Affording college means planning ahead for rising tuition
By Andrew LaCombe, 18 and Megan Maas, 14.

With tuition costs climbing higher and higher each year, many kids are faced with financial challenges when it comes to affording college.

The College Board is a not-for-profit association of more than 5,400 educational institutions. They assist students with college searches, and also oversee Advanced Placement courses and administer the SAT. They determined that for the 2007-08 school year, the average cost of a public, four-year college is $6,185. That number has increased by nearly seven percent in the last year. For private institutions, tuition averages at $23,712--over six percent more than 2006-07.

To offset the constantly increasing costs students either need good fortune or good planning. Obviously, the easiest way a family can prepare is by saving money. Stu Bradley, a financial advisor for Edward Jones Investments in Marquette, said that is the most important aspect of planning for college.

“ If you start young when the child is first born you don’t have to put an awful lot of money away each month; it’s a matter of being consistent and starting,” he said. “There are a lot of different things that you can save into, but the consistency and starting young is the most important thing.”

Money can be saved in a variety of ways.

“ My mom has accounts set up for me and both of my siblings,” said eighteen-year-old Lauren Rovin of Marquette. “And she uses UPromise.com when she shops on-line. It’s a place on-line where there are certain shops where they’ll give you money back for college, like a percentage of what you pay for clothes.”

Eighteen-year-old Joe Amiri of Marquette will also receive help from his family.

“ I was blessed with very generous grandparents who are helping me pay for college,” he said. “And also my parents are helping pay for it, too.”
Amiri has been saving money on his own, as well.

“ I’ve been working at The Vierling (a restaurant in downtown Marquette) since last June,” he said. “Every part of the money gained from my paychecks I’ve been putting aside.”

Amiri and Rovin are both seniors at Marquette Senior High School. They are fortunate that their families saved money for tuition. Bradley said that every family has a different situation.

“ If a person is upper income where the families either have quite a few assets or mom and dad make quite a bit of money, then it’s pretty well assured that they’re going to have to pay the full amount of a child’s college or the kid is going to pay it,” he said. “So they would be in one category of type of investing. He added, “The other extreme is people that don’t make a lot of money. If a kid is a reasonably good student, (their family) might even be able to pick up some scholarships and grant money where they’d be better off if they really don’t save for college.”

Rovin, who will attend either the University of Michigan or Lawrence University, and Amiri, who will attend Northern Michigan University, have applied for local scholarships to help offset the cost of college. In fact, according to the College Board, there is $130 billion available nationwide in financial aid.

Financial aid can come from many different places in a variety of forms. The state and federal governments offer grants and loans. Colleges and universities also offer grants, loans, and work-study programs for students with low-income backgrounds. High schools, private organizations, and communities offer many scholarship opportunities as well.

Figures from the NMU Department of Finance and Planning show the cost of one credit hour for a resident undergraduate taking 18 credit hours or more has increased from $172 in 2002-03 to $256 this year. Room and board and other expenses have also risen dramatically. So, NMU is offering more financial aid than they have in the past, said Mike Rotundo, director of financial aid.

“ We are already in the process of trying to build a financial aid package that can help students at different levels of the financial need scope,” he said. “We have larger grants that we can give to (needier) students.”

Rotundo feels the biggest issue with financial aid is timeliness.

“ The students that are filing their financial aid applications now, we’re going to be working with them and they’re going to have information much sooner than students that are delaying their application for financial aid,” he said.

Public universities in Michigan have increased their tuition in recent years to offset steady or declining state revenues and higher education funding. But, the State of Michigan is making scholarship money available for students who chose to stay in the state for post-secondary school. In 2006, Governor Jennifer Granholm and lawmakers enacted the Michigan Promise Scholarship, which provides up to $4,000 for high school graduates to put toward their education. For students to get the money, they must pass the Michigan Merit Exam during their junior year.

Amiri believes that the MME program is a good one.

“ It gave some money to the students who were able to pass the test, and also encouraged a lot of kids to stay in-state for college,” he said.

Eighteen-year-old Greg Daniels, also a senior at MSHS, will attend NMU in the fall. He thinks that if tuition is lowered, it could help bring in more out-of-state students.

“ I think that some schools in the state should lower their tuition rates to outside people from other states to encourage them to come in here as long as they keep the in-state tuition low as well,” he said.

Dan Bonsall, a guidance counselor at MSHS, said that the school works to provide scholarships and notify students of opportunities to reduce their tuition costs.

“ Every senior should apply for the ‘Local Scholarships’ which are offered only to seniors at MSHS,” he said. “Also, the guidance office at MSHS compiles a list of all (national) scholarships mailed to us, summarized on one single handout. All seniors should pick up a copy of this scholarship list.”

Rotundo emphasized that grades truly matter.

“ When a student is applying for admission to Northern we are looking to see if they’re eligible for any of our admissions scholarships,” he said. “The higher their ACT and SAT scores, the standardized tests, and the higher their high school GPA, the more money that we could potentially give them in a scholarship.”

There are many other ways to invest for college costs. Financial advisors, such as Bradley, can assist families with these methods. Bradley gave an example of prepaid tuition plans, such as the Michigan Education Trust.

“ States have come up with prepaid tuition,” Bradley said. “Michigan doesn’t offer it every year, but they’ll say that you can put aside… like right now your grandparent or parent can say, ‘I’m going to put $4,000 away, and that will pay for one semester of college for one child when he or she goes to school.’ And you can go to private schools and not just state-supported schools.”

According to Bradley, the cost of college has risen so dramatically over the last twenty-five years that it is rising faster than the cost of living.

“ If the cost of living has (increased an) average of about three percent a year, I think colleges average between six and seven percent a year, and that’s a huge difference in the long run,” he said. “You really have to be diligent in your savings, or be very wealthy.”

But, Rotundo believes that sacrifices made now to afford college pay off in the long run.

“ I feel like students need to look strongly at continuing your education after high school into post-secondary education,” he said. “The flip side is the cost of not going to school.”

A 2007 study by the College Board said that people with at least a bachelor’s degree earn over sixty percent more than those with only a high school diploma. Over a lifetime, that accounts for an $800,000 difference.