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November 2nd, 2009
07:26 AM ET

College costs reach record high... But there is hope

Editor's Note: Ben Kaplan is the publisher of CityofCollegeDreams.org and the creator of Scholarship Super Camp. The online camp provides personal guidance from Ben–via a series of video workshops, group Q&A chats, and essay help sessions–that shows you how to maximize financial aid, win college scholarships, and save on student loans.

By Ben Kaplan
Publisher of CityofCollegeDreams.org

These days, many students and parents are asking a simple question: How can college costs continue to rise even when families like ours face lower incomes and less job security?

Unfortunately, the answer isn't an easy one: The combination of state funding declines, plummeting college endowment valuations, and record student enrollments has put upward pressure on tuition prices, even in the midst of economic recession.

The result: According to a recent report by the College Board, tuition and fees at 4-year private colleges rose 4.4% to $26,273 per year, while tuition and fees at 4-year public colleges rose 6% to $7,020 per year (in-state students) and $18,548 (out-of-state students).

In turn, it's no surprise that many more students are applying for need-based financial aid. According to the National Association of Student Financial Aid Administrators (NASFAA), 9 out of 10 colleges have seen an increase in the number of financial aid applications they received this year-with two-thirds experiencing a dramatic increase of 10 percent or more.

And that's not all: More students than ever are appealing their initial financial aid awards. In fact, nearly two-thirds of colleges have seen the number of "professional judgment" appeals increase by at least 10 percent.

The bottom line is this: Financial aid officers are busier. Budgets are stretched thin. As a result, it's even more important than in past years to get your financial aid forms in early and meet a college's priority financial aid deadlines.

That's why I tell my Scholarship Super Camp participants that this November and December is the critical time to do your strategic financial aid planning and positioning.

When you start preparing early to meet upcoming priority deadlines (which usually occur in February and early March), colleges can often afford to be more generous and flexible with their aid packages. This means more grants and fewer student loans. Sounds good, right?

Additionally, many schools have created "adverse economic circumstances funds" to help those families hit especially hard by the recession. Michigan State University, for instance, created a $500,000 fund to help such families. In-state rival University of Michigan at Dearborn set aside $300,000 for emergency aid. And schools like James Madison University are raising money from alumni for additional emergency funds.

But if you don't send in your financial aid forms early, such grants could be used up even if your family might have otherwise qualified. Plus, when you submit your financial aid forms earlier, this frees up more time to focus on winning merit-based scholarships.

So please don't delay. great financial aid resources are available, but those who act sooner rather than later will receive the greatest help. Even in the midst of tough economic times, there is always hope for those willing to take action. The time to start is now!


Filed under: Education
soundoff (15 Responses)
  1. West Coast

    Enjoyed the interview. Please bring the guest back to the specifics of how to "do" all of these scholarships and financial aid steps. Very important for us concerned parents out there. Glad I couldn't sleep and woke up early to watch this one.

    November 3, 2009 at 6:11 pm |
  2. Parent of Three

    I found this interview very helpful. Thank you CNN. No one at our school is really talking about financial aid yet and no one told me that I should start that planning now. I thought that you had to wait until april or may to apply for financial aid.

    So we will get the ball rolling with our eldest! I think it was a real blessing to see this interview. It really helped us "get a clue." Thank you Kiran Chetry for doing this important story.

    November 3, 2009 at 5:54 pm |
  3. Sam

    I thought this was a really helpful segment (and article) and I think some people commenting above are missing the main point.

    The statistics cited about college costs were from a recently released report by the College Board. You can read their press release here:

    http://www.collegeboard.com/press/releases/208962.html

    These statistics are AVERAGES... every college will, of course, charge a different amount and some private college are much more expensive than other ones. The main point is that college costs continue to rise, even during a recession.

    Also, the reason surveys compute college costs using tuition and fee data is not because its the only expense families face... its because its a more direct comparison of tuition trends in the country. Even if a person wasn't in school, they would still, for instance, have some living expenses to pay.

    So I think it's important that people heed the main point of the segment and the article.... that it's really important this year to get your financial aid forms in early. People who do that will be much, much better off.

    November 3, 2009 at 5:35 pm |
  4. Financial Aid Administrator

    Forget the video and the links to his websites. The information regarding early application is sound advice. It is true that educational funds are available in limited supply – so submitting your FAFSA as early as possible in January is your best bet. If your family's income has changed from the previous year's tax return you should share this with your school's financial aid office. They may be able to adjust your FAFSA data to more accurately portray the current financial picture through a process called professional judgment. A college education is affordable for everyone, but it's also important to remember that not everyone can afford their first choice. Be realistic about what your family can afford and have very frank conversations about finances with the school's financial aid office. We are here to help.

    November 3, 2009 at 4:31 pm |
  5. Northeast here

    This article is a joke, the prices they quote, are you kidding me. I have a college freshman this year, because my husband and I are middle income there are no grants, etc. Freshman only get 2750 a semester (5500) for the year from stafford loans that have to be repaid at like a 6% interest rate the rest then has to be a parent plus loan at like an 8% rate. It is a state school, she is in state and for tuition, all the fees, room, food, etc it is more that 18000 a year. She go 1 small scholarship all the rest has to be loans how is she going to be able to repay all that – it is just crazy. At least if you are going to print an article that is just a commercial for someone get the numbers correct, private schools in our area go from 40,000 to 50,000 per year. Its just a joke

    November 3, 2009 at 9:24 am |
  6. Amanda

    When people do talk about the cost of college, room and board are included in the cost. Maybe New York State colleges were only $18,000 for tution. I live in Pa and both Pitt and Penn State are around that much and that includes room and board. I went to a state school and it was around $14,000 a year. I think largely it just depends on where a child wants to go and how much their parents are willing to pay if any at all. They can't include the fees (unless by fees you mean meal plans). Other than that, the fees of books can not be included because not all students buy from the bookstore and it depends on what major you are too. For example nursing majors spend more money on books than would a criminal justice major. The extra spending a student does at a college is entirely based upon what they want to spend their money on. Also, the average price of a private college is $25,000-$35,000 depending on where you go. Also if you are interested in a certain college or university all you have to do is go to that college's or universities website.

    November 2, 2009 at 7:13 pm |
  7. cost of education?

    I am a recent graduate from a Texas public university, and one of the main reasons for graduating on within four years (a lot of summer school) was because of the rising cost of a college education. I also would like to note that I completely agree with Louise, you can not just say tuition and fees. A college education is so much more than just that. You have living expenses (depending on what city/town can be expensive), food, organization activities, and BOOKS (the biggest rip off in the world...NOTE future students go to amazon/ebay for your books!!!!), car, and entertainment. I did have a job all through college, which I believe most students should. Now, like many recent graduates I have student loans, and it wil be stressful to pay them back in this bad economy. As I look back on college finances, the one thing I had a problem with was scholarships after you are already in school. I think this is a major problem because of all the help out there to go to college, but not as much to help you stay there financially. I would also recommend this to future students, the better your grades are the more money you will recieve. Also, the faster you do FASFA, you will recieve more of state grant money, that is already at a limited amount. I also think it is ridiculous to go to a priviate university, when you can go to a public university that is just as good, if not better. My next major issue with financing education is that I would love to further my education to get an MBA, but it is like paying four plus years of undergraduate in two years.

    November 2, 2009 at 4:34 pm |
  8. in the South

    If you follow the links, this article seems to be merely an add for Ben Kaplan services, to get parents to pay for scholarship advice. This is an advertorial masquerading as editorial content. Shame on CNN.

    November 2, 2009 at 4:33 pm |
  9. in the South

    We are finding that private 4-year liberal arts colleges cost $40,000 per year, plus books

    November 2, 2009 at 4:27 pm |
  10. Liz Foster

    That was a ton of great information. The idea of going to college seems daunting these days. Its nice to see that if you put some effort into there is a light at the end of the tunnel. More about appealing financial aid please!

    November 2, 2009 at 1:22 pm |
  11. Becki Fairfield

    I'm very disappointed that CNN ran this "commercial" for this so called knowledgeable tuition costs person!!!! He twisted numbers, did not compare apple to apples, and repeated his website at least 6 times.
    Everything you need to know about financial aid is on fafsa.ed.gov and fastweb.com there are no other magic web sites.

    He obfuscated around what his scholarships were based upon. I have my suspicions but will hold my my judgment private. He gave us NO substantial information, I felt CNN wasted my time with this guy. I checked out his site and it is nothing...... again http://www.fafsa.ed.gov and http://www.fastweb.com will do all of what he claims and MORE and won't charge you for it. I sure hope HE paid CNN for the airtime, just like commercials do.

    November 2, 2009 at 10:04 am |
  12. Steven McCarthy

    Thank you CNN and Ben Kaplan for this very informative segment this morning. What a great topic. With two kids in college, I was furiously taking notes the entire segment. Thanks for providing some college tuition hope for us families out there.

    November 2, 2009 at 9:15 am |
  13. Allana Strickland

    I am a high school student& during the report the gentleman mention sites to check for grants & assistance for financial aide. If possible can I get a list of those sites. Thanks. Looking forward to gain college entrance in 2014.

    November 2, 2009 at 9:06 am |
  14. Rufus Runnels

    I found the Kaplan interview misleading and disingenuous. With three to educate, we find ourselves with nearly $100,000 of parent plus loans and each child with $12000 to $20000 of student loans. That is with over $65000 of scholarship money our daughters received. And we have one more year for our youngest to go. Our children have attended state universities and one private school.

    Mr. Kaplan's suggestion that the amount of college tuition is reduced because of some kind of maximum out of pocket expense is foreign to me. If you are in the highest 10% of academic achievers, in an economically disadvantaged group, or have learning disabilities college is much more affordable. If you are a part of the vast average student, it is moving rapidly to unaffordable. My wife and I have decided to accept debt for college because our parents did the same for us. Unfortunately, college costs have increased well beyond inflation. The school I attended and graduated from in 1974 cost me about $2400 per year in tuition and fees. Today annual tuition and fees are closer to $30000 per year at that school. According to several online inflation calculators that $2400 should be about $11000 today. Instead it is nearly three times that much. By graduation 2011, my wife and I will be paying over $2000 per month in college loan payments. This will continue for about 25 years. I am 57. You do the math. I am not certain our children will be able to afford to extend the privilege of college to our grandchildren. The middle class is being squeezed out of the opportunity to send their children to the college of their choice. There is your story.

    Instead of addressing the real story, you allowed Mr. Kaplan a free advertisement for his services. He will do very well as a result. The people who purchase his services will not unless they are already in groups I mentioned above. Shallow reporting of this sort is not what CNN was about in the beginning. This report this morning (which I watched "accidentally") reminds me why I rarely watch CNN anymore.

    November 2, 2009 at 9:02 am |
  15. Louise

    Hi,
    I must correct you on your information regarding college costs!
    The average price of a New York State college/university was about $18,000 for the '08/'09 school year. When talking about the cost of colleges you can't just give people the cost of tuition and fees (unless you can commute from home every day), you must include room and board PLUS, you know there are always extras.
    The average private college out there is about $34,000-$35,000 per year with a number around the $50,000 mark and I'm not talking about Ivy League colleges/universities.

    November 2, 2009 at 8:55 am |