If it seems to you that college just gets more expensive every year, it’s not your imagination. In a 15-state region that includes the state where we live the tuition fees for residents at four-year public schools increased an average of 3.1% in the 2013-2014 school year. However, that’s just chump change when compared to the 50.5% increase that’s occurred since the 2008-2009 academic year and the incredible 123.4% increase since 2003-2004.
And that’s for in-state tuition.
If you or your child is attending an out-of-state college, we don’t have to explain the phrase “those ridiculous out-of-state tuition fees.” You know only too well what this means.
Here are a few examples. Where we live the tuition for an out-of-state student is $33,333 or roughly three times what a resident pays. And it’s just as bad in other states. In-state tuition at Arizona State University is $10,156 while out-of-state residents pay $24,502. If you live in California you would pay $12,872 to attend the University of California-Berkeley but if not, your tuition would be $35,750. The University of Washington charges in-state residents $12,394 while out-of-state residents pay $33,513 … and these numbers are just for one year!
Becoming a resident
Of course, you could beat this by becoming a resident of the state where you are going to school. Unfortunately this is not easy. You will have to prove that you are a permanent resident of the state and not just going to school there. You will need to show that you are financially independent to a degree. This means you may have to turn over statements from your bank, your parents’ tax returns and your W-2 forms. You may also need to register to vote, have an in-state driver’s license and show that you’re paying income taxes to that state. In fact, where we live the law requires that students that are less than 23 years old and doesn’t have a parent living here must prove emancipation or total residential and financial independence for one year to be eligible for in-state tuition.
A few options for relief
There are a few ways to get relief from these onerous costs. One of them is a tuition reciprocity program like the Western Undergraduate Exchange (WUE). This can save a lot of money for residents of certain states. The agreements made under this Exchange allow students to attend schools in other states at either in-state or highly discounted rates, and save thousands of dollars in tuitions bills. Over 150 two-year and four-year schools in 15 western states participate in this program. The way this works is that every member school offers eligible students from all other member states a discount on tuition. This often means charging students no more than 150% of the in-state rate. In the academic year 2013-2014 the savings that could be gotten from this program ranged from $925 to $13,400 per student and averaged $6150. However, be aware that each participating school has its own rules for eligibility. There are ones that automatically give students the WUE rate assuming they meet certain academic thresholds. However, many schools restrict the number of WUE awards each academic year by giving the rate only to a specific number of students or those that major in specific categories. In case you’re wondering which states belong to the WUE they are, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the Commonwealth of the Northern Mariana Islands.
If you don’t live in any of the states listed above, there is another alternative called In-state Angels. It guarantees that you will either get in-state tuition or you pay the company nothing. The way this works is that In-state Angels develops a customized action plan designed around your specific circumstances and then assigns you a personal In-state Angel. This person will work with you every step of the way to achieve in-state residency. He or she understands the process of getting in-state tuition and will help with a plan that requires you to do as little as possible. The company works for free until it is successful in getting you in-state tuition and then charges a percentage of the money it’s saved you each semester until you graduate. Because In-state Angels makes no money unless it can get you in-state tuition its motivation is to get this for you as quickly as possible. In-state Angels claims that undergraduates have saved up to $18,000 per year net depending on the college even after you subtract its fees.
Is this legal?
Given the fact that it’s illegal to make false claims about residency, which can actually be a crime, this raises the question of legality – is what In-state Angels does legal? According to the company, what it does is 100% legal and we guess you can’t get more legal than that.
Not for everyone
While the savings promised by In-state Angels makes the program sound very tempting, it’s clearly not for everyone. You will have to first submit all your information, You and your parents will have the opportunity to ask questions and get answers. You will ultimately receive a quote, review it and share it with your parents. You would then talk to In-state Angels to determine whether or not you would be a good candidate. If so, you’ll be required to sign the contract and then schedule a time to come into the In-state Angels’ office to get started.
In the event you don’t live in one of the states that belongs to the Western Undergraduate Exchange and if you find that you can’t take advantage of the In-state Angels program, what can you do? You’ll probably end up having to borrow a lot of money. There are two ways to do this — through public and private loans. The best deal by far is to get a public loan or a loan from the Department of Education (ED). It offers William D. Ford Direct Loans that are loans where the money comes directly from the federal government. You can learn more about these loans on the Department of Education’s website, http://www.direct.ed.gov/. The way you apply for one is by filling out the Free Application for Federal Student Aid (FAFSA). As a general rule, Direct Loans are usually part of a larger “award package,” which will come from the college or colleges where you applied for admission. This package may also contain other types of financial aid.
The two types
If you are offered a Direct Loan there are two major types – subsidized and unsubsidized. Subsidized loans are based on need. In other words, if you can demonstrate that you have a financial need as determined by federal regulations, you would not be required to pay any interest while in school at least half-time. If you can’t demonstrate a financial need, your loan would be unsubsidized meaning that you would be required to pay interest during all periods you are in school including even periods of grace or deferment.
There are also PLUS loans. These are unsubsidized loans that would be taken out by your parents and that can also be used by graduate/professional students. These loans are designed to help pay educational expenses up to the cost of attending the school minus all other financial aid. Since the loans are unsubsidized, your parents would be required to pay interest during all periods that you are in school.
The best loan is no loan at all
Of course, the best type of student loan is no loan at all. If you can graduate from college owing nothing you’ll be well ahead of most people. In fact, according to recent statistics about 12 million students borrow money each year to help cover their college costs. As a result they graduate owing an average of more than $28,000 in student loans. So, how could you graduate debt free? The answer will be a combination of what’s in your financial aid package and what your parents will contribute. You will need to add up the aid offered by your college such as a scholarship, work-study grant or some other type of aid and then subtract this from the cost of attending that school. If your parents can make up the difference, you could actually graduate debt free. You should also check with your state to see what grants and scholarships it has available. If one of your parents belongs to a social organization such as the Elks, IOOF or Moose be sure to see if it has a scholarship program for the children of its members. And, finally, many companies have scholarship programs for the children of their employees.