Five Surprising Financial Aid Facts
By Bridget Kulla
September 04, 2008
Think you know financial aid? These five facts might surprise you.
1. Most students receive financial aid.
If you’re not going to bother applying for scholarships because you think no one ever wins, you’re wrong. Two-thirds of full-time undergraduate students receive financial aid in the form of grants or scholarships, according to the College Board. The cost of college is rising, but so is the amount of financial aid. Total student aid grew 82 percent from the 1996-1997 school year to the 2006-2007 school year, the College Board reports. FastWeb has more than $3.4 billion worth of scholarship money available in its database, and this number grows daily.
2. One third of students don’t attend their first-choice college due to cost.
Don’t let cost get in the way of completing your degree. Thirty-four percent of first-year students say they were admitted to their first-choice college but did not attend because of cost, according to a report by the Cooperative Institutional Research Program (pdf). While the cost of tuition is certainly a huge concern, there are many ways to cut down on that cost, like filing your FAFSA early, offsetting cost through benefits like federal work-study, and choosing to stay in state to take advantage of tuition breaks.
3. People with bachelor’s degrees make more than people with only high school diplomas. A lot more.
It’s probably not surprising that you can earn more with a bachelor’s degree than you can with only a high school diploma, but the difference in earnings can be staggering. Bachelor’s degree holders make an average of 60 percent more than those with high school diplomas, reports the College Board. Over the course of a lifetime, this adds up to over $800,000 more for bachelor’s degree holders. Remember: You may shell out some serious cash to earn your degree now, but there’s an excellent chance it will pay off later.
4. Not making your student loan payments could cost you a job.
Missing your loan payments for an extended period of time, or defaulting, can have serious consequences. A loan default can damage your credit rating for a minimum of seven years and can prevent you from financing a car, getting a credit card, or passing the credit checks needed for some job opportunities. Make sure you are well informed about how much you are borrowing so you don’t end up in a situation where it is impossible for you to meet your loan payments. Get an estimate of your monthly loan payments and the salary required to manage them with this loan calculator.
5. Millions of dollars in tuition assistance go unclaimed each year.
Nearly a third of eligible students miss out on millions of dollars in education benefits through tax breaks, according to a recent government study. Sure, the tax code can be difficult to make sense of at times, but it could save you money. Talk with a tax professional to see if you can save money through education tax breaks. Learn more at FinAid’s Education Tax Benefits page.