We shared five statements with parents and students about common vocabulary related to paying for college. Nearly one-quarter of those surveyed couldn’t correctly identify which were true and which were false, creating a risk of misunderstanding their costs and financial aid.
To learn how well families understand common terms related to paying for college, How America Values College 2018 asked parents and students whether the following five statements were true or false. On average, more than three-quarters of both parents and students got it right. For nearly one-quarter, however, not understanding the jargon could be a costly problem.
True or false
- Interest rates for federal education loans are regulated.
TRUE: The federal government sets the rates annually; everybody is charged the same rate for the same type of federal loan.
- Free tuition means college is free.
FALSE: Being awarded a scholarship or college grant that pays for tuition is terrific, but it doesn’t let you off the hook for paying for fees, books, living expenses, or other college costs beyond tuition.
- Work-study is automatic money to help pay for college.
FALSE: This proved to be the most misunderstood item. Work-study isn’t automatic. A student qualifies for it through the financial aid process. If he or she is eligible for an amount listed on the award letter, the money isn’t automatically given to them. The student must seek out a work-study job and work the required hours to earn the aid.
- Middle income families can get financial aid.
TRUE: Financial aid is available for families of various income levels, both through private college scholarships as well as federal aid, including student loans.
- The sticker price is what you will pay for college.
FALSE: The sticker price is the full price a college publishes, but many families receive financial aid or discounts. When evaluating college costs, students and parents should also look at the “net price” families are paying at a particular college. The net price is the average cost after financial aid has been applied.
Figuring out how to pay for college means figuring out the vocabulary that comes with this venture. Not understanding the terminology could result in misunderstanding the potential cost of college or missing out on financial aid or other opportunities. A basic understanding of the jargon used could help make college more affordable.
Find out more about How America Values College 2018.
How families are making college more affordable
Sticker price? Work-study? Free tuition? How well do you understand paying-for-college terminology?
Top 10 things college students wish they’d known before enrolling
Appreciating the value and benefits of a college education
Choosing a college that’s the right fit
College majors and salary expectations
About this study
How America Values College 2018, a national study by Sallie Mae and Ipsos, explores how families of undergraduates regard the value of higher education, the factors that influence their choice of schools, and the steps they’re taking to make college affordable.