"Graduate in Four Years, Debt Free"

"Graduate in Four Years, Debt Free" The Headline Fired Me Up!

By George Gately, IEC, CCA
Mooresville, NC

"A chance to graduate in four years, debt-free" that was the headline and it caught my eye. The story is about an initiative at The Ohio State University (my Buckeye friends have taught me the THE is de rigueur).
Here's the link read the story; or copy & paste the URL into your browser. [https://www.wcbe.org/post/ohio-state-president-announces-debt-free-degree-initiative]

Forgive me, but the initiative and the glowing news account are marketing, not reform. Let me give you my blow-by-blow.
  1. A chance to graduate in four years, debt-free that exists now. The cost of education is one factor, but the main contributors to student debt (www.completecollege.org) are change of major and transferring colleges. In other words, Independent Educational Counselors (like me) are more important to a four-year degree than is OSU's initiative.
  2. The initiative "includes a combination of increased scholarships, grants and paid internships." I am all in favor of students working their way through college. I did, and my total education debt was $1,000, paid off at $10 per month, over ten years a nuisance but not a burden. If more scholarships and grants are possible now, why hasn't the school done that earlier? Oh, the answer is in the next paragraph:
  3. "The university plans an $800 million fundraising campaign to help cover" the costs of the initiative. No belt-tightening (none mentioned) is planned. OSU is asking others to pay them to educate someone's else's children. There is the education! "OPM" means "other people's money," and it is a mantra in the business world. That brings me to
  4. College is BIG business really big! Buyer beware. Parents are the customers. Colleges sell higher education services. Faculty and administration are paid well above average for that.
  5. "Students or their families must fill out financial forms each year." There you go. Many low-income students are already going debt-free. Affluent families hiring me express no concern for the costs of their child's education. It is the middle class the $80,000-$150,000 AGI families; most of whom are both parents working.
  6. OSU reports a 68% admit rate; with ACT scores ranging from 26-32. So, a student must first cross the admissions threshold. BUT and hold onto your hat The Ohio State University lists five campuses, four of which have open admissions policies. That is, you apply, you go. The main campus reports nearly 47,000 undergraduates enrolled. The other four are very small.

"George," you're thinking, "aren't you being just a bit cynical?" Cynical, no; skeptical of colleges really reversing course to make a bachelor's degree affordable? Absolutely!

My conclusion is that, the more colleges toot the horn of their nobility, the more America's families need IECs who are not dancing to the tune.

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The Best Way to Pay for College Part 2: Scholarships


Previously, I published an article entitled "The Best Way to Pay for College" (February 16, 2021). This is an expansion on one of the topics covered: specifically, scholarships.

Searching for scholarships by browsing the internet is not the best way, nor the safest. There are scammers and hackers out there, right?! Some professional organizations, however, do the vetting and the research needed to help you find the "legit" awarders. One of those is the reputable and resourceful College Fund for North Carolina (cfnc.org).

A visit to that group's website will confirm my major point about scholarships. That is, they are narrowly defined, and awards are typically modest. Take note! I am not discouraging anyone from searching for a private scholarship. What I do hope to help you understand is that private scholarships are unlikely to sustain you through four years of undergraduate education.

Narrowly defined

Among the scholarships listed on cfnc.org there are the following qualification restrictions:

  • At the top of the list, the applicant must be Latino or Hispanic 

  • Another requires the applicant be "a lesbian woman" (in quotes because of the current issues around gender)

  • Another states the applicant will compete based on class rank, GPA, SAT/ACT scores, leadership and note that word and financial need.

  • One more applicant must have been in Social Services foster care after the age of 12, and have remained in care at age 18.

Those examples are on the first page at the website. Listing the eligibility requirements is not meant to be a criticism, and much less a complaint. Any person or organization who wants to help pay for college, I say, "Yay! May their tribe increase." Taking the red pill, however, you probably agree that socio-economically middle-class students, with average grades and average lives probably will have a long search looking for scholarships for which they are eligible to apply.

Furthermore, the amount of money awarded to any one student mostly falls in the range of $500 - $2,000; and are a one-and-done award. Again, don't brush off the thought of any free gift, and don't expect any free gift, or combination of gifts to pay for college.

And that free gift brings us to our final point. Most scholarships stipulate that the award will be paid directly to the student's college account, to be applied against tuition. You may not see the snag, unless you've read my book, College is a Consumer Purchase.

Need-based financial aid awards are typically not cash awards, but rather discounts against the price of a semester of tuition. In other words, the college is not giving you anything. They are simply charging you less, up to 100% of tuition (the so-called "full ride" you hear people bragging about). Think about it: if your college has given you a full-tuition grant-in-aid of $4,242 per semester (example is based on Appalachian State University), and then they receive, on your behalf, a private, $1,500 scholarship, they are going to apply that against their own discount of $4,242. In other words, they will discount your tuition by $2,742 for one semester and add to that discount the $1,500 cash grant. You will still attend tuition-paid, but you will not have $1,500 to tool around with.

Let's wrap it up this way: welcome to the world of business where the ability of the business to keeps its doors open is its first responsibility. That means customers, as a rule, pay for the service and/or product provided. You, the student, and you the parent ARE THE CUSTOMERS.

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The Best Way to Pay for College Part I 
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Posted in College Planning, College Planning Strategies. Tagged as scholarships.

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