Important Choices

Now is the time for many anxious high school seniors when the letters of acceptance, rejection, or wait list status begin arriving.  After all the work of developing your college list, after all the work of completing and submitting applications, now comes the work of deciding which, among the options open to you, is the best.

Ideally, during the search and application process, students identified a number of schools that would be a good fit personally, socially, and academically, and students have either received, or will soon receive, acceptance letters to several of these excellent schools.  Which is the best choice?  There are several factors to consider - majors offered, location, support services, student life, cost.....  These are perhaps not terribly helpful, however, as these are the same factors considered when creating the college list in the first place.  The good news is, the reason you applied to these schools is because they are all a great fit, so you should have a good experience whatever you choose.  Once you've made your choice, don't waste any time wondering if one of the others would have been better; instead, focus your time and energy on connecting with and getting excited about the school you have decided to attend.

Before you make that decision, however, try to visit the schools you are considering; at least your top 2 or 3 choices, if you haven't already.  Nothing can take the place of a personal experience on campus, talking with students, faculty, and staff, and getting a sense of the personality of the school.  Some colleges can arrange for you to sit in on a class during your visit.  Before you go, research campus clubs and activities you may be interested in, then try to connect with someone from those clubs while on campus.

Some students will make long lists of pros and cons for each choice, and try to boil it down to a purely rational choice.  While this seems like a reasonable approach, the truth is that big decisions in our lives rarely come down to pure reason.  After having a chance to visit the schools, pay attention to your feelings and emotions in addition to the objective facts.  As Ruth Chang states in her excellent TED talk "How to Make Hard Choices", hard choices are hard specifically because neither option is inherently better than the other.  We ourselves create the reasons that makes one choice better than the other - for us.  Don't get caught up in issues of prestige, or how others are going to feel about your choice of college - this is about you and your future, not what other people think you should do.

So after you've created your long list of pros and cons, put the list aside for a moment, close your eyes, and reflect on how you feel.  Imagine how each of the schools you are considering will help you become the person you want to be.  And when you're ready to make the leap, jump enthusiastically onto the path you've chosen, and don't look back.

Is College Worth It?

There has been much concern in the media in recent years about college costs and student debt, and rightfully so.  The question then keeps popping up, is it worth going to college at all?  Some writers point to mounting student debt and argue that young people are delaying life events like getting married, starting a family, buying a house, etc.  According to data from the Bureau of Labor Statistics from 2014, adults with a bachelor's degree earn on average $22,516 more per year than those with a high school diploma.  College graduates are also less likely to be unemployed - the unemployment rate for adults with a bachelor's degree was 3.5%, compared with 6% for those who stopped their education after high school.  I would argue that living in poverty and battling unemployment and underemployment while scraping to make ends meet would also make it difficult to start a family or buy a house.

We've all heard the stories about college educated barristas and retail clerks, and horror stories about students enduring 4, 5, or 6 years of college, collecting large student debt loads, and then not finding a job after college.  While it was indeed a tough time for college graduates during the height of the recent recession, what these stories miss is that it was a tough time for everyone.  Unemployment and underemployment rates peaked in 2010, with an underemployment rate for those with bachelor's degrees hovering around 6.2%.  At this time, the underemployment rate for those with a high school diploma was 12.9%. It turns out the stories of unemployed college graduates are also a bit exaggerated.  While it is certainly true that some college graduates end up working in jobs that don't require a college diploma, the underemployment rate has dropped sharply since the end of the recession, and those with a bachelor's degree have benefitted far more from the recovery that high school graduates.  According to a recent study, even among the underemployed college graduates (those working in a field that does not require a college degree), most are employed in the higher-paid categories of non-college occupations, while those without a college degree are more likely to end up working as low-paid physical laborers or in low-skill, low-paid service occupations. Furthermore, many college graduates who initially work in non-college occupations move into higher-paying jobs that do require a college degree within a few years of graduation. For more details on the study, see this excellent article from Inside Higher Ed: Challenging the Barrista Myth.

The benefits of a college education are not only economic.  Developmentally, the late teens and early twenties is a time of great personal growth potential.  The exposure to new ideas and experiences, a widening of your perspective on your own and other cultures, development in analytical and critical thinking skills - these benefits cannot be quantified in an economic sense. A college degree also opens opportunities to a much wider array of career options.

So, the question remains, is college worth it?  With an average increase of income of $22,516 per year, it seems to me that a $200 student loan payment is not as much of a burden as it might seem. Even after a year's worth of payments, the net gain is still over $20,000 per year.  Of course, students should be savvy about financing college and explore all possibilities for avoiding loans altogether, including maximizing grants and scholarships, creative financing options, and thorough research on college costs to choose an affordable program in the first place, but current economic research indicates that the answer is a resounding YES!  There are also other factors in the modern economy that make a college degree worth more now than ever before.  Job growth in the economy is now almost exclusively in fields that require some training after high school.  Income for college graduates is rebounding well in the wake of the economic recession, but wages for non-college jobs are not rising at the same rate.  Thus, the income gap between high school and college graduates is getting even bigger.

A final rant on this recurring question of "Is college worth it?" - I've noticed that many of those publishing articles or making statements that college may not be worth the investment have themselves benefitted greatly from their own college education.  These aren't "I never went to college and I'm doing great" testimonials; rather they are "I went to college and am thriving, but you maybe don't need to" statements.  I, for one, would be wary of such advice.

Is it important as a nation to take action to control rapidly rising college costs?  Of course.  Should you try to minimize the amount of student debt you take on?  Certainly.  Even if you have to take out some loans and make some sacrifices, is college worth the investment?  Absolutely.

What Does College Really Cost?

What does college cost?  It seems like a simple question, but the answer is a complicated mixture of a variety of factors including, of course, which college you choose to go to, but also your family's financial situation, your academic record, where you live, and any interests, skills or talents you may have. Let's address these factors one at a time:

The college you choose has a big impact on the cost you will pay, but not necessarily for the reasons you might think.  Of course, the cost of tuition, as well as room and board and other expenses will play a part, but what will make an even bigger difference in the price you actually pay is the availability and the policies determining the distribution of grants and scholarships.  For example, although the University of California has a published tuition cost about twice that of the California State University system, low and middle income students on average pay about the same (or sometimes even a lower) net price at UC schools.  This is presumably because there is more financial aid available in the form of grants and scholarships, as well as the policies of state aid in California, which pay either the full tuition (Cal Grant) or a percentage of the tuition (California Middle Class Scholarship, Blue and Gold Program); these grants are therefore worth more at the higher-tuition UC schools than they are at CSU. Similarly, small, private liberal arts schools often have more aid available and can meet a larger portion of a student's financial need, thus resulting in a lower cost to the family, even though the published tuition is much higher than that of a local public university. Finally, some colleges and universities award most of their aid using need-based criteria (your financial situation), and others award a large chunk of their aid using merit-based criteria (grades and test scores).  More on this later.

Another factor to consider is the total amount of time it will take to get a degree.  If you end up at a lower-priced, but overcrowded college or university, you may not get the proper advising or access to classes to finish your degree in 4 years.  An extra year or two can make a big difference financially, so when considering costs, be sure to look at average time to graduation and consider the total cost of attendance, not just the annual cost.

Perhaps the biggest question in determining the actual cost of college is what sort of financial aid you will get.  This, of course, depends on your family's financial situation, and is a complicated, confusing, and sometimes frustrating issue to tackle.  When you complete the Free Application for Federal Student Aid (FAFSA) - which you should do as soon as possible! - you will get an estimate of your Expected Family Contribution, or EFC.  This is NOT the amount you will have to pay for college; it is the amount the formula used in the application predicts you should be expected to contribute.  The actual price you pay may be more or less than this, depending on all the other factors discussed in this post.  Your EFC determines how much need-based financial aid you are eligible for:

Cost of attendance - EFC = Financial Need

 You can receive need-based aid up to this amount.  Obviously, the lower your EFC, the more aid you will be eligible for at any given institution.  If your EFC is low, it may be worthwhile to research the average financial need met at the schools you are considering.  For example, if your EFC is 0, a school with a cost of attendance of $25,000 that meets 50% of demonstrated student need will cost you $12,500 in the end, while a school with a cost of attendance of $33,000 that meets 80% of student need will cost $6,600 after all financial aid is applied.

Your academic record may also play a significant role in your college costs, particularly if you are looking at colleges that offer a large amount of merit-based aid.  For example, at Fort Lewis College in Durango, Colorado, a 3.5 GPA along with a 28 ACT (or 1250 SAT) score is worth $6,000 for in-state students, $10,000 for out-of-state students.  That's right, good grades and test scores actually have monetary value at many schools.  If you're in the right range, a 0.1 increase in your GPA and/or a 1 point increase in ACT scores (or 100 points in SAT score) could be worth $2,000 in merit aid.  Many other schools also have merit aid and automatic scholarships based on high academic achievement; this information can usually be found on the scholarship page of the school website. Obviously, good grades will also be useful in private scholarship applications.

Where you live affects how much you pay for college for obvious reasons (in-state vs. out-of-state tuition, different costs for public universities in different states), but can also affect your cost when you go out of state.  There are a number of regional exchange programs that offer reduced tuition (significantly less that the out of state cost) for students from nearby states.  These include the Western Undergraduate Exchange, the Southern Regional Exchange,  the Midwest Student Exchange, and the New England Regional Student Program.

Finally, your interests, skills and talents may affect the cost of your education through more specific scholarship opportunities, such as athletic or artistic scholarships. A word of caution here - there is not as much money available in athletic scholarships as many people think, and competition for these scholarships can be fierce.  Even if you aren't at the level to get an athletic scholarship from your college of choice, be sure to research private scholarships - there are many athletic-related scholarships from private parties that are not necessarily connected with individual schools.  You should also search college websites for departmental scholarships in the field you want to study.  For example, a number of scholarships are available through the engineering department at Montana State University, but you have to look for them, they won't automatically consider you for these scholarships when you apply to the school.  If you are interested in a military career after college, all major branches of the military offer ROTC scholarships.  These will generally pay your tuition, books, and a small monthly stipend while you are in school in exchange for participation in the ROTC program and a service commitment of 4-5 years upon graduation.

Unfortunately, there is no way to know the exact price tag of a given college until you have been accepted and received your financial aid offer letter, usually sometime in the spring of your senior year. There are, however, several resources to help you figure out what, ultimately, your cost will be.  Each college has a net price calculator on its website.  These vary in accuracy, but should give you a good estimate of what you can expect to pay (these only take into account federal, state, and institutional aid, you can lower your price more with a thorough scholarship search and application process).  The following sites also provide some guidance in looking for affordable college options:

College Scorecard: A new tool designed by the US Department of Education, compares schools based on average cost, graduation rate, and earnings after college.

College Affordability Guide: After analyzing over 10 million data points related to over 5,000 colleges, this group published a guide ranking colleges based on affordability (lowest cost for low- and middle- income students as well as flexibility in learning and credits) and positive outcomes (based on graduation rates and loan default rates).

Determining cost and affordability of college options is a complicated process.  The point here is not to make assumptions about the cost of college based on the published tuition and cost of attendance; a little further research using the college's net price calculator or the resources listed above will help you figure out how much that school will actually cost YOU, which in general will be somewhat lower than the sticker price.

Eleventh Hour Applications and Rolling Admissions

You may have missed the November 30 deadline for California Public Universities (both UC and CSU), and the December deadlines for many colleges, but you have not yet run out of options.  Many colleges have deadlines in January or February, and some have rolling admissions, which means there is no set application deadline.  There may, however, be limited spots at these rolling admission schools, so it's better to get your application in sooner than later.

For a long (though not necessarily comprehensive) list of schools still accepting applications, visit the  College Simply website Application Deadlines page.  Be sure to check deadlines with individual colleges as well.

Niche.com has a list of schools with rolling admissions, which includes some excellent schools like Montana State University and the State University of New York College of Environmental Science and Forestry.  US News and World Report also has a list of 11 highly rated colleges that have rolling admissions deadlines.

Think you can't afford these out of state or private schools?  Be aware that many schools offer both need-based and merit-based financial aid, and private schools often have more aid available than public universities.  By law, each university is required to have a net price calculator on their website, which should provide an estimate of what it would actually cost YOU to go there. For low and middle income students, this is generally significantly less than the published cost of attendance.  Just search the website for "net price calculator".

Also be sure to take advantage of any regional tuition exchange programs, including the Western Undergraduate Exchange for Western States, the New England Regional Student Program, the Midwest Student Exchange Program, and the Southern States Academic Common Market.  Details vary between programs, but most offer students from qualifying states reduced tuition at participating institutions. Generally, instead of paying out of state tuition, the student pays 150% of the in-state tuition cost.  Depending on which state you are coming from and which state you are going to, this may actually be less than in-state tuition in your home state.

Remember, once you've submitted your application, watch your mail and email for notifications of follow-up instructions and take care of submitting any additional information needed in a timely manner.  Also be sure to complete your Free Application for Federal Student Aid (FAFSA) as soon as possible after January 1st, regardless of whether you have already completed your college applications or not!

Weighing your Options - Net Price and Financial Considerations

In California, where I live and work, there are 3 college systems: the California Community Colleges (with approximately 113 colleges), the California State University system with 23 campuses, and the 10-campus University of California system.  Tuition prices vary widely between these systems, with the community colleges providing a bargain at $1104 per year, the CSU system offering a moderate price of $7022, and the UC system topping out at approximately $13,896 per year in tuition and fees.  Conventional wisdom in California is that the UC system is much more expensive than CSU, and the numbers above would seem to support this idea.

However, the prices quoted above are just for tuition and fees.  Including estimates for room and board, books, travel, etc. the total cost of attendance for a student paying full price is as follows:

Community College                    $14,604
California State University          $23,478
University of California               $31,816

Once again, it would seem that UC is by far the most expensive, community colleges the least expensive, with the CSU system comfortably nestled in the middle.  A major caveat here is that the prices above are for a student paying the full price; that is, a student with no financial aid whatsoever.

However, most low and middle income students do not pay the full price of attendance.  Both the state of California and the federal government have grants available for low income students, and the state of California and the public universities offer grant assistance middle income students as well.  The net price is the amount the family will have to pay either from savings or student loans; this is the actual price paid after all grants and scholarships are applied towards the cost of attendance.  When you factor in grants and other forms of gift aid (financial aid that does not need to be paid back), the ranking of the systems by net price changes considerably.  Consider the following net costs for a student in a family of 3, only one student in college, for the following family income levels:

                                                  < $30,000             $50,000            $100,000

Community College                    $8,411                $11,524            $13,689
California State University        $10,620                $16,726            $23,478
University of California               $8,500                $11,130            $25,544

The above net cost values are for a California resident living on campus, dependent for financial aid purposes (under 24, not married or active duty military, student has no dependents).

Take a few minutes to carefully study the above table.  Does this surprise you?  When I calculated out the net cost, I was certainly surprised.  This turns conventional wisdom upside down.  For a student with a family income less than $30,000, the "expensive" UC system is within $100 of the cost of a community college.  And for a middle income student with a family income of $50,000, the net price for UC is actually less than for a community college!  I experimented with several types of family composition and income, and in every case, up to a family income of $90,000, the UC system came out with a lower net price than CSU.  This is presumably because the UC system has more grant aid available for students who qualify.

Of course, one benefit to attending the local community college is the ability to live at home, and this will certainly result in cost savings.  There are also other factors that are important in choosing a college; most community colleges and many of the CSU campuses are smaller and may feel more personal than a large UC school.  Certain schools may have a particular major or program of interest, such as the Oceanography program at Humboldt State, or the fantastic culinary arts program at American River College in Sacramento.  Admissions at UC campuses can also be fiercely competitive, and some students may not be able to go directly from high school into the UC system.  The point here is not that everyone should go into the University of California.  Many people, however, assume that the UC system is out of reach financially, and this is a huge misconception.  After all, it is the net price, not the sticker price, that matters in the end.

Net price calculators can be found on each school's website. This is true for both public and private colleges and universities.  Although I did not include the data above, my calculations for several out of state and private schools showed a net price in between the UC and CSU values.  Before ruling out schools based on how much you think they will cost, spend some time playing with the net price calculators - you may be surprised at how the different schools stack up financially.

Community Colleges

There are about 1,123 community colleges in the United States, with a total enrollment of approximately 12.4 million students. Community colleges generally have lower costs, and there is currently a movement to make community colleges free for 2 years if students meet certain requirements.  In California, community colleges are essentially free for low - income students, who qualify for a waiver of the registration fees (the Board of Governors, of BOG waiver).  Community colleges in Oregon offer in-state tuition to California residents, and many community colleges participate in regional networks that offer tuition breaks to students from neighboring states.

Community colleges can be a great access point for students who are worried about college costs.  If you decide to go this route, however, there are a few things to keep in mind.

Good planning is essential for success

Graduation rates for community colleges tend to be much lower than those for 4-year colleges.  There are many factors that play into this, but two major factors are planning/counseling and the commitment of students going into a community college.  Before you start, know what your goal is.  Do you want to transfer?  Look into guarantee transfer programs that will keep you on the right track, get you through to transfer more quickly, and guarantee admission into a university.  Are you looking for an AA or certificate?  Meet with a counselor early and often to make sure you are taking the right classes.

Different schools have different policies on student advising; while mandatory counseling is built into the program at many universities, at a community college you will most likely have to take the initiative.

Not all community colleges are the same

Different community colleges have different strengths and weaknesses.  It's an obvious point, but one often overlooked by students.  If you're interested in culinary arts, American River College in Sacramento may be your best choice.  If you're interested in welding, Butte College has a great program.  Recording Arts Technology?  Try Los Medanos college.

Part of the lower completion rates at community college may have to do with the fact that students don't pay attention to finding a good fit to the same extent they do with universities.  Of course, one of the financial advantages of community colleges is that they are ubiquitous, and if you go to the local community college you can live at home and save money.  But if the local community college doesn't have the program you want, you may be wasting your time.  This can lead to discouragement and cause students to quit.  So to increase your chances of success, make sure the college has the program you want.  College Board has a great search tool to help you find the college that best meets your needs and interests.

Understand Transfer Requirements

In California, if you take any college classes (at a community college or elsewhere) after graduating high school, you will generally have to complete the full 2-year lower division requirements before transferring to a UC or CSU school.  Some students think they'll just go to the local community college for a year, then transfer.  If you're planning to transfer to a California Public University, understand the commitment before you enroll in a community college.

For more information

To find out more about community colleges, visit the American Association of Community Colleges website, or your state community college network website.  For California, this is http://www.cccco.edu/.

Financial Aid, Scholarships, and College Cost

Recently, I sat with a senior poised on the verge of going off to college.  She has been accepted to her top choice college, has completed the Free Application for Federal Student Aid (FAFSA), and is from a family with very low income.  She was reviewing the financial aid she had received so far and lamenting the fact that there was no way she could cover the difference between the federal and state aid she had received and the total cost of attendance at this university. Luckily, what she can see now in terms of federal and state grants is not the whole picture, and we were able to create a strategy to meet her college costs.

The problem with financial aid, and what makes the process so complicated and stressful, is that you can't see the full picture right away.  After submitting the FAFSA, you should get an estimate on the federal Pell Grant you may qualify for, as well as any state grant money, but you can't see what the specific college will offer you until you get the award letter in the spring.

In addition, most undergraduate students with financial need will qualify for up to $5500 in student loans - $2500 subsidized (which means they don't accrue any interest while you're in school) and $3000 unsubsidized (you don't have to start paying them back until after you graduate, but they will accrue interest during this time).  These loans, as well as the approximately $2000 in work study funds, may also not show up in your offer until you get the financial aid award letters from specific colleges in the spring.

The other problem, and unfortunate reality, is that college costs have risen faster than federal and state grants for education, and even for the most academically qualified students with the highest financial need, there is likely to be a gap of some sort between the aid offered and the cost of attendance.

So the bad news is, this process is confusing and stressful. The good news is, when the offer letters come, there will probably be additional aid available that will help you pay your college costs.  The other good news is that there is a lot you can do to improve your ability to pay for college.

So what's a student to do?  Below are some tips to help put yourself in the best possible position:

• Complete the FAFSA (www.fafsa.ed.gov) as soon as possible after January 1 your senior year.  Be sure to complete it before the deadline for state aid (March 2 for California). You don't need to wait until your taxes are done; you can use estimated values for income and go back and revise the numbers after you've completed your taxes.
• Check out the financial aid website for the colleges you are applying to and make sure you know the deadlines for scholarship applications, and APPLY before those deadlines.  Be careful, these deadlines may be earlier than the actual college application deadline.
• Spend some time on scholarship searches.  I'm amazed at how many students don't follow through on this.  I'll hear "that's too much work", and I'm thinking "It's $2000!!  It's worth a little work!" Yes, it takes time and effort, but if you spend 10 hours on scholarship applications and receive a scholarship for $2000, you've essentially just made $200 per hour. One of my favorite scholarship search sites is www.petersons.com.
• Apply to at least 4 colleges or universities.  Each school will offer a different financial aid package, and some will be better than others.  Applying to a variety of schools will increase the likelihood you'll get a financial aid offer that will work for you.
• Don't be afraid of loans if you need them to pay for school.  Obviously, you want to be prudent and minimize your student debt, but the average college graduate (with a bachelor's degree) will earn, on average about $1 million more than the average high school graduate.  Think of it as an investment in your future.  You can also look into income based repayment plans to ease the pain of repayment. (Disclaimer: I am not a financial advisor and am not qualified to give financial advice.  Please see your CPA or other financial advisor for financial advice related to your specific situation).

Finally, I'd like to end with this great infographic on myths about financial aid: 8 Myths About Financial Aid.