Although education is a right, it can sometimes become a privilege once the student reaches college. Reason: it’s expensive.
According to the US News & World Report, the average tuition fee for public colleges or universities now falls between $11,000 and $27,000. It depends on whether the student is a resident or comes from out of state. Private universities expectedly carry a heftier price tag of over $40,000.
Moreover, tuition fees have been rapidly increasing throughout the years. Between 2008 and 2021, data suggests that it will only balloon by a whopping 72%.
The high cost of tuition hurts parents and students, more so if they are from low-income households. In a OneClass survey, at least 56% of the students already expressed they couldn’t afford to pay their tuition partly due to the pandemic that left them out of work.
However, while the prospects seem grim, everything is not hopeless. Parents and their children can actually explore a dozen options to make college possible:
1. Pick Schools in the Affordable States
When students and parents plan college, they set their sights on those in states like California or New York. However, many states can offer an excellent education for a much lesser price.
These include some of the best colleges in Oklahoma. In the southern region, the tuition fee for a two-year course in a public school is only $2,730, according to ValuePenguin.
Meanwhile, adding two more years can increase the cost to $9,330. But this is the lowest fee among all the regions. ;
In Oklahoma, a resident may pay about $8,460 while those out of state may need at least $22,000. It is more affordable than a college education in the surrounding states. For example, in Colorado, an out-of-state student may need to cough up $30,600. A student who lives there pays about $10,800.
2. Fill Out Application Forms for a Pell Grant
In a NerdWallet analysis, college students missed out on taking over $2.5 billion of Pell grants because they failed to complete the application forms. More than 60,000 students didn’t receive the awards for what seemed a simple but significant overlook.
Depending on the college the student hopes to enroll in, a Pell grant may not be enough to cover the entire tuition. However, the maximum amount they can receive can reach $6,345. It can also increase. For instance, in 2018, the highest grant was $6,095.
Most of all, unlike other college loans, students don’t need to pay it back. They can also use the money besides tuition. These include books, room or accommodation, and other expenses. Students may also go to school part-time or full-time.
Pell grants are specifically intended for those who belong to lower-income families. Most recipients live in homes whose earnings are between $20,000 and $30,000 annually.
3. Take Out Loans for the Child
Parents can apply for student loans on behalf of their children, choosing between private and federal debt. Each has pros and cons:
- Private loans may offer interest rates lower than their federal counterparts like PLUS loans. For instance, a fixed interest rate from a private lender can be around 3.53% compared to over 5% of Parent PLUS. However, private loans may also be variable. If the interest rates rise suddenly, it may be more difficult for parents to pay.
- Both loans may cover the full financial need of the child. Here, loans may be better than grants. Students only need to focus on their education, or both parents and students may work and use the funds to save up for the repayment.
- Parents can deduct the interest on their taxes. Whether the parents took out a private or federal loan, they can deduct up to $2,500 from their taxable income, although they need to choose itemized instead of standard deductions.
- Federal loans may be discharged or forgiven. Some situations may cause a parent PLUS loan to be forgiven or discharged. If the parent is less likely to pay the debt in the long-term, they may apply for an income-contingent repayment plan. It limits the parents’ payment up to 20% of their discretionary income and forgives the remaining loan balance after paying for at least 20 years. Meanwhile, the loan may be discharged if the parent files for bankruptcy and they die.
Unfortunately, the hard truth about education is it’s not the same for everyone. It may be a steep hill to climb for those born in a low-income household. But parents and students have options they can explore.