A slowing economy doesn’t spare education – and everyday as I’m looking for ways to help students find money for college I’m just reminded that this is a bad year for financing higher ed.
Average wages have been flat when adjusted by ‘official inflation’ numbers for a long time, and the costs of college have been going up faster than that. This week, ABC Money Beat is reporting that the economic problems are changing the way students find money for college and the choices they’re making once they get there.
First of all, the number of students living in the dorms is going up in a lot of colleges. With gas prices still near $4 despite some recent drops in the commodity futures markets, there’s plenty of reason for new college students to forget about the car and walk to class; car payments, gas, insurance, repairs. Suddenly, a bicycle sounds like a pretty good investment – especially if there are employment opportunities on campus. Some schools are even past their dorm capacity – but where is the money supposed to come from to build more?
Certainly not from an influx of new students living off campus and financed by student loans. Just a few years ago the hot topic among financial aid enthusiasts was how student loans were such a bad deal. Now that they’re in short supply, colleges are starting to wonder how they’re going to pay for their own expansion – and in some cases if they’ll even be able to get enough students enrolled in the next few years to keep their business model running.
Also, financial aid applications are up more than 15% from this time last year. Of course, last year wasn’t exactly a great one for the economy either so this is showing that what comes out of wages and job opportunities are parents’ investment accounts during a slowdown really has an effect on how students come up with the money for their college expenses.
My recommendation to students is to focus on scholarships with twice the effort this year. Also, make sure those financial aid applications are turned in as soon as possible – a lot of colleges disperse this money on a first-come first-served basis, and this year a lot of people are after the shrinking pile of cash to pay their growing tuition bills.