My daughter is off to college in a few weeks and the bill for the first semester has arrived. After the smelling salts kicked in and I regained consciousness I found out a few things that I wanted to share with my friends. We’ve been paying for the kids to go to private schools and I’d (wrongly) assumed that paying college tuition would work the same way.
My first surprise was a happy surprise. Maybe not just happy but joyous. I might have danced a jig. Private secular schools in Los Angeles (I’m finding that some but not all of the parochial schools do not do this) have a finance charge as well as requiring tuition insurance. When I combined the finance charges and tuition insurance for one local school it was an 18% increase in cost over the course of a year. The sad part of this is that a lot of families who pay for private educations can just barely afford it and they are the ones who end up paying the most.
In any event, that first bill came and it wasn’t for the entire year. It was for the first semester! Who knew? Also guess what the finance charge is if you’re planning to pay monthly? $50. That’s right fifty dollars. Not all Universities are the same so it’s going to require research at each school.
It appears that finance charges and tuition insurance are not a given as they are in K-12 education.
Then I found out there are other ways that the rich stay rich and decided to go on the hunt for an expert to tell me more about it. Leah Ingram has written a book about how to pay for college. Here’s something else I didn’t know. You can prepay all four years at some schools, hedging your bets against the 2-3% increase you can expect at private institutions. I asked Leah about this she told me that in the state of Florida you can prepay four years of tuition and housing for less than what one year of college at a Florida state university costs today.
She went on to say that some colleges have allowed freshman to “lock in” their tuition prices for all four years so that if tuition goes up for the next incoming class, it won’t go up for you.
Leah said, “That being said I wondered if colleges did actually offer these prepayment options outside of state plans and they DO. I found prepayment options at both Harvard and Dartmouth, so I guess that is a way for the rich to get richer and not pay for tuition increases that the middle class have no way of avoiding.”
It seems like many of the older private schools may end up being more affordable than a state school. I was sharing some of what I saw on Naviance with a community college student. He is preparing for a transfer and the UC schools would probably cost him more than USC because he’s the first generation to go to college. I relayed this information to Leah and asked what else would shock me about funds available?
What you’ve stumbled upon is a big misconception among so many parents. Everyone is led to believe that a state school is cheaper, and when talking apples-to-apples tuition, it is. However, there are two things that can weigh in parents’ favor with private schools. One, you get financial aid based on cost of attendance (COA) and expected family contribution (EFC). While your EFC doesn’t change depending on where your kid goes to school, the COA definitely does. So an EFC that nets you zero financial aid at a state school could net you significant financial aid at a private college–because the COA is significantly more. The second thing weighing in your favor is that if you do qualify for financial aid, private colleges are more likely to have more money set aside for grants and scholarships. And actually third, a private college looking to boost its student profile is more likely to throw money at a smart student who stands above their “average” student. This is usually in the form of merit aid, not need-based aid.
Leah’s book The Complete Guide to Paying for College: Save Money, Cut Costs, and Get More for Your Education Dollar comes out in September and if you have a high school sophomore or junior you’re coming up on a busy couple of years. I highly recommend preordering it now.
Also published on Medium.