The last several weeks I have been reading article after article discussing the concerns that people have about affording college given the current problems in the economy. A recent article entitled “Economic crisis upsets student’s college plans” is typical of the articles. While I sympathize with the feelings being raised by people who will need to pay for college, once again I am disappointed at the response in the mainstream media about how to respond to this issue.
One of the critical factors that is not being considered or discussed by most of these articles is the need to understand how college financial aid works and how it varies from college to college. For new readers to the blog who are not familiar with some of these issues take a look at my basics of financial aid.
It is critical to understand financial aid issues at all times but even more so now with difficult economic issues facing many households. A simple example will illustrate my point. If you are considering three colleges how do you know which might be the cheapest for your family. If College A meets 100% of your need, College B meets 80% of your need and College C meets 60% of your need, which is the better deal? Even if College A is the most expensive, it may be cheaper than the other colleges because of the financial aid you would receive. Most people’s reaction to a loss of value in the stock market or in the value of their home is to look at the college with the cheapest stated cost. Yet, very often, this “cheap” college will end up costing you more money in the long run.
Even if you are considering a state college you are probably facing at least $80,000 in cost for your education. Where else would somebody consider spending $80,000 without understanding what the real cost of the item will be? Become educated consumers and find the best college for you while saving money.