Paying for College: The Greenes' Guide to Financing Higher Education

by Howard R. Greene, Matthew W. Greene

Overview

In the last 20 years, tuition has increased by a factor of more than 200 percent, which is 3 times the increase in earned income of the average family. It takes from 25 to 30 percent of a family's yearly after tax earnings to pay for a single child's college education.

Utilizing their access to college counseling, admissions, and financial aid professionals at colleges and universities across the country, this father and son team have developed a program to make paying for college manageable. They enlighten, motivate, and encourage students and their parents to follow a set of 10 principles designed to help families get a handle on saving and financing a college education. Their mission is to reassure and to help families of every income level and at every stage of preparation to plan a strategy for paying for college.

Product Details

ISBN-13:	9781466881457
Publisher:	St. Martin's Publishing Group
Publication date:	09/16/2014
Sold by:	Macmillan
Format:	eBook
Pages:	240
File size:	2 MB

About the Author

Howard R. Greene, M.A., M.Ed., a former admissions officer at Princeton, is the founder and president of Howard Greene and Associates. A graduate of Dartmouth College, with master's degrees from Harvard and NYU, he has counseled thousands of students coauthored numerous books, and cohosted two PBS programs on college planning.



Matthew W. Greene, Ph.D., a graduate of Dartmouth College, holds his Ph.D. from the University of Colorado at Boulder. He is the coauthor of the Greene's Guides to Educational Planning series and cohost of Ten Steps to College with the Greenes and Paying for College with the Greenes on PBS.

Howard R. Greene, M.A., M.Ed., a former admissions officer at Princeton, is the founder and president of Howard Greene and Associates. A graduate of Dartmouth College, with master’s degrees from Harvard and NYU, he has counseled thousands of students coauthored numerous books, and cohosted two PBS programs on college planning.
Matthew W. Greene, Ph.D., a graduate of Dartmouth College, holds his Ph.D. from the University of Colorado at Boulder. He is the coauthor of the Greene’s Guides to Educational Planning series and cohost of Ten Steps to College with the Greenes and Paying for College with the Greenes on PBS.

Read an Excerpt

Paying for College

The Greene's Guide to Financing Higher Education

---

By Howard R. Greene, Matthew W. Greene

St. Martin's Press

Copyright © 2004 Howard R. Greene and Matthew W. Greene
All rights reserved.
ISBN: 978-1-4668-8145-7

---

CHAPTER 1

Principle One:

College is well worth the cost and sacrifices you might have to make. It is a valuable investment in your future.

College graduates can expect to earn significantly more during their lives than people with only a high school degree. This holds true for all types of institutions, from public to private, small to large, selective to less competitive. A college degree has become a prerequisite for most of the better-paying, more secure, more interesting, and more open-ended jobs in this increasingly knowledge- and information-based economy. In addition, a college degree is absolutely required for entrance to graduate or professional degree programs, a necessary step for higher-paying and secure professions like law, medicine, and academia. Graduate degrees in nursing, education, social work, business, and other areas can be the keys to advancement in those fields. In the United States today, a college degree makes a great deal of economic sense.

A college education also represents an opportunity for important personal growth, intellectual development, and learning. A college degree is not just a rubber stamp representing a passport to a better job. For most "traditional" college-bound students, college is a rite of passage involving the first major move away from home, independence from parents, and interaction with new people and ideas. Even for "nontraditional" college students, who are beginning to represent the majority of all students in college, those who may be in their midtwenties or older, married, with children, studying part-time, taking distance learning courses, and/or returning to college after years of absence, a college education involves learning new skills, raising the level of knowledge related to a current or future job, and building the ability to communicate in multiple ways. Whether highly practical and focused on a profession such as teaching, nursing, or accounting or oriented toward a balanced liberal arts curriculum, a college education serves as a milestone for most students, raising their awareness, skills, and knowledge of themselves and others to new levels.

THE FINANCIAL IMPACT OF COLLEGE

According to the U.S. Department of Labor's Bureau of Labor Statistics, those who earn higher educational degrees earn more income and have lower rates of unemployment. Those civilians twenty-five years old and over with only a high school degree or the equivalent faced a 5.3 percent seasonally adjusted unemployment rate in March 2004, compared to 4.7 percent for those with an associate degree or some college education and 2.9 percent for those with a bachelor's degree or higher (www.bls.gov/new.release/empsit.t04.htm). These statistics hold true across genders and ethnic groups, despite continuing disparities between the various groups, as the following table indicates.

According to the Bureau of Labor Statistics, the average four-year college graduate stands to earn almost twice as much per year as a high school graduate. This gap has widened during the last twenty years (www.bls.gov/opub/ted/2003/oct/wk3/art04.htm). What's more, over a person's lifetime, the average earnings of someone with a bachelor's degree exceed those of someone with a high school diploma by a million dollars.

GOING TO COLLEGE, NOT WHERE YOU GO TO COLLEGE, MATTERS MOST

We are often asked whether going to a highly selective or prestigious college makes a difference. Students at different colleges vary in terms of their interests, academic focus, and backgrounds. A campus culture may be more or less competitive, supportive, or diverse. An institution may have more or fewer resources, commuters, courses, or full-time faculty. Of course these variables contribute to differences in educational outcomes for students. A highly selective Ivy League university might have a graduation rate of over 90 percent, compared to 50 to 60 percent in many public colleges. A student can get an excellent education at almost any college or university if he or she is motivated, assertive, and persistent. There are no guarantees associated with going to a highly selective school, just as there are no limitations faced by those doing well at a less selective one.

We encourage you to choose the college or university that fits you best, where you will be able to pursue the programs you want and where you are likely to be most successful. There may be advantages in attending a school with more resources, a better reputation, and stronger programs, but you may also find great options in less expensive public universities or find that starting at a community college works better for you. In terms of future earnings, there is little agreement among researchers as to whether it "pays" to attend an elite college or pursue a private college education. Some argue there is little difference in financial outcomes between those attending more and less selective or prestigious institutions. Others maintain that, given the opportunity, you should attend the most well known or selective institution you can. For a good summary of the arguments, see "Does an Elite College Really Pay?" at http://moneycentral.msn.com/content/CollegeandFamily/Savingforcollege/P36742.asp).

We believe success at any college is better than no college at all. Your fit with a particular college is essential. There is some evidence that what you bring with you to college is as or more important than what the college offers in return. A talented and determined student can do well in almost any college and equally well afterward. Just look at all those major-company CEOs, government officials, and other successful individuals who didn't graduate from "name" schools. It is what you learn from the college experience that matters most, not which college you attend.

JOB SECURITY AND CAREER FLEXIBILITY

Beyond salary, a college education brings more job security and a better ability to switch careers during your lifetime. As you have seen, not only do those with a college degree earn more, but they also experience lower unemployment rates. In periods of economic downturn, a college degree can be a helpful protective factor. If you decide to change careers or lose your job, you are more likely to be qualified and hired for your next job because of your educational background.

If you want to switch careers, you may need to return to school to earn a certificate, a postbaccalaureate degree, or a graduate degree or even just to pursue additional course work. A bachelor's degree is often a prerequisite for such programs. Beyond that, the skills you learn in almost any college program will help you succeed in those additional classes. During college, you will improve your writing, speaking, analytic, and problem-solving skills. You will be better able to communicate and to learn new material on your own. College provides an essential foundation for later learning and qualifies you for most secure careers.

LONG-TERM CAREER DEVELOPMENT

In the course of your lifetime, you may change careers several times or you may stay in one sector of the economy or with one company. To advance, you might not need additional training. In many disciplines or employment areas, additional education may be essential. Those at the highest levels of corporate America tend to have a professional business degree, an MBA. Lawyers have a law degree, doctors a medical degree. None of these professions is accessible without earning a college diploma first. Engineers and architects often pursue master's degrees to specialize and improve their skills. Social workers, artists, dentists, teachers, nurses, accountants, optometrists, pharmacists, information technology specialists, and systems analysts — you name it, successful people in these fields have not only college degrees but also graduate degrees. In planning your long-term career development, a college education is a necessary step but often only a first step.

INTELLECTUAL DEVELOPMENT

Underlying your college education is some balance between "practical" and "theoretical" knowledge. If you pursue a nursing, teacher education, or computer technology college program, it is likely you will lean more toward a practical education that focuses on the key skills you need to learn to do well in your chosen job. If you enter a liberal arts college and major in philosophy or English, more of your education will be theoretical and less applied to any particular real-world issue. In either case, colleges will provide essential training and intellectual development. Computer technicians may not worry too much about existentialism, but they will be trained to diagnose and solve problems, communicate with clients, and educate themselves about new software and hardware. Philosophers may not know how to fix their laptops, but they will learn to frame and solve different issues, for example the ethical dilemmas associated with euthanasia or how to determine if a war is "just."

A college education of any sort is a key learning experience for students that brings their thinking to a higher level and exposes them to new ideas and intellectual challenges. When this is combined with the interaction among students and peers and faculty, an education is valuable to all and well worth the cost.

WHAT DOES COLLEGE COST?

Paying for college is clearly one of the main concerns of families as they consider sending a child to college. According to a recent survey of colleges across the United States, three major areas worried families most: the overall cost of a college education, how to finance that education, and the accumulation of debt from borrowing money to pay for college ("The Top Concerns of Parents," College Bound 18, no. 5 [January 2004]). Another survey, from the Educational Testing Service, suggested that most families consider increased tuition and other college costs as the biggest problem related to colleges, but 96 percent think a college education is a good investment ("Quality, Affordability, and Access: Americans Speak on Higher Education," Educational Testing Service, June 2003).

The truth is that most people overestimate the cost of college. Sometimes our expectations of the cost are dramatically out of sync with reality. We can point to several reasons why, including news coverage of dramatic increases in tuition, mounting student loan debt, and the erosion of the real value of such types of aid as the Pell Grant. The Pell Grant, the main form of federal need-based student assistance, is a grant that does not need to be repaid. Now, the maximum Pell Grant covers a much smaller proportion of the average education bill than it did a generation ago.

The reasons most people overestimate the cost of college are numerous. They don't know the actual price tag at public and private two- and four-year institutions. They don't realize that "the price tag" at most colleges is more like a window sticker at a new car dealership and less like a bill from the heating oil company. The former are negotiable and often heavily discounted right from the start, the other is not. Finally, people are not aware of the amount of need- and non-need-based financial assistance available to most families.

If you find yourself in this category, you are not alone. According to a 2003 report from the National Center for Education Statistics, more than 90 percent of students and parents plan to attend or have their children attend some type of college. Of those with college plans, only 18 percent of high school students surveyed and 30 percent of parents of sixth through twelfth graders had obtained information about college costs. As students reached eleventh and twelfth grade, they and their parents were more likely to begin exploring the cost of college and to feel that they could accurately assess those costs. Those at higher income levels and nonminority families were more likely to report knowledge of college costs. What is most surprising is that even among the group of parents and students who reported getting information about college costs, most respondents overestimated the cost of one year of tuition at all types of institutions, especially public colleges and universities. More than half of these students and parents estimated the annual cost of attending an in-state public four-year college or university at $5,000 or more. The actual annual average in-state tuition cost at these schools in 1998–99 was $3,247, with most students paying between $2,000 and $4,000. Parents of students planning to attend private four-year institutions were within $200 in assessing costs, which averaged $14,709. Students' average estimate was $16,539. Overall, 37 percent of students and 29 percent of their parents could not accurately estimate (within 25 percent) yearly tuition at the type of institution they or their children planned to attend ("Getting Ready to Pay for College," U.S. Department of Education, September 2003).

These figures may seem logical. Families closer to paying for college have gathered more information about the price tag. However, these data reveal some disturbing trends with troubling implications. The families who may need the most help paying for college, who may be the most easily discouraged from even trying to attend college, and who may be most in need of a college education to help them get ahead are the least likely to know the actual cost of paying for college. Those in lower income groups, the less well educated, and/or members of minority groups already underrepresented in colleges are even less informed about college costs and how to pay for them. They are also less likely to be willing to take out loans to pay for college. As a result, many children from these families may be more likely to concede that college is unattainable early in their academic careers. Such a decision could well lower achievement and persistence through high school, because, well, what's the point? At the same time, not understanding college costs is just the tip of the iceberg. If the price tag is unclear, how can you begin to be aware of the many programs available to help cover the seemingly insurmountable costs?

As stated earlier, most students in the United States attend public colleges and universities, about 80 percent overall with two-thirds of those enrolled in four-year institutions. Would more people consider private institutions if they knew the costs were not so high and that a lot of aid was available? Though a minority of those planning to attend four-year private institutions may understand the facts, they represent a very small minority of those planning to attend college in general. Imagine the miscalculations of those not planning to attend private institutions because they are even more dramatically overestimating the costs there!

For the record, here are the figures from the College Board on average tuition and fees. Some argue that even these figures overestimate college costs. If you're interested in that argument, see David Glenn, "Economists Fault Tuition Information, Saying Reports Overstate Increases and What Students Pay," Chronicle of Higher Education, January 6, 2004, n.p.

It is hard to predict what college will cost five or ten or fifteen years from now, because prices are changing, in many cases rather dramatically. These increases are much higher than the rate of inflation (the Consumer Price Index rose at 2.3 percent in 2003):

• Tuition at four-year public universities increased in the 2003–4 academic year at the highest rate in thirty years, by 14.1 percent over the previous year.

• Tuition at public two-year colleges increased by 13.8 percent.

• Tuition at private four-year colleges rose by 6 percent ("Trends in College Pricing 2003," The College Board).

If a public two-year college that costs $2,000 raises its tuition and fees by 20 percent, that adds $400 to the price tag. A public four-year university that raises its $5,000 tuition and fees by 15 percent adds $750 to a student's burden. When a private four-year college that costs $25,000 raises its tuition and fees by a modest 4 percent, the bill increases by $1,000.

Lower-income families have been most hurt by increases in college costs. Their incomes have risen the least in recent years, and support from institutions and the government has not kept pace in helping them cover those costs.

(Continues...)

---

Excerpted from Paying for College by Howard R. Greene, Matthew W. Greene. Copyright © 2004 Howard R. Greene and Matthew W. Greene. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

---

Table of Contents

Contents

Title Page,
Copyright Notice,
Acknowledgments,
Introduction,
Principle One: College is well worth the cost and sacrifices you might have to make. It is a valuable investment in your future.,
Principle Two: Begin saving for college as early as possible, but it's never too late. Savings are key to all other financial assistance opportunities.,
Principle Three: Good students will have good choices. Good grades in strong academic courses will create many opportunities for admission and for need-based and merit-based aid.,
Principle Four: Do not let the costs of individual colleges limit your options. A majority of students do not pay the full tuition costs, and many of the most expensive colleges have the most generous financial aid programs.,
Principle Five: Apply for financial aid, if you will need it, at the same time you apply for admission. Financial need will not affect your odds of acceptance in the greatest number of cases. Work with college financial aid officers as a helpful source of information and guidance. They are there to help you manage the costs of college and navigate the complexities of securing aid.,
Principle Six: Make strategic use of the many information sources on need-based and merit-based scholarships available to you on the Internet, in the public library and bookstores, and from colleges. Be certain to meet with your high school guidance counselor and use the resources in your school's college counseling center.,
Principle Seven: Applying to a broad-based group of colleges will create more opportunities to attend a college that suits you and one that you can afford.,
Principle Eight: Consider your state's public university system. Look for tuition bargains, special honors programs, and transfer possibilities within the public system.,
Principle Nine: Consider beginning a two-step college education by enrolling in an inexpensive two-year program that will lead to transfer to a four-year college. In addition to your achieving considerable savings for the first two years, many opportunities for admission and financial aid may be available for the next two years of your education.,
Principle Ten: Understand and carefully evaluate your aid package from each college. Comparisons of the different awards can be significant in terms of outright grant money versus loans. Consider the long-term implications of taking on loans. Compare other possible conditions of each aid package: Is the scholarship renewable for four years? Is there a work component? Do you need to maintain a certain grade point average?,
Conclusion,
Paying for College Calendar,
Glossary of Terms,
Also by Howard R. Greene, M.A., M.Ed., and Matthew W. Greene, Ph.D.,
Copyright,