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Paying for College. Kelly Graves Associate Director of Scholarships Baylor University. Public Universities : $15,640* Projected costs by 2020 $160,341**. Private Universities : $22,255* Projected costs by 2020 $345,593**. How much does college actually cost?.

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Paying for College

Kelly Graves

Associate Director of Scholarships

Baylor University

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Public Universities:


Projected costs by 2020


Private Universities:


Projected costs by 2020


How much does college actually cost?

*Includes tuition & fees, room & board, books & supplies, transportation, other expenses based on average charges for fall 2005

**Assumes a 6% annual increase with costs expressed in *

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Tips for Reducing College Costs

  • Take the Recommended High School program to prepare for college

    • If you are not prepared, you will have to take & pay for development education courses before beginning college level courses.

    • This can amount to an additional year of college--& an additional year of expenses!

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Tips (continued)

  • Take college courses while you’re still in high school (discuss with your school’s counselor for details)

  • Take advanced placement (AP) classes & exams or place out of college hours by taking a CLEP exam

  • Begin your college career at a public community or technical college (ensure courses will be accepted at institution you will transfer to)

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Plan Ahead

Paying starts with planning!

With the right planning, a college education is within reach for every Texas student.

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Ways to Pay

  • Savings

  • Portion of current income

  • Student’s part-time & summer earnings

  • Education tax credits

  • Military service

  • Financial aid

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Savings Plans

Tomorrow’s College Investment Plan (the Texas 529 Savings Plan)

  • Educational plan sponsored by the state of Texas (

  • Earnings on your investment will grow tax free (no capital gains taxes are paid)

  • Withdrawals for qualified education expenses are tax free

  • Anyone can contribute, whether the 529 plans is for their child or that of a friend or family member

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Education IRAs

Educational Savings Accounts

  • Tax payers may withdraw funds from a regular Individual Retirement Account (IRA) without penalty for their own higher education expenses or those of their spouse, child, or even grandchild.

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Education IRAs (continued)

For each child under the age of 18, families may deposit $2,000/year into a special Education IRA in the child’s name.

  • Earnings are tax-free & no taxes will be due upon withdrawal if money used for post-secondary expenses

  • After the child reaches age 30, his/her IRA must be closed or transferred to a younger family member

  • There are a few restrictions. Visit for more details

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Education Tax Credits

  • Education tax credits, like the Hope Scholarship Tax Credit & the Lifetime Learning Tax credit, are available to individuals & families who file a tax return & owe taxes

  • Tax credits are subtracted from the tax an individual or family owes rather than reducing taxable income like a tax deduction

  • For more information visit

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Military Service

The U.S. Armed Forces have helped millions of Americans go to college!

  • Military First, College Later

    • Students can receive up to $50,000 toward school expenses in return for an active duty tour

    • Students can receive up to $24,000 in return for a one weekend a month & 2 weeks a year training by serving part-time in the Reserves

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Military Service (continued)

  • College First, Military Later

    • ROTC

      • Students who participate in the Reserve Officers Training Corps (ROTC) can be eligible for merit-based scholarships worth more than $50,000

      • The Armed Forces cover tuition and pay students a monthly allowance for living expenses; the student is then required to serve a minimum active duty obligation (3 years for Army, Navy & Marines; 4 years for the Air Force)

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Military Service (continued)

  • Military Academies

    • For students who receive a Congressional appointment to a U.S. military academy, the federal government will pay 100% of the cost of attendance.

    • In return, students serve as a full-time member of the military during school & must commit to five years of service after graduation.

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Financial Aid

What is financial aid?

Student financial aid is money used to help pay for college expenses. It is available from many sources & in many forms. Financial aid can be used to pay for tuition & fees, books & supplies, & the living expenses associated with attending college.

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Financial Aid (continued)

There are two types of financial aid:

  • Merit-based aid

  • Need-based aid

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Financial Aid (continued)

Merit-Based Financial Aid

  • Merit-based aid is awarded based on how well the student performs in a particular area such as math, science, athletics, overall academics, or intended major area of study

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Financial Aid (continued)

Merit-Based Financial Aid

  • A prime example of merit-based aid is scholarships

  • Merit-based aid usually does not have to be paid back although sometimes there are restrictions or conditions on the award

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Financial Aid (continued)

Need-Based Financial Aid

  • The amount and type of need-based aid depends on how much the family can afford to pay toward education expenses.

  • The amount you should be able to pay is referred to as the Expected Family Contribution or EFC.

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Financial Aid (continued)

How is financial need determined?

Students must first complete the Free Application for Federal Student Aid (FAFSA) at

The EFC is calculated using a standard formula that uses the information input on the FAFSA including:

  • Family size

  • # of family members in college

  • Family’s income & assets

  • Student’s dependency status

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Financial Aid (continued)

How is financial need determined? (cont)

Financial need is the different between the school’s cost of attendance (COA) & the EFC.

COA –EFC = Financial Need

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Financial Aid (continued)

Types of Need-Based Aid:

  • Scholarships

  • Grants

  • Federal or state work study programs

  • Subsidized loans

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Financial Aid (continued)


  • No federal or state need-based scholarship programs & few merit-based scholarships (e.g., Byrd & Fifth Year Accounting Scholarships)

  • Institutional awards usually funded from endowments

  • Private scholarship funds (e.g., Gates Millenium Scholarships)

    • Think local (church, civic organizations, etc.)


    • Check with your high school counselor

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Financial Aid (continued)

Beware of Scholarship Scams!

  • The Federal Trade Commission warns parents & students to look out for these tell-tale lines:

    • “The scholarship is guaranteed or your money back”

    • “You can’t get this information anywhere else”

    • “I just need your credit card or bank account number to hold this scholarship”

    • “The scholarship will cost some money:”

    • “You’ve been selected by a national foundation” or “You’re a finalist” in a contest you never entered

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Financial Aid (continued)


  • Federal programs:

    • Federal Pell Grant

    • Academic Competitiveness Grant

    • National SMART Grant

    • Federal Supplemental Educational Opportunity Grant (FSEOG)

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Financial Aid (continued)

Grants (cont)

  • State programs:

    • Texas Public Education Grant (TPEG)

    • Tuition Equalization Grant (TEG)

    • Towards Excellence, Access, & Success (TEXAS grant)

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Financial Aid (continued)


  • Federal loan programs:

    • Federal Perkins Loan

    • Federal Family Education Loan or William D. Ford Federal Direct Loan Program

      • Subsidized Stafford Loans

      • Unsubsidized Stafford Loans

      • PLUS loans for parents of dependent students

      • PLUS loans for graduate or professional students

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Financial Aid (continued)


  • State loan programs

    • B-On-Time Loan

    • College Access Loan (CAL)

  • Alternative or private loan programs.

    • Student must be credit worthy or have credit worthy co-signer

    • Terms vary greatly depending on lender & credit worthiness of borrower/co-signer

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Financial Aid (continued)

Work Study

  • Federal work study

  • Texas college work study

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Financial Aid (continued)

Some aid programs have both need-based and merit-based components. Two examples include the Academic Competitiveness Grants (ACG) and National Smart Grants

  • In Texas, ACG grants are awarded to freshmen ($750/yr) & sophomores ($1300/yr) who completed the Recommended or Distinguished High School plan & who are Pell Grant eligible

  • SMART grants ($2000) are awarded to juniors & seniors with certain majors (e.g., math, science, foreign language) who are Pell Grant Eligible

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Financial Aid (continued)

Comparing Aid Offers

  • Review the COA of the different colleges

  • Compare the total gift aid to the COA

  • Note the restrictions or conditions of the award(s)

  • Is there unmet need?

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Financial Aid (continued)

Financial Aid Myths

  • My family’s income is too high to qualify for financial aid. The only way to know for certain is the complete the FAFSA, which takes into consideration a number of different factors.

  • My parents saved for my college education so we won’t qualify for any aid.In fact, the EFC formula only uses a small portion of parental assets, if any.

  • My brother wasn’t eligible for financial aid so I won’t be either. The EFC formula takes into account siblings attending college.

  • Millions in scholarships go unclaimed every year. This statement has never been verified & used by scammers to entice families into paying for their services.

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Financial Aid (continued)

FYI: Financial aid is often divided into two other main categories:

  • Gift Aid (aka Free $$)

    • Scholarships

    • Grants

  • Self-Help Aid

    • Loans

    • Work study

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Financial Aid (continued)

Quick Fact:

Of the $129 billion in aid available to students in 2004-05, 47% came from federal student loans, 33% from federal, state, & institutional grants, and 6% from tax credits.

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Financial Aid (continued)

Quick Fact:

Full-time students at 4-year institutions received an average of $3,300 in grants & tax benefits in 2004-05.

Full-time students at 4-year private schools received an average of $9,600.

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Paying for College

Special credit goes to the following websites & their parent companies:





    And a big thank you to the Texas Farm Bureau for this opportunity!

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Paying for College

Thank you!

Have a good evening & enjoy the rest of your TFB Youth Leadership Conference