As Tuition Increases, College Scholarships Are More Important Than Ever

The rising costs of college tuition at both public and private New Jersey schools has been getting a lot of attention recently within the media. This blog has mentioned the importance of scholarships before, but Rachel Higgins’ article, which is printed below, takes a more involved look at the options (and provides a lot of links for more information). Rachel is a staff writer for http://www.AccreditedOnlineColleges.org, a website that explores the various online options available to today’s college students. Many online schools, she says, have much lower base tuitions but usually still accept -- and may even offer -- scholarships, too. And if you are a parent like me, who has a child getting ready for college in the very near future, this article may be of some help to you.

As Tuition Increases, College Scholarships Are More Important Than Ever

As most New Jersey families with high school or college aged children are well aware, a university education is exponentially more expensive today—not to mention more competitive—than it has been in generations past. State schools, which have long been trusted providers of affordable education, have seen their funding sources dwindle, leading to tuition hikes across the board. Paying for private school is a much more daunting prospect, with costs going up sometimes as frequently as each semester. Perhaps not coincidentally, it is easier than ever to get financial aid and government loans. Students and their families have to be very careful about becoming too financially leveraged, however, as student debt can be difficult to shake, and often takes decades to repay. Seeking scholarships is often the best choice, though isolating the options and crafting careful applications often takes a great deal of time.

Scholarships, unlike loans, never have to be repaid. Some are conditioned on things like grade point average or course load, but in most cases can fairly be thought of as “free money.” In most cases, scholarships can be combined, as well, which gives students more flexible options. Patching together savings, some loans, and a number of scholarships and grants can make even the most expensive program suddenly within reach.

Planning early is usually key, as is having a realistic view of just how much college will cost. In most cases, the price of tuition in a given year is not constant: rates tend to go up steadily, meaning that today’s students need to budget for anywhere from 2-5 percent increases each year.

“At the public colleges, this year’s hikes ranged from 2 percent at William Paterson University in Wayne to 5.5 percent at NJIT,” New Jersey’s Star-Ledger reported in October 2012. “At private colleges, the increases ranged from less than 1 percent at Georgian Court University in Lakewood to 6.1 percent at Monmouth University.” According to the Star-Ledger’s research, nearly every college in New Jersey raised both tuition and fees—things like room, board, and books—faster than the rate of national inflation. This has meant that alternative funding sources are more important than ever before.

There are three main sources of college scholarships: federal and local governments, which usually offer money in the form of a grant; institutions themselves, which often offer scholarships based both on merit and on need; and private foundations and organizations. It is usually possible for a student to win money in all three categories, though this often takes a lot of careful planning.

Some of the most common federal scholarships are Pell grants, though these are only available to students from low-income families. The Federal Supplemental Educational Opportunity Grant works the same way. Students who do not meet these income thresholds may have better luck at the state level. Every state, including New Jersey, offers at least some scholarships and grants to state residents interested in pursuing higher education within the state’s borders. Some of these are based on merit, geography, or projected area of study; others are limited to students from certain ethnicities or cultural backgrounds.

Private scholarships are by far the most flexible, as well as the most wide reaching. These sorts of initiatives can be sponsored by almost any organization, and can range from just a few hundred dollars to full tuition reimbursements. The United States Department of Labor sponsors one of the most comprehensive private scholarship databases, and good information can also be found through FastWeb, an independent scholarship tracker.

Getting started early is often the most important part of the process. Narrowing down eligible scholarships, not to mention putting together proposals and applications, can take quite a bit of time. Most experts recommend getting started about a year in advance. “The number of scholarships available hasn’t been growing fast as the increasing number of students,” Steven Goodman, author of College Admissions Together: It Takes a Family, told USA Today in 2011.

This means that scholarship funds are depleting faster in the application cycle. In many cases, benefactors are making awards to the first qualifying applicant, rather than waiting for a complete pool. The old adage that “the early bird catches the worm” has perhaps never been more apt, and the lesson applies to institutional merit-based scholarships as well as independent grants. Students looking for merit awards are often advised to get their college applications in as early in the process as possible. “Students who apply early, whether early action or early decision, are more likely to receive merit-based aid at colleges that award such aid,” Mark Kantrowitz, founder of financial aid website FinAid.org, told The New York Times. “These students are granted awards before the college has exhausted the pool of money during the regular admissions cycle.”

Getting a scholarship or two is often one of the most pain-free ways to pay for college. The process can be laborious, but when faced with the alternative—sky-high bills that often lead to loans—the investment seems well worth the search costs.