Over the last 25 years the cost of education has increased significantly. Tuition increases of more than 6% a year are commonplace these days. As an example, back in 1973 the price to register at The University of California, Los Angeles (UCLA) was in the region of $200 a quarter and today it is more than $2,000 a quarter. This tenfold increase is not at all abnormal and many things now cost ten times more than they did back in the 1970s. Incomes, on the other hand have increased roughly three times in the same period from about $15,000 - $30,000 a year to around $39,000 - $42,000 a year. These figures vary by age, gender and more but as a guide a threefold increase is about right. Fortunately there is some good news. There are far more types of financial aid available today to students and parents than ever before. Financial assistance, as the name suggests, is money that parents and students receive from scholarships, loans and grants granted by Federal and private lenders to aid students to pay for their education. Formerly, students could depend almost totally on Pell grants and Stafford loans to finance their education costs and living expenses. Nowadays Pell grants are still issued but they are need based and meet a very small proportion of the education cost today. Stafford loans are also need based but can meet 25% to 40% of the average cost of financing school these days. Another type of aid is Perkins loans which are similar to Stafford loans but which are given only to particularly low income families. Luckily, PLUS loans (Parent Loans for Undergraduate Students) are also available today and these were not around 25 years ago. PLUS loans are provided for parents and not students to assist parents to pay for their child's education. Interest rates for PLUS loans are reasonable and there are a few restrictions and fees levied but they often form part of the student's total package of funding. One very quick note about fees. A lot of loans are for a specific amount such as $6,000 a year disbursed in several payments (often one payment per semester). However it is common for up to 4% in fees to be deducted from that amount before any funds are disbursed. That 4% fee on a $6,000 represents $240 which you will never see but which you have to repay. Whenever you are seeking a loan ensure that you do your homework and see if you can find a low-fee or no-fee loan. Despite the fact that Federal loan programs like the subsidized Stafford loan program charge low fees and interest is paid by the government, they are certainly not the only form of financial assistance nowadays and are not always the best choice. Finding the funds to cover the cost of a college education nowadays is a complex operation and the majority of students will have to put together a package of funding which includes grants, scholarships, government loans and private borrowing. Fortunately, there are now a lot more more funding options available than we have seen for a very long time and competition in the open market from private lenders especially means that you can get funds at a price which is not going to run you into unmanageable debt. You are also lucky to be living in an age where finding the information which you need to make good decisions about the options which are available to you is also relatively easy.
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