The average annual cost for a student at a private university is over $32,000 in the 2007-2008 academic year, according to the College Board. At some schools, the total cost for tuition and fees plus room and board is nearly $50,000. For the 2008-2009 school year, costs will be higher.
Some elite schools have expanded financial aid to moderate-income families. Stanford and Columbia will require no tuition from students whose families make less than $100,000 a year; Harvard has put a lid on costs for families earning up to $180,000.
However, not all colleges have these policies so paying for college may be difficult. Borrowing money might be necessary.
Some lenders have stopped making loans for higher education, citing a cutback in federal funding and credit-market chaos that has resulted from problems with subprime mortgages.
Lenders still active in this market are tightening their standards, but loans still are available. You even may be able to borrow from the federal government, if your child’s school participates in the Department of Education’s Direct Loan Program. Interest rates on such direct loans are fixed at 6.8 percent (student loans) or 7.9 percent (parent loans), with some student rates dropping to 6 percent in July.
