by students for tuition and fees (excluding room and board) is $3,120 at four-year public schools (65 percent below sticker) and $12,460 at four-year private schools (59 percent below). After adjusting for inflation, the net cost at private colleges is 8 percent lower than a decade ago.

About two-thirds of full-time students receive financial aid. The average undergraduate receives $13,370: $7,190 in grants, $4,900 in federal loans and $1,280 in tax credits, deductions and work study.

Low-income families: A four-person household with income of $43,568 or less is eligible for Indiana’s 21st Century Scholarship and the federal Pell Grant. A student with these grants will pay nothing for tuition and fees at Indiana public schools and an average of just 10 percent of the tuition and fees at four-year private schools.

Middle and upper income families: For families in the top half of household income, financial aid reduces the public school sticker price by 25 percent to 33 percent and the private school sticker price by 40 percent to 50 percent.

Many upper-income families are eligible for the federal education tax credit and deduction. The tax credit is available to households with adjusted gross incomes as high as $180,000. In fact, 21 percent of tax credit dollars went to households with AGIs higher than $100,000, and 57 percent of tax deduction dollars went to households with AGIs between $100,000 and $160,000. The tax credit and deduction on average are worth $1,330.

College loans: According to the Institute for College Access and Success, 71 percent of college graduates compile an average debt of $29,400. Indiana is below the national averages, with 64 percent of graduates holding average debt of $27,886.

According to the Indiana Commission for Higher Education (www.learnmore.org), college loan debt should not exceed expected first-year salary.

Lower your debt further by earning your degree in four years (or less). The average student loan per school year is $4,900. A student who graduates in four years would have student loan debt of $19,600 (33 percent lower than the national average).

Two-year public institutions can be an affordable alternative. Two-year schools can help you save money. You can earn an associate degree in two years and then transfer those credits to a four-year school if you choose. Full-time students in public two-year colleges on average receive enough financial aid to pay for tuition and fees, plus another $1,550 to pay other expenses.

Search for scholarships. A good place to start is www.triptocollege.org

Other families have figured this out, and you can, too. Despite financial challenges, the number of students going to college and graduating is rising. Since 2005, the number of undergraduate students has increased by 1.9 million. Between 2001 and 2011, the number of associate degrees awarded increased by 63 percent, and the number of bachelor’s degrees increased by 38 percent.

The payoff is worth the effort. Median family income for families headed by a four-year college graduate is $101,909, more than double the median income for families headed by a high school graduate.

Bill Stanczykiewicz is president and CEO of the Indiana Youth Institute. He wrote this for Indiana newspapers.

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