Are you getting prepped for college? But are you ready to face the university financing problem? Nowadays there seems to a buzz about the vanishing middle class and this is depicted clearly when our kids go to college and we have to pay for it.
Apparently most parents now feel that they are too rich for taking financial aid and too poor for paying for a college degree. Numerous families throughout the nation are facing this problem right now. This scenario has been created as a result of several issues like rising tuition fees, complicated financial aid calculations, amounts of financial grant available, stricter regulations which increase the financial burden on the parents for paying college fees, even if they cannot afford it. This gap is eventually affecting our students and their scope for pursuing higher education.
Are You Too Poor For Paying For College?
I am sure all parents become excited and happy when their kids get accepted to a prestigious college and pursue their academic dreams. But when the parents realise how much money they will have to shell out for the degree, the excitement quickly turns into concern. Did it happen to you? Richard Morais faced a similar situation when his daughter got accepted to the Johns Hopkins University. Although the family was ecstatic initially, but when the admissions packet arrived with the financial aid award and the cost of attendance, the mood at the Morais house changed. Pursuing a degree at Johns Hopkins University would cost the family $54,470, which included room and board, in just 1 year.
As the total financial aid package was merely $6,000, Morais would need to $48,470, or his daughter would need to take student loans. What can a normal family do? Paying $48,000 for college is undoubtedly a real challenge for any household. If his daughter took a student loan, then she would be burdened with almost $200,000 debt after her graduation, which is unacceptable. This is why most families in the US feel too poor to pay for college.
Are You Too Rich For Taking Financial Aid?
Conversely, several families feel they are too rich to accept financial grant. Generally your financial aid depends on the Free Application For Federal Student Aid (FAFSA), which is eventually utilised to determine the Expected Family Contribution. This is mainly what the government thinks about how much your family will be able to pay for college education.
This helps educational institutes to calculate the amount of need-based financial aid that a student requires and should receive. However there is a problem with this calculation and formula; it does not consider the family expenses, requirement for saving for your retirement, and the costs of education for other children.
Hence, even though the government may believe that you can afford to pay thousands of dollars for your child’s college education, in reality your family may not be able to pay that much. This is why most families in the US are thought to be too wealthy for financial assistance.
What Can Parents Do?
If you wish to avoid getting trapped in this scenario, then you need to take some steps immediately. You can start by saving for college in an education savings account. The FAFSA calculations treat these savings amounts differently. Hence you can get higher need-based financial aid.
Moreover, you can also apply for financial assistance, which are not need-based, like grants and scholarships. Thus by beginning early and by applying for various grants, you can accumulate a good fund for college.
What do you think about college fees and financial aids? Are you too poor for college? Or are you too rich for financial support? Let us now. Share your thoughts by commenting below.
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