Finance & Marketing

Over the last 25 years the cost of education has gone up dramatically. Tuition fee increases in excess of 6% per year are commonplace today. As an example, in 1973 the price to register at UCLA (University of California) was in the region of $200 per quarter while now it is well over $2,000 per quarter.

That tenfold increase is not at all abnormal and many things now cost ten times more than they cost back in the 1970s. On the other hand, wages have risen approximately threefold in the same time period from in the region of $15,000 - $30,000 per year to approximately $39,000 - $42,000 per year. These figures vary according to gender, age and more although as a rough guide a threefold increase is about right.

Happily there is some good news. There are a lot more forms of financial help available now to both parents and students than ever before. Financial assistance, as the name suggests, is money that students and their parents receive from grants, scholarships and loans granted by Federal and private lenders to aid students in paying for their education.

Formerly, students could depend almost totally on Stafford loans and Pell grants to finance their education costs and college living expenses. Nowadays Pell grants are still issued although they are need based and represent a very small percentage of college costs today. A Stafford college loan is also need based but can meet 25% to 40% of the average cost of financing school nowadays. Another type of aid is Perkins loans which are similar to Stafford loans but which are issued only to the lowest income families.

Happily, PLUS loans are also available nowadays and these were not available 25 years ago. Although they are known as student PLUS loans are given to parents and not students to help them to pay for their child’s education. Interest rates on PLUS loans are average and there are a few restrictions and fees to pay but they often form part of the student’s overall package of college funding.

One very quick note on the subject of fees. Many loans are for a specified sum of money like $6,000 per year to be disbursed in several payments (usually once each semester). But it is not uncommon for up to 4% in fees to be deducted from that amount before any funds are disbursed. That 4% fee on your $6,000 equates to $240 which you will not see but which you must repay. If you are searching for a loan make sure that you do your homework and look for a low or no-fee loan.

Though Federal loan programs such as the subsidized Stafford loan program have low fees and the government pays the interest, they are not the only type of financial assistance nowadays and are not necessarily the best option.

Finding the funds to cover the cost of education nowadays is a complex operation and the majority of students will need to put together a funding package which includes scholarships, grants, government loans and private financing.

Fortunately, there are now many more funding options available than ever before and competition in the open market between private financial institutions especially means that it is possible to obtain funds at a price which is not going to break the bank.

You are also fortunate to be living at a time when finding the information which you need about college loans and grants to make reasoned decisions about the options open to you is also quite simple.