What’s the real cost of college? Families urged to apply for federal aid

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INDIANAPOLIS, Ind. (Jan. 30, 2014)

Now is the time for families and college students to apply for federal student aid. The deadline for the Free Application for Federal Student Aid (FAFSA) is March 10th, but some universities ask for it sooner.

As that deadline approaches, the Indiana Youth Institute is gathering information about some of the common financial myths and the true costs of going to college.

“I think the most important thing is that people should not necessarily look at the sticker price for college and say ‘I can’t afford that.’ The most important thing families can do when planning, especially right now is to fill out the FAFSA,” said Glenn Augustine with the Indiana Youth Institute.

He said the sticker price of college has increased in the past 30 years, about 230 percent for public universities and about 150 percent for private universities. However, through aid, tax credits, and planning, those costs can be significantly reduced.

“For upper and middle class families, about 25 to 33 percent of the sticker price at public schools is actually covered by aid,” said Augustine.

He said it’s still important to borrow wisely. The average Indiana college graduate comes out with less debt than the national average.

“A lot of it is through FAFSA financial aid. I do have some student loans, pretty much because I just can’t work enough to pay all my bills, so I had to take out a student loan for some extra money,” said Caitlin Sylvester, an art student at IUPUI.

Sylvester took her general education courses at Ivy Tech Community College to save money before transferring to IUPUI.  

“In today’s economy, you need some kind of education after high school. That may be a work force certificate or a credential, that may mean military training, an associate’s degree, so two years. There are programs that would help somebody after they get that high school diploma to be employable in a good paying job in Indiana, but they need that education after high school,” Augustine said.

Research shows households headed by college graduates have a median income of just more than $100,000 compared to households headed by someone with only a high school diploma where the median income is roughly half of that.

Indiana also gives tax credits to families who save for higher education through a 529 College Savings Plan.

Augustine also recommended the website triptocollege.org where families can search for scholarship options.

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