One of the reasons I wrote Beating the College Debt Trap is that it seemed to me that millions of Americans don’t know how the whole paying for college thing works. The system is intimidating, confusing, and complicated, so they stay clear of it altogether.
A July 2015 study from the Urban Institute confirms my suspicions. As the U.S. News & World Report summarized: “A new study details how college is surprisingly affordable for the lowest income Americans. Yet fewer than half of them enroll in college, and 12 percent of those who do enroll fail to apply for financial aid.” Here’s more from the U.S. News & World Report write-up:
Full-time students from the lowest family-income quartile (family incomes under $30,000) who were enrolled in public two-year or four-year colleges in their own state received enough grant aid, on average, to cover their tuition and fees during the 2011-12 school year, and have money left over to help cover books and living expenses, according the report. These students, on average, received more than $9,700 for a four-year public university in their state, leaving them with more than $2,200 for books and living expenses. Grant aid includes money from federal and state governments, colleges and universities, employers, other private sources and from estimated federal tax credits and deductions.
For families with slightly higher family income, up to $40,000, grant aid is usually still generous enough to cover tuition and fees at many public institutions. Over 90 percent of those families received an average of more than $11,000 in grant aid from federal, state and institutional sources in 2011–12, according to a 2013 study by the National Center for Education Statistics, cited by the Urban Institute report.
In another financial aid calculation cited in the report, grant aid covered the entire tuition at public four-year institutions for 44 percent of students from families with incomes below $50,000. Another 35 percent paid less than $2,000 in tuition after grant aid. At public two-year colleges, 66 percent of these low-income students had no net tuition, and another 32 percent paid less than $2,000.
Yet, more than half of the nation’s lowest-income students aren’t going to college. Only 46 percent of low-income students (from the bottom 20 percent of family incomes) who recently finished high school were enrolled in college in 2013, according to the most recent data from the National Center for Education Statistics.
Read the whole thing. I discussed this theme in this article as well as my new book, Beating the College Debt Trap. The good news is that students today can get the training they need to launch a career without going broke in the process. Graduation on solid financial footing is possible. But it will require knowing how the system works, intentionality, creativity, and delayed gratification.