Read the paper this morning? The news was not good…“Ohio No. 45 in College Affordability”. What does this mean? Ohio families have the hardest time paying for public colleges and universities—only 5 states had worse college affordability rankings. Ohio is one of the least affordable states in the US! How did this happen? But more importantly...what can be done?
The Institute for Research on Higher Education at the University of Pennsylvania conducted the study. They found:
College is less affordable across all states than it was in 2008. (We could have told them that!)
Student financial aid does not provide like it used to. Ohio only provides $97 per undergrad in need-based aid. (Compared to the $474 national average.)
Full time students cannot “work their way through college” like they used to.
Low and middle income families must use debt to fill the gap.
These same families are already facing financial hardships and cannot finance their education.
The Institute measured college affordability by looking at expenses including tuition, room and board, fees and books. They subtracted all state, federal, and university financial aid. Then they compared that figure to the resident’s income.
According to the Dispatch in Ohio, families earning between $48,000 and $75,000 per year are faced with paying 31% of that income to cover the $18,676 net cost of a public 4-year research university. (Public 4-year research universities are often very expensive with little financial aid.) How can a family afford to cut their income 31%?! Even families making more than $75,000 per year are still looking at a large share of their income.
The study proposed several different ways policymakers can tackle the college affordability problem like managing rising tuition and new pathways to shorten the duration of college. But these ideas are not for you and me—the families. These solutions are for state and federal governments looking at the big picture.
So what can you do?
1. Start early. It often bears repeating so we’ll repeat it here. Save what you can as soon as you can. Don’t have a clue about what you’ll need to save? Contact us and we can provide you with a free college funding gap report showing you how much you’ll need to save. It can start you on a path.
2. Take advantage of programs now available to our high school students like College Credit Plus (CCP), Advanced Placement (AP), and International Baccalaureate (IB). CCP allows your student to take college courses for actual credit for free! (Your home school district foots the bill.) Instead of going to high school calculus, send them to college calculus at a Columbus State or other school. They’ll start college with credit already under their belt, and you’ll have fewer credit hours to pay for.
Many families are familiar with AP courses as a way to also earn college credit. Remember though with AP, your student will need to achieve a certain final test score to earn credit (depending on the college’s requirements).
The International Baccalaureate (IB) program can also earn college credit. We have touched on this topic before. But as with AP certain conditions apply so be aware of how credit is earned.
3. Learn how it all works. Paying for college is more complex than sticker price, 529s, and student loans. You need to learn how to determine what financial aid you can expect, how do colleges provide aid, and how you can save on the cost of college for your family. Take advantage of one of our programs to be an informed consumer.
4. Be proactive with your student. Have the money talk early. Students need to know how paying for college really works. They need to know what is expected of them in terms of paying for college. Do you expect them to pay part of the costs? If yes, students need to start early working and saving. The Dispatch article pointed out that students earning a federal minimum wage would have to work 48 hours per week to pay for a public research university. Not very likely! But early planning is key. Our blog about teaching budgeting to your student is helpful.
5. Also be aware (and be sure your student knows) how impactful their grades and test scores are on the cost of college. Miami University of Ohio lists their tuition at $14,233 for an Ohio resident. But did you know if your student has a 3.5 GPA and a 28-29 ACT score, they can receive between $2,000 and $7,000 scholarship per year? Higher scores...more money. Knowing the impact can be a real eye-opener for students.
6. Understand student loans. It can all be confusing…parent loans, federal loans, private loans. Here’s a refresher. For many families, using student loans as part of an overall funding strategy is unavoidable. However, be smart and be informed. Look at the big picture…all four years. Take your student’s starting salary into consideration. (We recommend not borrowing more than the anticipated first year’s total salary.)
So you’ve taken all these tips into consideration. You’ve become a smart informed consumer of a college education. You will be able to provide a college education for your student without being punished for the poor college affordability Ohio is suffering. Congratulations!