Published in: Student Loans | Aug. 5, 2019

This Trend Could Be a Lifeline for College Hopefuls

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Good news, college students -- your costs may be lower than expected.

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Image source: Getty Images

For years, college costs have been climbing so rapidly that they've been well outpacing inflation. As such, millions of students have had no choice but to rack up loads of debt in order to finance their education.

But here's some good news: Private universities are giving out more money in the form of grants, according to the National Association of College and University Business Officers. In 2018, the average college grant was $20,255. Back in 2008, it was only $10,586. In fact, nearly 90% of first-time, full-time freshmen at private colleges received grants in 2017–2018. Talk about encouraging.

Grants vs. loans and scholarships

In case you're not familiar with the difference between loans and grants, with the former, you borrow money and have to pay it back, with interest, over time. With the latter, you're essentially gifted money to attend college that never needs to be repaid.

Grants also differ from scholarships in that they're typically need-based. Scholarships, by contrast, are generally merit-based. For example, you might snag a scholarship based on your stellar academic record, or based on specific talents you possess, such as musical or athletic skills. As such, grants can serve as a lifeline for those students who would otherwise have no choice but to take out a mountain of loans to swing a college degree.

Don't rule out private colleges

You'll often hear that avoiding private colleges and sticking to state universities will save you a bundle on tuition. And often that's true. For the 2018–2019 academic year, the average cost of tuition at a private university was $35,830. By contrast, the average public four-year, in-state school cost $10,230, while the average public four-year, out-of-state school cost $26,290. These figures don't include the cost of room and board, nor do they include extras like books and course materials.

When you look at numbers like these, it's easy to see how choosing an in-state, public college over a private one could easily knock $100,000 off of your total higher education tab. But when you factor in the potential for grants, your actual costs could wind up much lower. As such, it pays to apply for financial aid through the colleges you're interested in and see how much money they're willing to give you.

Of course, if you're not granted enough money to make a private college affordable, then choosing a public school is your next best bet -- and opting for an in-state school will especially help keep your costs down. Remember, too, that you can always take out student loans to pay for college, though you don't want to go overboard in that regard, since the more debt you take on, the harder it will be to pay it off after the fact.

Though private universities are notoriously expensive, don't be too quick to write off the idea of attending one. Given the way grants have been growing, you might find that attending a private college is more doable -- and affordable -- than you initially thought.

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