How We Pay For College

Listen to this 'Talk of the Nation' topic

If you are moving into freshmen dorms this weekend or beginning your first semester after transfering from community college, it's likely you know what FAFSA or FFEL mean. By now, you've probably decided between a subsidized or unsubsidized loan. Or maybe you didn't have to think about tedious financial aid paperwork because your parents made sure the tuition check went out early to avoid the late fees. Whatever method you are using to pay for higher education, how are you making your decision? Sallie Mae and Gallup surveyed 1,400 undergraduate students and parents in a study called "How America Pays for College." Here's what they found: the majority of families ruled out a school that was too expensive. But, 40% of families did not limit their search based on cost. Today we ask, what was important to you in making your decision? What overules the cost of tuition? The school's prestige? Location? Courses? And if you are a parent — what will or won't you sacrifice to pay for your child's college education?

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I have a Computer Science degree from a UC that cost well over $50K. I use it to earn $0 as a homeschooling stay-at-home dad. My wife would never have been interested in me without the experiences and education college provided me. I would not be able to give my children a first rate education at home either. Education is not about dollar return.

Sent by Craig, Sebastopol | 3:16 PM | 8-21-2008

When my daughter was ready to go to college, she wanted to attend an out of state school and study pharmacology, a 6 year program. Her father and I had saved enough for 4 years at an in-state (Michigan) college.

I had my daughter sit down with a financial planner to show her what we would contribute to her education and what she would have to borrow to make up the difference. She then had to decide if she wanted to spend ten years post graduation paying back the amount she would be required to re-pay or attend school in state and maximize the amount of money we had already saved. In the end, she realized that Michigan has terrific universities and she's now Michigan State Spartan

Sent by Kendra Kerr | 3:21 PM | 8-21-2008

Looking for colleges to go to 15 years ago as a Junior in HS, I was hooked on the romantic vision of college as a ivy covered academic paradise. I wanted to go to a small private university, Kalamazoo College and major in Liberal Arts. I got a $6000 a quarter scholarship, but was still $12,000 a quarter short. My practical public servant salary parents resisted and said if I could find a way to pay for it, I could go. I didn't, and I was crushed. I went to Western Michigan and was miserable for a year until I dropped out. I moved away and ended up going to Colorado State 7 years later, where I got a degree in Philosophy. I couldn't have been happier with my choice. I got an incredible value and got to study what I wanted, and graduated with 0 in loans. I doubt I would be in the same position had I graduated from K College.

Sent by Emily Demmler | 3:22 PM | 8-21-2008

I did not want my parents to pay for my graduate school. When I decided to get a MA in History, I investigated all the big schools with specialties in American History. It became apparent that I could not afford the school of my choice - the University of Virginia -ten grand for two years. The idea of owing that much money coupled with the scanty salaries in my field, scared me to death. Fortunately, I received a scholarship and an assistantship at a state university, and basically got a free MA in history. Not able to find a steady job in my field, I went back to grad school for a Masters in Library Studies and had to choose between two state universities in North Carolina. I selected the one that gave me an assistanstship, and I had a job waiting for me when I graduated. It is really important to consider what your prospects are after graduation.

Sent by Shelia Bumgarner | 3:22 PM | 8-21-2008

My wife and I are expecting our first child in January. I feel strongly that we should pay for our child's education. What should we plan to save for college in 18 years? The 10% a year increases aren't sustainable, are they?

Sent by Jason | 3:34 PM | 8-21-2008

Returning to school at University of Phoenix, Tulsa branch. I am graduating in Feb 2009, but have been looking for a career in my new field and there is a problem getting hired being close to 50 years old. What are my chances of getting a job with at Bachelors degree in Health Administration (no health background, but 20+ years in accounting).- but now have a 26K loan to pay.
Thank You. (advise please)

Sent by Tery | 3:35 PM | 8-21-2008

My husband and I looked into the pre-pay program that Michigan offers, however, we decided that until we finish paying off our college educations that our four year old's college will have to wait. This may be part of the reason that this program is not taken advantage of very often. Young parents are still paying on their loans and may still be paying on them when our kids graduate high school.

Sent by Sonja | 3:35 PM | 8-21-2008

This is so tough! There's no way that the average family can pay for the real, regular costs of raising kids, pay for a home, save for college, and save for retirement! My daughter got a good package at her private college, but in order to us to put away for retirement she had to agree to repay the PLUS loans we had to take out. My son didn't go to college right away, and now probably never will becuase the costs are enomous!

Sent by Jim Revell | 3:48 PM | 8-21-2008

TuitionCoach.com is the most valuable resource I have found relevant to figuring out how to pay for college.

Sent by Joe Sandmeyer | 3:49 PM | 8-21-2008

I have had to pay for my own schooling, so I found Boise State University has a fee waiver program for staff who earn benefits. I gained employment with the university and I've been slowly, but surely (and without debt) earning my degree.

Sent by Sylvia Gomez | 3:49 PM | 8-21-2008

We never really encouraged our son to attend an out-of-state college, knowing that we did not want to incur a boatload of debt. Our son received a partial tuition scholarship and he attended a small state school in AZ, rather than one of the mega state schools. My husband and I also attended small state schools, but we paid our own way, and I remember the difficult years of trying to repay college loans. I did not want my son to feel crushed by having to repay a loan. We spent around $50,000 for 4 years and were able to pay for one study-abroad semester in Ghana, Africa. Our son contributed $4000 to his education. He had a wonderful experience living in a medium-sized college town; he was active in campus academic organizations - including the Model UN; and he had great one-on-one relationships his professors. Having graduated last May, he has applied to the Peace Corps, but in his heart, he wants to attend graduate school at Stanford University in the future. GROAN. We are approaching retirement, so he'll be on his own for grad school.

Sent by Vicki Donkersley, Tucson | 3:50 PM | 8-21-2008

I am surprised that no one is talking about transferring from a JR college. Both my husband and I did this and had great experience. And it costs way less than going 4 years to a University. This is also a great way to allow a student to explore without going over budget. When your student goes on to a 4 year they'll know what major they want and will be at a level where you will be in smaller classes even if you are going to a public school (my husband went to UCSD and I went to SDSU).

Also encourage your child into the sciences. My husband is currently in a PhD program at UC Davis and is being paid to go there.

Sent by Happy Grad | 3:52 PM | 8-21-2008

We started talking to our children when they were in middle school. The deal we made: Go out of state...make up the difference in scholarships. Our daughter did and had a full ride at North Carolina (that was the one she selected). Our son decided not to work that hard and we paid for U.K. They are now happy graduates...one a doctor and one owns his own company. Why is no one talking about Community Colleges with the cost of college today?

Sent by Jeffre Dreyer | 3:53 PM | 8-21-2008

When my brother and I were in high school, our parents quickly realized the money they had saved to help us go to college was not going to be near enough - imagine that for a family of four living on one skilled labor income, huh? Knowing my older brother would blow through that money before I even started packing for college, they used the money to fund my mother's education, turning her 20 year old associate's degree in accounting into a BA. She used the money she made as a fulltime CPA to help us considerably, paying rent and other living expenses for my brother and me as we worked on our educations and racked up loans in the amounts of our tuition.

We both graduated with honors (from in-state schools), and I earned my degree in Nonfiction Writing from the University of Pittsburgh Magna Cum Laude and with departmental honors. I chose Pitt because I loved the city and their writing programs fit what I wanted to do, I have yet to find a school with a truly similar program. I have about $27k in loans, but I also now have a solid job in behavioral health care administration (which isn't *completely* relevant to my education, but does make me happy and engages the skills I learned in that program) and I make more than my CPA mother - I'm 23 years old.

I feel our situation worked out well, but I know that we were lucky and it blows my mind to see parents taking on debt to send their children to school. I think half the reason we were able to do this is that my parents owned the house outright and weren't in any debt. I can't imagine ending up in two, three, or more times as much debt as I did for a BA - I feel that forces people to go directly to grad school whether or not that is best for them.

I feel for those younger than I am; it seems like I got out just before things got even crazier than they were. I really hope that the cost of education or our national system for funding it changes, and soon.

Sent by Jamie Hribal | 3:56 PM | 8-21-2008

My wife and I are university professors whose children are finished. For those whose children know that they are headed for graduate school, the name and prestige of the undergraduate school is less important than the school from which the graduate degree is obtained. What matters at any graduate school are are: good undergraduate grades, taking the hard courses, and outstanding scores on the relevant graduate school exams: GRE, GMAT, MCAT, LSAT, etc.

Sent by Haynes Goddard | 3:57 PM | 8-21-2008

I never thought I could or would attend college mainly for financial reasons. I didn't join the military (I would have ended up in desert storm) because my veteran father advised me against it; I wish I had ignored him. I spent seven years working my way through an undergrad degree and later got a masters and have succeeded fairly well for being the youngest of five in a single parent,low-income (mother was a public school teacher) home. I could never have done it without using my state's community college system as a springboard, BUT, with the benefit of hindsight, I would do whatever I could to get through it faster. While I felt enlightened at the time, as a non-traditional student, I have become a huge advocate of speedy education. The longer it takes the more you forget, and the less effective (and more exhausting) the education.

How do you afford to do that is a good question. I might have gotten Pell Grants had my mother not continued to claim me as dependent even though I lived 300 miles away. By the time I had given up on and ideals about education and was desperately looking for a way to graduate as fast as possible without accumulating more debt, the state finally started throwing financial aid at me--unfortunately it was too late.

What did I learn? Establish independence early (a lot of rich kids I met in school had parents who emancipated them so that they could take advantage of money for financially disadvantaged students). Take advantage of community colleges and even high school advanced placement credits (I might go so far as to recommend getting a GED before HS graduation so that you can begin racking up those credits at community college before university). And, beg and borrow to get it done, but don't waste any time doing it.

Sent by danL | 4:18 PM | 8-21-2008

When first faced with the decision of which college to attend, I really wanted to go to Rice University. I then received a full ride (and then some) to attend a public school. I seriously considered the value of each, and just couldn't reconcile choosing an education that would set my parents back well over $100,000 when I could receive a quality education for free (especially with two younger siblings behind me). Ultimately, I chose the public school and graduated with an excellent job. I truly feel that it is up to the student to make the most of his or her university experience, no matter which school.

Sent by Nicole | 4:25 PM | 8-21-2008

I'm currently an undergraduate at a very expensive university, but how I ended up there sheds light on the fact that expensive universities know how important financial aid is to kids of middle income families, and will go to great lengths to make their schools appear affordable.
I decided which colleges to apply to based mostly on cost, choosing small, liberal arts schools known to be generous with scholarships. However I did apply to a few expensive, stingy schools more or less on a whim, and one of those schools wooed me with a scholarship that was comparable to the one's I was offered at the small colleges. I accepted the offer, with my dad's blessing, because we believed my scholarship to be a four year scholarship.
Not until after I became a student did we find out that the scholarship was indeed not guaranteed for four years, but also that it wasn't renewable based on my scholarly performance, but on my dad's income. The financial aid department even admitted that they draft these letters with the goal of confusing families so that they will accept the offers.
So now as I enter my junior year, my "scholarship" is gone because my dad no longer has two children in college, and my dad is forced to pay an ungodly sum to send me to school. And my collegiate academic performance has played absolutely no role in the school's decision not to renew my "scholarship."

Sent by Jocelyn Wagman | 4:31 PM | 8-21-2008

As a mother of four, who has saved nothing for their education, I am about to begin a doctoral program this fall. My hope is that despite the financial hurdle, I will be role model for my children to work and seek a school and career congruent with their personal aspirations. Since my four children are all within four years of each other, my concern is they will all want to be writers and attend a prestigious college like Middlebury or Williams College which is $50,000/year. Just as I am pursuing my dream (and taking out student loans to do so); I too would encourage my children to fulfill theirs. Even though Stafford Loans require parent(s)' names on the loan, is it possible to have an attorney write a document transfering financial liability for the Stafford Loan to the child? Thank you!

Sent by Cricket Braun | 10:13 PM | 8-21-2008

In 1981 annual tuition for a state school in Ohio was $1500. I started at Youngstown State, then moved out on my own and finished at Ohio State. Along the way I moved from a 3.0 GPA to straight A's, and then a department chair at Vanderbilt cherry-picked my application because he liked my concentration in math and science. That got me a starter scholarship, followed by piecemeal teaching and research stipends and about $12,000 in debt before I finished my PhD in 1993. Starting salaries for university teaching was $35,000, but six years later I moved to the private sector and now I earn between $150K and $180K per year, depending on bonuses. The work is interesting and challenging, and I was lucky to find my earlier math and science focus positioned me for the information age.

My point here is that I belive where you end up is more important than where you start and good grades and good fortune will get you into a solid grad program that will boost your earning power. But the most important factor for me was and continues to be skill set, and today I will pay the same starting salary for an analyst regardless of their GPA or alma mater -- I pay for skill and promote based on merit, as do my peers.

Sent by William P | 10:55 PM | 8-21-2008

I am the budding artist mentioned in this show. I went to the Rochester Institute of Technology (RIT) and majored in advertising photography with a minor in marketing. My education ended up costing close to 150,000 which is not that bad. However, when you factor in the cost of all the supplies I needed i.e. a digital SLR, fancy film, printing paper, a macbook, the cost of school came to almost 200,000 over all. I am blessed to have 2 supportive parents who saved and paid for college so there was never a hold on my account and I had everything I needed. Now the harsh reality has set in because I am 17,000 in debt and was under the strange impression that I would be making tons of money with my BFA post graduation, worry free! Granted that is not a lot of debt but for a young photographer it can be a bit stressful, however, it is managable. Great show!

Sent by Carmen Council | 9:09 AM | 8-22-2008

To attend schools such as Harvard, Yale, Princeton, Georgetown's School of Foreign Service, Columbia, Northwestern or Penn's Wharton School, we would gladly sell our house, take out loans and cash in retirement plans if needed. Education is a top priority for us. We, however, would not do the same to enable our child to attend a liberal arts college. You only get one chance to earn a bachelor's degree when one's mind & character are in such an impressionable stage of development so it is best to be around the brightest & hardest working peers in the most challenging & demanding academic environment for which one qualifies.

Sent by college parent | 11:46 AM | 8-22-2008

I applaud the focus on taking into account the cost of college, how one pays for it, and the financial benefits one receives as a result of a degree. One can loop at the Department of Labor's Occupational Outlook Handbook (http://www.bls.gov/oco/home.htm) to further focus on wages one might earn.

I do wish to note that while the cost of an education is one that can be recouped, not finishing college creates a cost to the individual or the family that will not be recouped.

Please be careful in making blanket statements and exhortations about attending college -- one must have a certain amount of maturity to succeed in college.

Sent by Lennox Parker | 11:57 AM | 8-22-2008

We have 5 teenagers and even though my daughter got small scholarships for her freshman year, we can not help her and she is taking out student loans. Because we have two more kids starting college in two years and our 13 year old has a medical condition, we feel like there is nothing that we can do. Any suggestions?

Sent by Laurie | 5:54 PM | 8-23-2008

I have heard that it is not a good idea to use a home equity loan to pay for our childrens college. We have 2 kids and about 1 year of tuition saved for each. Please advise

Sent by Chip Prokop | 7:34 PM | 8-23-2008

Teri, you might find yourself very desirable to private doctor (dentists, chiropractor, etc) offices as an Office Mgr. They can make good $ & grow into bigger jobs/groups. Accounting background sounds good.

Sent by Susan | 8:44 PM | 8-23-2008

Credit requirements are tougher now, and loan options are fewer because many banks no longer view private education loans as a good investment. So the numbers will be a lot different for the 2008-2009 school year and beyond. Fewer students will be able to afford to go to college, but many resourceful students will discover innovative funding sources.

A larger percentage of college students and parents will seek alternative funding sources, such as contributions from family, friends, and alumni. Alternative funding websites, such as SchoolRaise.com, are available to help students and parents reach out to the people in their social networks (friends, family, alumni, etc.) and request help paying for college, $50 at a time.

Sent by Janie | 8:35 PM | 9-2-2008