Rhode Island Monthly Higher Learning 2015 : Page 5

F amilies may be surprised to learn that the cost of college has risen approximately 1,200 percent since 1978, despite an inflation rate of 280 percent over that same time-frame. At many elite colleges and universities, tuition, fees, room, board and books now top $60,000 per year. Here in Rhode Island, in-state students at the University of Rhode Island will pay about $24,000, and Rhode Island College students will pay approximately $20,000 if they choose to live on campus. At local private colleges the price tags are significantly different. Students at Brown University and Rhode Island School of Design are paying just more than $60,000 per year, and Providence College students aren’t far behind at approximately $58,000. Salve Regina and Roger Williams Universities are slightly more affordable at roughly $50,000, and Bryant University falls in the middle at $54,000. What families need to know is that despite these daunting price tags, just 12 percent of private college students and 48 percent of public university students nationally pay the full sticker price. The difference between sticker price and net price is the most important thing for families to under-stand as they consider the affordability of college. Sticker price is the total cost of tuition, room, board and fees posted on a college website. Net price is the final cost after scholarships, grants, work study, loans and other financial aid is applied. Understand-ing the five sources of aid is also critical: colleges and universi-ties, the federal government, state government, private scholarship funds and private loans. tors estimate merit aid, not all do. You should be careful to note how much of your aid comes in the form of money that does not have to be paid back versus loans. Although most colleges use FAFSA or the CSS profile, the application process for college aid varies between schools, so check individual college websites for specifics. FAFSA forms are usually filed after Jan. 1 of senior year in high school, but the CSS profile is usually required within a few weeks of submitting your application. Finally, many colleges offer payment plans which allow you to spread your college costs out over the year. Call the individual financial aid offices at the colleges where you plan to apply to find out more about their offerings. Many families incorrectly assume that their state universities are the only financially viable route for higher education, but students with reasonably good grades can receive generous financial aid at private colleges. For many students, this aid can reduce the cost of a private college to below what you would pay as an in-state student at your local university. There are two basic types of aid that you should be cognizant of as you plan for college: need-based aid and merit aid. Need-based aid is calculated according to your household income and assets, and there are two different formulas used by colleges to determine eligibility: the FAFSA (Free Application for Federal Student Aid) form and the CSS (College Scholarship Service) profile. Merit aid is based on grades, SAT/ACT scores, leadership or special talents like sports or music. Income and assets are irrelevant. However, not all colleges offer merit aid. The Ivy League does not have merit aid, and many highly competitive colleges — like Duke, Bowdoin and Williams — offer little or no merit aid. Students will usually receive more merit aid from their backup colleges rather than their stretch schools because colleges often seek higher GPAs and SATs to raise their average entering freshmen stats. While merit aid can be difficult to estimate, some schools publish their average merit award. Several publications, like U.S. News and World Report , have lists of the top schools for merit aid. If your family earnings or assets make you ineligible for need-based aid but you can’t afford to pay full fare, choosing colleges where you are likely to qualify for merit aid is critical. Federal law requires every college in the country to post a net price calculator on its website. By entering data from the previous year’s tax return, the calculator estimates a student’s annual net cost to attend each school after scholarships, loans and other sources of aid. Keep in mind that while some calcula-COLLEGE AND UNIVERSITY AID Uncle Sam offers loans and grants, many of which are based on demonstrated financial need. To apply for a Stafford Loan, Pell Grant or other federal money, you must fill out and submit a FAFSA form, and it’s best to file by February of senior year in high school. (Parents: This means that you may need to do your taxes early if you have a senior.) Stafford Loans are the most common form of federal aid. As the name denotes, the money does have to be paid back, but it is at a favorable interest rate with liberal terms. Dependent students may borrow up to $31,000 over four years. These loans are available to all college students, but whether the loans are subsidized or unsubsidized depends on your need. Pell Grants, which can total up to $5,730 per year, do not have to be repaid and are targeted for students with financial need. Perkins Loans are federally funded but dispersed at the college level and can provide another $5,500 per year based on family income and assets. Recipients of Perkins Loans demonstrating the most need may also get a Federal Supplemental Education Opportunity Grant (FSEOG) of up to $4,000 per year. For students who intend to teach after college, Teach Grants can provide $4,000 per year if you agree to teach in an underserved school district for at least four years after college. The federal government also offers Direct PLUS programs, which allow parents to borrow the cost of attendance less any other aid received. You must have a good credit history to qualify, and the loans presently have an interest rate of 7.21 percent. Parents and students can also access a variety of college loans through Sallie Mae, local and national banks. Those considering military service will want to consider ROTC scholarships and stipends. Funding varies depending on the branch of service you select (Army, Marine, Navy or Air Force), and you need to ensure that your chosen college has an ROTC program or access to one. Scholarships can total up to $180,000 for four years, and stipends typically range from $250 to $500 per month. Keep in mind that there is a commitment to serve after graduation, and the minimum is two years full-time followed by four years in the Reserves. FEDERAL GRANTS AND LOANS Perhaps the biggest news in college financial aid this year was the advent of a creative venture available online at Raise.me, which has coined the new phrase “micro scholarships.” A startup backed by the Bill and Melinda Gates Foundation, the University of Pennsylvania and Facebook, it allows any United States high school student in grades nine through twelve to earn z PAYING continued on page 6 RHODE ISL AND MONTHLY I HIGHER LE ARNING I 2015 MICRO SCHOLARSHIPS 5

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