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4 Most Important Considerations in Analyzing College Costs

Kerry Traylor, of College Strategy Experts, walks us through what to consider when analyzing today's high cost of college.

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  • male robot johnny style avatar for user lydia santiago
    why is it that hard to graduate within 4 years
    (2 votes)
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    • leaf green style avatar for user Jon Dough
      Matt B made some great points. I also found people have the smarts but they just are lazy for school (ie: writing papers, reading, turning in homework), prefer to party, have bigger priorities (ie: kids and bills), say they're only going to take off a year but don't, transfer schools and don't get all their credits to go, or find out they'd rather do something else the "rest of their lives" so they're still in school but don't graduate.
      (3 votes)
  • leafers ultimate style avatar for user stpatrick749
    What is need-based aid?
    (3 votes)
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    • piceratops ultimate style avatar for user Hecretary Bird
      Need-based aid is the money a college gives you if it thinks that you'll have hardships paying for college by yourself. This is calculated based on your income bracket, money saved for college, and some other things. Need-based aid was put in place so that in theory everyone could have a chance to go to any college, provided they show the aptitude.
      (2 votes)
  • male robot donald style avatar for user Callum Barr
    I found the video very helpful, but as a Canadian resident looking to find in-country schooling, I was looking for a website comparable to collegedata.com that would list the same data for Canadian PSI's.
    (2 votes)
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  • aqualine seedling style avatar for user George Ian Guy Marsden
    What help is out there for international students?
    (2 votes)
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  • leafers ultimate style avatar for user Benjamin
    What's a merit-based gift?
    (2 votes)
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  • mr pants purple style avatar for user marynia harris
    What is a merit based gift?
    (2 votes)
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  • blobby green style avatar for user jfontana7261
    Why is it very hard to graduate collage in 4 years and how can we make it easier.
    (2 votes)
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    • spunky sam blue style avatar for user CZ
      Because the body of knowledge gets bigger all the time, but professors don't like to cut out older material. So you are dealing with more information that needs to be disseminated. Summer classes, AP, CLEP courses. You can test out of classes, but it is hard. I would not recommend that route. Also most people come in deficient at the level of classes to actually start course work. College math for engineering for example usually starts at Calculus 1. Nothing before that counts toward your degree completion. So try to test in to Calculus 1 if you can in your first semester.
      (2 votes)
  • piceratops ultimate style avatar for user mandomerlie
    The statistic that Kerry Traylor gave that most students don't finish college in 4 years seems surprising. But, if you want to be a lawyer or a doctor, usually will take longer. Right?
    (2 votes)
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    • spunky sam blue style avatar for user CZ
      Law and phaysician training in the United State require extra time. A law degree (JD) is usually two years and an physicians degree (MD) is usually two years. However, depending on your specialty it can be three or four years. Very highly specialized medical paths require many more years. For example, I have heard of a surgeon that did one specific surgery. He placed a screen in the heart to break up clots (keeping them from traveling from the legs to the brain) he required 16 years of schooling. Four to get into medical school. Four in medical school to become a doctor/surgeon. Four more to become a heart surgeon, and finally four more to learn the specific surgery listed above. In general, specialty surgeons require a minimum of 10 years of schooling. Keep that in mind if you want to go that route.

      Hope that helps.
      (2 votes)
  • winston default style avatar for user Diarasis Rodriguez
    What is it like to attend a virtual university?
    (2 votes)
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  • leaf green style avatar for user Jon Dough
    If you don't graduate within 4 years, why would you keep paying room and boarding? Don't most students live in dorms for only the first year or two?
    (1 vote)
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    • blobby green style avatar for user Marc Schermer
      No matter what, a person needs shelter and food. The term "room and board" does not just mean housing and food provided by the university. Off-campus housing (such as an apartment rental) and meals are still an expense and must be paid for throughout the entirety of a student's enrollment in school. Therefore, for all timeframes beyond the traditional four years that it should take to earn an undergraduate degree, the student continues to have "overhead costs" while at the same time, he or she is delaying the opportunity to be gainfully employed in the workforce -- in essence, a double whammy.
      (2 votes)

Video transcript

- Once you know the school's full cost of attendance at each institution to which you're applying, that might include tuition, room and board, student fees, transportation, books, how then do you compare costs of each institution side by side? You would think that you would just look at the sticker price and that would make it easy to compare but unfortunately, it's not as easy as that. One of the things that you really need to look at first is how long does it take to graduate from each institution on your list? Unfortunately, as college costs have risen precipitously over the last two or three decades, schools have done an increasingly poor job at getting students out of school within that four traditional time period that it would take to graduate. In fact, nationally, the statistic is that in public universities and colleges, 68% of students fail to graduate within four years and 44% of students fail to graduate within six years, okay? So, looking at that, you have to say to yourself, is there an additional cost associated with not finishing college within four years? And of course that cost can be very large. There's two components to that cost. Cost number one is you or your parents are going to have to pay an extra year cost of attendance, so extra tuition, room and board, et cetera, but there's an additional cost and this is the cost that students and families don't think about when they're deciding about which school they're going to attend and that cost is the opportunity cost of not being in the workforce while you're in school an additional year. So, if we assume that an average starting salary for a college graduate these days is about $50,000 dollars, not only are you losing potentially 25, up to $65,000 dollars of additional associated tuition room and board and fees but you are also losing a year in the workforce where you could be earing about $50,000 dollars. So, all together, the cost of an additional year in school can be up to $100,000 dollars or more. So, the next thing you need to really look at when analyzing college costs is what is the average percentage of demonstrated financial need that each school on your list meets? So, you would think that schools would meet any costs above your expected family contribution and unfortunately, that's not the case. In fact, there are only about 60 to 65 schools in the country that meet your entire demonstrated financial need, so that means at most schools, you will end up paying not only your expected family contribution but you will end up paying your unmet need as well. So, how do you find the average percentage of need met statistic for each school? Fortunately, there's a wonderful little website called collegedata.com, it's a free website, and on that website you can search for each school on your list and then go to the Money Matters tab for each school and you will find there the average percentage of need met for each institution. Okay, so the next thing you need to look at which can also be found on collegedata.com is the form this need based assistance is going to come in for each school on your list, right? So, is it gonna come in the form of grants and scholarships which is essentially free money that you don't have to pay back or is it going to come in the form of what we call self-help aid which is loans, it could be student loans, it could be parent loans, that you have to pay back at interest, right? So, let's look at University of Colorado at Boulder which is a large public institution. And as I scroll down here, I can look, I wanna look at the profile of 2014, 15 financial aid. And you'll see down under freshman, you'll see the average percentage of need met there which was the first question we asked is about 81% and then beneath that, we have the average award and the average award at Boulder is almost $16,000 dollars per year and then under that, we can look at what form that award money comes in and you can see the first category is the need based gift that is grants and scholarships, free money, and you can see that about 77.8% of Boulder Freshmen received a need based gift in the average of an amount of about $11,000 dollars. Then you can also look at what the average need based self-help amount is for entering freshmen at Boulder. That self-help aid was received by 88.5% of aid recipients for an average amount of about $5,813 dollars. Beneath that, you can see what merit-based aid is given to the average freshmen and only about 4.2% of the entering freshmen at Boulder are receiving any kind of merit-based gift and the average amount there listed is $9,676 dollars. So, one of the things you really wanna do when you look at this college data website is to compare the data for freshmen with the data for all undergraduates because what you'll find occasionally is a school that I call a bait and switch school where they're gonna give more money away to freshmen than they do to the rest of their undergraduates in order to attract the freshmen to the school and then once you're there, they give you less aid. So, what you really wanna use College Data for is to figure out the percentage of aid that's coming in the form of free money versus the percentage that is going to come in the form of mostly loans from each of the schools on your list. In addition to need based gifts or need based self-help amounts, you may be eligible for what is called merit aid or on College Data it's called non-need based aid. And this is money usually in the form of grants or scholarships that is given away to students that a specific college or university wants to attract based on their academic or extracurricular merit. If you are ineligible for need-based aid, merit aid or non-need based aid is the only form of assistance you may receive. If you're eligible for need-based aid, you could receive a combination of need-based aid and non-need based aid. Now, most schools will give some merit away to students, some merit money away to students that they want to attract. However, there are about 25 schools in the country including all the Ivy leagues, Stanford, Swarthmore, Williams, Amherst, et cetera, who don't give any merit aid away at all to any of their freshmen students. So, in these cases, if you do not qualify for need-based aid, you will be paying the full price tag at the schools whereas at other schools, you might be receiving some merit-based assistance to get you to come there which you can kind of think of as a tuition discount. Okay, to sum up, there are four things you need to look at when comparing the costs of college education institution by institution. Firstly, what is the average time that it takes to graduate from each school on your list? Secondly, what is the average percentage of need that each school on your list meets? Thirdly, what is the form that that assistance is going to come in? Is it going to come in the form of loans that you have to pay back? Or is it gonna come in the form of free money? And fourthly, what kinds of merit aid or non-need based aid is each institution going to give you?