Top 10 Myths of College Funding

College is not a luxury for anyone seeking a lucrative career; the difference in lifetime earnings between a high school graduate and a college graduate is over $1 million and climbing. However, no matter how much time parents spend fretting about college most families are still at a loss as to how to pay for it. Below are the Top 10 Myths of College Funding and a reality check for each.

10. College Is About Education

Higher Education is a business, and like all other businesses colleges need to watch their bottom lines if they expect to be around much longer. Even not-for-profit organizations cannot operate in the red indefinitely. If you start to think about college as a business you can start to act as a more rational consumer. What is their offering? Are there other options at a lesser cost or better value? Other than the home, college is often the most expensive purchase families make. It is worth your while to step back from the pretty brochures and the hype and view college opportunities for what they are - businesses selling services.

9. College Is Really Expensive

Yes, college is really expensive, but it doesn't have to be. There are many options for families seeking the greatest value for their educational dollar. Community colleges, AP courses, joint high school and college curricula and similar opportunities allow students to earn college credit at a very reasonable price. Furthermore, there are many excellent four year colleges that cut their rates for students they deem most attractive. You have options, so broaden your college search. To use a car analogy, you might want a BMW, but you don't really need one when there are dealer lots full of discounted, very nice Hondas and Toyotas to choose from.

8. Private Schools Are More Expensive Than State Schools

The sticker price for most private schools are higher than for most public schools, especially when compared to your in-state college choices. However, out-of-state public school costs rival those of private schools, so you won't get much of a break going out-of-state. More importantly, however, is that families should not pay too much attention to the sticker price. It is only relevant to the family what their actual cost to attend will be, not what is printed in the brochures. It is often less expensive for a student to attend a private school so do not rule out private colleges in your search.

7. Scholarships Will Help Pay For College

If the student qualifies for a need-based financial aid package, outside or third party scholarships are unlikely to lower his out of pocket cost. Most colleges will simply replace part of the financial aid package with the third party award, thereby keeping the total bill about the same. Scholarships given by the school in question are simply tuition discounts and are awarded for many different reasons. It is best to have affordable backup options, for example, a solid college that will offer the student a sizable award because of her GPA or test scores, to offset higher-priced colleges.

6. My Student Needs To Get A Scholarship Or I Can't Afford To Send Her

Your student will have options if you take the time to search for colleges that are reasonably priced, will offer her need or merit aid, and will work with her to make college affordable. If you don't look for options you won't find them.

5. The Sticker Price Is What We Should Expect To Pay

The sticker price is never what you actually pay. If you choose to pay full freight at a college you also need to expect real additional costs. These real additional costs will include transportation, weekend meals, the almost mandatory laptop and course software, cell phone usage, the extra-long sheets for the dorm room twin bed, and various other personal expenses for your student. If you thought having him at home was expensive, you've got a surprise ahead. You also won't pay the sticker price if you qualify for need or merit awards and discounts.

4. Financial Aid Packages Are Not Negotiable

Aid packages may not be negotiable, but they sure are flexible and can be appealed and reviewed. Colleges will often adjust awards if there has been a significant change in circumstances since the aid application was filed, such as a job loss or sickness in the family. They will also work with the family to tweak awards to help the student attend; after all, the college admitted and wants to matriculate the student. Finally, in some cases the colleges will adjust, or even match, an award package offered a student by a college they deem a competitor.

3. We Don't Need To File The Financial Aid Forms

Everyone should fill out the financial aid forms for three reasons. One, you won't get any aid if you don't apply. Two, if your circumstances change for the worse during the college years, making you eligible for aid, you won't get any without the forms on file. Third, if you don't qualify for need-based aid but the student is given a scholarship many colleges cannot release those funds to the student unless the forms are on file.

2. We Make Too Much Money To Get Financial Aid

Hogwash. Everyone who fills out the forms will get some aid, even if it's just a loan package. And frankly, sometimes a loan is just what you need to smooth out your cash flow so you have the time to get your financial house in order.

1. There Is Nothing We Can Do

There is always something you can do. Be rational in your college search, economically and otherwise, and approach college costs as a large expense - or investment - financial planning issue. That way no family is at the mercy of the 'financial aid process' alone. Take charge, be proactive, and your college costs will not be an insurmountable obstacle.

by Bill McCumber