As with common concerns about the
economy, recession, and the rising cost of living, there is a grave concern
(and dilemma) with the rising cost of education – in K-12, public, private, and
higher education.
A large
part of scholarships includes reasoning through the students and academic
programs worthy of a scholarship. How do you determine if an Ivy-league degree
is more or less beneficial than a state-public school degree? In addition the
accreditation of the university or college is the cost benefit of the education
– an issue I have witnessed and dealt with first hand through this internship
experience.
In a recent visit to Nevada,
President Obama emphasized the issue of inaffordability of college loans. He
told the university community at University of Nevada, Las Vegas, “making
college affordable –that’s one of the best things we can do for the economy.”
He was referencing the battle with Congress concerning the Stafford loans – the
interest rate was cut to 3.4% five years ago in an effort to help borrowers ;
however, the rate is due to double back to 6.8% on July 1st (Read
the full article here: Obama Criticized Republicans Over Student Loan Rates).
The rising cost of tuition and the
cost of living go hand-in-hand. More recently, Vice President Joseph Binden met
with 10 university and college presidents who have agreed to include a “shopping
sheet” in financial aid packages sent to incoming students. The shopping sheet
would clearly state the cost of attendance, students’ net cost after grants and
scholarships, and financial aid options to pay and estimated monthly payments
of federal loans (Read the full article here: Biden and College Presidents Talk About Paying the Bills).
Although
the information about federal and private loans is available, the convoluted
explanations and terminology blur the distinctions between grants,
scholarships, and loans, making it unclear of what amount needs to be repaid
and with who interest rates.
$904 billion of student loans were
borrowed by Americans by the end of March (8% higher than 2011). According to a
Wall Street Journal article, student debt is quickly rising, not only due to
higher tuitions but also because alternative ways of paying for college (e.g.
home-equity loans) have dried up. In addition, college enrollment has increased
due to the scarcity of job openings (Read the full article here: Student Debt Rises by 8% as College Tuitions Climb)
It is a
common known idea that “educated workers, on average, earn more than workers
with less education and college grads are much more likely to have jobs than
those without college degrees.” However, it is not necessary that borrowing
money to go to school always makes sense.
Therefore,
it is important for students to carefully weigh the options of funding higher
education and its long-term benefits. Not only is the institution’s reputation
important to consider, but, in layman’s terms, also what is your “bang for the
buck.”
Click on the image to test your knowledge of college financial aid:
Pop Quiz Answers: Subsidized vs. Unsubsidized Loans
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