There has been a recent decline in the cost of college. For a college student or a parent of a college student, this is great. Tuition, books, extra fees and housing are being reduced. Why is this happening, and is it really a good thing? Before the cost of college was on the rise and to gain more student bodies, the schools would offer financial aid and fewer scholarships. Parents were regularly setting up a consultation with a financial institution to fund college. Rarely did a freshman know to do a consultation in regard to financing their education.
The Financial Change
Oddly, the price of a college education continues to rise little by little even though majority of students are receiving federal financial aid. The change with financing college has changed drastically in the last few years. Between the fall of 2007 and the spring of 2011, tuition was at its highest during that four-year academic calendar, particularly with public technical colleges and universities. The Federal financial aid helped students finance their education, but the loan borrowing trend increased at the same time. This is no longer the case.
For the academic year of 2018- 2019, the average net cost that included all fees dropped to $14,880 from the 2017-2018 academic cost of $14,910. The cost from the 2017-2018 was a $90 increase from the 2016-2017 year.
For private schools this year, the average net cost is $27,290, which is a 0.5% increase from the 2017-2018 academic school year that cost $27,160. The markup calculation was determined from the 2018-2019 tuition rates but included the prior year’s financial-aid data.
Grant Increase
The recent increase in grants is the reason why the cost of college is declining. This does not include student aid because it does not need to be repaid. For private schools, grants and benefits jumped to an estimated $21,220 this year from $13,860 back in 2008. For public colleges and universities, the cost of grants and tax benefits is at $6,490 this year opposed to $4,970 from 2008.
The grants for private schools are a way for the institutions to offer financial aid to students who are in the low-income bracket. This works in the favor of low-income students because they are able to receive the aid in order to continue their education at a private school, but if a student is not eligible then they are charged full price.
The larger grants helped undergrads borrow less money from the federal loan programs, which do have to be paid back. In the 2017-2018 academic year, the federal loan borrowing decreased to an average of $4,520 per student from the $5,830 that was reported in the 2010-2011 academic year.
For public colleges, the funds have increased in several states because of the recession. The funding cuts happened immediately and continue to decline while private colleges continue to increase financial aid to bring in a larger pool of qualified high-school graduates. It has been reported that this is expected to increase rapidly due to the fact that the U.S fertility rate is shrinking and in the next two decades, college-ready high-school graduates will be hard to come by.
In conclusion
While public school students are thriving off cutting the cost for higher education, private schools students, depending on their income status, are having it harder. There are several scholarships that are open to high school graduates and undergraduate students before the school year begins. Notably is the Rusty Tweed Scholarship that was founded by Rusty Tweed.
Rusty Tweed awards outstanding high school or undergraduate students that are taking courses in economics or finance related fields. An essay of no more than 600 words should be submitted to qualify. High-school students should be able to show that they have been accepted to a college, trade school, or university. Undergraduate students do not have to be on the economic major track to receive the scholarship.
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