3 myths continued

(Continued ...).


Until now, families had to do a fair amount of digging to try to figure out what they might actually pay. They had to gather the "sticker price" cost of various schools, get an idea of their "expected family contribution" from calculators such as the one at Kantrowitz's FinAid.org, and then try to get some idea if their student was likely to get merit aid that might reduce the total cost.

Too many don't do this research, with potentially disastrous results.

"It's reckless to apply blindly and hope in the spring you'll get good news," O'Shaughnessy said. "What if you don't and you've missed the deadline for other schools?"

Where to get money for college

Fortunately, starting in October, all colleges that offer financial aid are supposed to post "net price calculators" on their websites, O'Shaughnessy said. These calculators will allow people to input various factors, including income, assets, the student's grades and test scores, to get an estimate of the net cost of the education there.

The calculators aren't perfect. Some don't include merit aid, which schools can use to significantly reduce costs for students they're trying to attract. So families will still need to do some research.

Fox recommended that families use the federal Education Department's College Navigator to figure out which schools are most likely to want their kids. Under the "admissions" tab for each school, you'll find SAT scores for the 25th and 75th percentile of students attending there. If your student's SAT scores match or exceed the 75th percentile number, "that significantly improves the chances they will offer a better financial-aid package," Fox said.

Schools may also try to recruit students for particular majors or who have particular skills (the band may need a trombone player, for example). Ferreting out that information may require a call to the admissions office. Fox attends college fairs, which are often held in large-city convention centers, to talk to admissions officials about what types of students their schools are trying to recruit.

A well-connected high school guidance counselor can be another source of leads, although you're more likely to find those in a private high school than in many public schools, where guidance counseling is frequently subject to budget cuts.

Myth No. 3: "A public school will be cheaper than a private college."

Reality: You could end up paying less for a private-school education.

"Many private colleges will offer a need-based financial-aid package or a merit-based package that brings the net price either close to or even below the cost of a public school," Fox said. "At public colleges, the financial-aid packages are much more loan-heavy, with a lower percentage of grants and scholarships."

You also need to factor in how much time it will take to graduate. Far fewer students manage to graduate from public schools in four years (29.9%), compared with private schools (51%). If you wind up paying for an additional year or two, that could dramatically increase the overall cost of a public-school education.

Those statistics are for people who started college in 2002, the latest available data from the U.S. Department of Education's National Center for Education Statistics. Since then, the situation at many public schools has gotten worse as strapped state governments have slashed education budgets.

"Students can't get the classes they need, or they're not being offered every semester," Fox said. "Parents should factor in the cost of at least an extra year when they're comparing public schools to private."

Of course, their child may be the exception, Fox said. A kid who knows what he wants to do, who is proactive enough to plan out the courses he needs, and who's first in line at registration has a shot at getting through a public college in four years.



Other kids may flail around, sometimes for years, trying to decide what they want to do. Again, private schools may have the advantage here, since they offer more guidance -- "handholding," Fox called it -- to help students settle on their majors.
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A commonly recommended strategy is for students to attend a cheaper two-year college first and then transfer to a four-year college. This can work well for motivated students. Less motivated students, though, might attend only part time and never complete a degree at all. Without a degree, all the money paid for education is essentially cash down the drain.

Community college "can be like a sand trap," O'Shaughnessy warned. "You may not get out of it."


Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Click here to find Weston's most recent articles and blog posts.