Teaching Tip: Talking about paying for college generally makes for a spirited class discussion. This can be done without any reading assignments, or you can assign a reading before class. There are a number of suggested readings mentioned below.
In a recent survey titled “College Funding” conducted by the Institute for College Access & Success, when asked about paying for college, young adults age 18-34 responded “college is both more important than ever and also harder to afford.” Over three-quarters of the respondents (76%) said that “college has become more difficult to afford over the past five years”, and just under three-quarters of those young adults (73%) felt that “college graduates have more student debt than they can manage.”
Not sure what college is really going to cost? Remember Principle 1: Knowledge is the Best Protection? – it certainly fits here. Fortunately, there is some potential help – there are now “cost of college” calculators that are available on the college and university websites. These are commonly referred to as “net price calculators”. They were mandated by the Higher Education Opportunity Act of 2008 and are now the law of the land. These calculators focus on the net price that you pay for college after receiving scholarships or need-based grants. In fact, MarketPlace.org took a look at them in the podcast “New Tools To Calculate The Real Cost Of College.” It is important to note that it is the “net-price” that you should focus on when trying to determine how much a college will cost. Why is that? It’s because about two-thirds of all college students receive grants that cut the cost of college. So, does this new tool come with a guarantee that it will give you all the answers you need? Unfortunately, as with most things in the personal finance arena, you’ve got to be wary as Chris Farrell points out in his Marketplace Makin’ Money column, “Net Price Calculators: Be Wary.”
Assignment or Discussion Questions:
- Find the net price calculator for your college and use it to determine how much college should cost you (you’ll have to look on your college website). Was it easy to use?
- What concerns are raised in the Chris Farrell column “Net Price Calculators: Be Wary?”
- Check out the “Goucher College Net Price Calculator.” Fill it out, just put in numbers and dates that seem reasonable (the purpose is not to come up with a net price for Goucher) – when you were entering data into the net price calculator, were you surprised at any of the items that go into the calculator’s calculations?
- When you applied to college did you have a pretty good idea of what the net price would be? Have you been surprised by the cost of college? How have you tried to control costs? Be prepared to share your response with your class.