College Pete

The Morning After

The Morning After

At the risk of pouring rain on the upcoming Miami Heat NBA Championship parade, did you hear that tuition will increase again next semester at Florida universities?

After a late night of partying, South Florida awoke to find today’s Herald  full of colorful, celebratory photos of the 3 Kings and their supporting Miami Heat cast hoisting the Larry O’Brien Trophy. But it seems that the local paper ran out of color ink when printing the Local section, usually draped with a blue stripe.  It’s almost a subtle way of saying, ‘Don’t read me, go back to the Sports pages and our Special Section with its winning colors.’ 

As local sports fans, we had plenty to enjoy and consume in today’s paper following last night’s celebration.  As parents of college-bound teens, the story about tuition hikes may remind us of the slight headache we feel on the morning after. 

Florida International University will raise tuition the maximum 15% next fall, while University of Florida is (only) raising its tuition by 9% and FSU will see a 13% jump.  These hikes were approved by the Board of Governors, and they are necessary because the state has reduced the higher ed budget by $300 million in the coming year, bringing the total reduction since 2008 to over $1 billion.  During that time, in-state tuition has more than doubled, while Bright Futures scholarships have been reduced.

It’s expensive to run a major university.  When the state slashes its investment in higher education, university presidents need to raise tuition in order to make up the shortfall and maintain operations.  Unfortunately, the budget cuts far exceed what is collected from tuition hikes, and the product that is delivered to our students ultimately suffers.  We’re seeing that with overcrowded classes, increases in online courses, declining 4-year graduation rates, cancellation of programs, and departure of leading professors.

Who is really affected by these tuition increases?  Theorically, lower income families shouldn’t be, since 70% of the tuition hikes are supposed to go to increases in financial aid.  It’s the middle income families, or those earning between $60K and $160K who will feel this the most.  They won’t qualify for need-based aid at the state schools, but they will pay higher tuition (a $609 increase at FIU).  Once again, the squeeze is on the middle class.

A subtle beneficiary of the tuition increases are FL Prepaid account holders who are looking to send their kids out of state.  What many people fail to appreciate is that FL Prepaid can be used out of state at nearly any college or university.  So when the Board of Governors raises tuition, your prepaid dollars stretch a little bit farther when used out of state or even at in-state private colleges.

While FL universities remain a relative bargain, this is a time for families to look at out of state options as well, in particular private colleges.  Because once financial aid is added to the mix, many private colleges can cost less than in-state, public universities.  That’s why I call finanical aid The Great Equalizer.  And the educational product that students enjoy at a smaller, private college can be significantly better.  Take a look at your own industry – it’s not always common to find a better product at a lower net price.  But in the world of higher ed it happens all the time.  But finding that bargain is not automatic – it requires research and planning.

Where to begin?  I’m holding a public workshop next month down in Pinecrest.  I’ll explain how the financial aid process works, how middle class families can get a big discount on the cost of college, and what you and your student should be doing now to maximize your chances of admission and getting money.  If you are the parent of a high school student, NOW IS THE TIME to hear this message.  Don’t put this off any longer.  There is no charge to attend, but missing this information, or procrastinating, can prove very costly.  I look forward to seeing you there.  Click here to register.

Best,
Peter

P.S. Feel free to forward this to a friend.  They’ll thank you for it.

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