This was originally published on Monday, May 7, 2018, in the Pacific Daily News. Click here to subscribe to the PDN.
Q: Next year my daughter will be starting high school. Her goal is to attend college off-island directly after graduating. My husband and I have not started saving for her college and I am worried that we may not be able to afford her educational dreams. I don’t want her to miss out or change her goals because we didn’t plan it financially.
A: It is no secret that the cost of living has increased and continues to increase yearly. You can see this in the cost of food, housing, and the price of fuel. Unfortunately, the cost of education has risen as well. According to a study done by CollegeBoard.orghere are some staggering facts about college trends in 2017:
- Averaged published out-of-state tuition and fees at public four-year institutions rose by $800 (3.2%), from $24,820 in 2016-2017 to $25,620 in 2017-2018.
- Average published tuition and fees at private nonprofit four-year institutions rose by $1,220 (3.6%), from $33,520 in 2016 – 2017 to $34,720 in 2017 – 2018.
- More than 70% of full-time students receive grant aid to help them pay for college.
Identify aspects in types of colleges
There are significant financial decisions between the types of colleges. There are certain characteristics that should be considered before deciding which college to attend. Identify the goals and consider cost, class size, culture, and environment.
- 2-year college – these are typically technical or community colleges and provide skills in a specific job in the workforce such as a nurse or mechanic. Costs are usually lower than a 4-year institution and allow students to achieve an associate’s degree. Credits can be transferred to a 4-year institution.
- 4-year public school – these institutions typically offer a range of majors and student organizations. The student body is typically larger with larger class sizes. Tuition ranges depending on whether it is in-state or out-of-state tuition. Some out-of-state colleges offer tuition reciprocity (a discount on tuition) to residents of certain states.
- 4-year private school – tuition at these colleges tend to be higher but students can benefit with smaller class sizes and privately-funded facilities. Many 4-year private schools are religious based.
Know the difference before spending
Though both nonprofit and for-profit colleges can offer an equal level of education, there are some things you need to keep in mind. Their focus of education slightly differs as their goals for success are measured differently as well. This doesn’t necessarily mean that one is better than the other. Know the difference before spending money. Another aspect to look at is if the institution is accredited and if the accreditation is national or regional. Use due diligence when choosing a school and the quality of the education offered.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.