Just like everything else the cost of education has risen dramatically. Average tuition increases in excess of 6% per year are commonly seen nowadays. For example, in 1973 the price to register at The University of California (UCLA) was a little over $200 per quarter while now it is in excess of $2,000 per quarter.

A ten times increase is not at all unusual and lots of things now cost ten times more than they cost 20 or 25 years ago. By contrast, salaries have increased roughly three times in the same time period from in the region of $15,000 - $30,000 per year to about $39,000 - $42,000 per year. These numbers vary by gender, age and a great deal more but as a rough guide a threefold increase is just about right.

Happily it is not all bad news. There are many more forms of financial assistance available nowadays to students and parents than ever before. Financial aid, as its name suggests, is money which students and parents get from grants, loans and scholarships granted by both Federal and private lenders to assist students to pay for their education.

Formerly, students were dependent almost totally on Pell grants and Stafford loans to finance the cost of their education and living expenses. Nowadays Pell grants are still issued but they are needs based and meet a very small proportion of college costs today. A Stafford college loan is similarly needs based but can range from 25% to 40% of the average cost of school these days. Another type of financial aid is Perkins loans that are similar to Stafford loans but that are given only to particularly low income families.

Happily, PLUS loans (Parent Loans for Undergraduate Students) are also available now and these loans were not available 25 years ago. Despite the fact that they are referred to as student PLUS loans are given to parents rather than students to help them to pay for their child’s education. The interest rates on PLUS loans are reasonable and there are some restrictions and fees to pay but they often form an important part of the student’s overall package of college funding.

A very quick note on the subject of fees. Most loans are for a specific sum of money such as $6,000 per year to be disbursed in several payments (normally once each semester). However it is not uncommon for up to 4% in fees to be deducted from that amount before any funds are disbursed. This 4% fee on your $6,000 represents $240 that you will not see but that you have to repay. When you are looking for a loan make sure that you do your homework and see if you can find a low-fee or no-fee loan.

Though Federal loan programs like the subsidized Stafford loan program carry low fees and the government pays the interest, they are certainly not the only source of financial aid 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 need to assemble a package of funding that includes grants, scholarships, Federal loans and private borrowing.

Happily, there are now a lot more more sources of finance available than we have seen for a long time and market competition between private financial institutions in particular means that it is possible to get funds at a price that is not going to run you into unmanageable debt.

You are also fortunate to be living at a time when finding the information that you need about college grants and loans to make sensible decisions about the options available to you is also quite easy.