Paying for College Pt 1

Scott: This episode of Dollars and Cents has been edited into two parts. This is part one. [00:00:00] Hi everybody, and welcome back to another episode of Dollars and Cents, Hapo Community Credit Union's financial literacy podcast. Today, uh, we're going to have an interesting topic. Everybody has a, uh, certain plan for themselves, a certain future that they want to build. Uh, today, we're going to talk about one of those things.

We're going to start talking about higher education, going to college, and more importantly, Paying for college today to be the experts on this. We have brought in Ricky and Jana K from Washington State University, Tri Cities Financial Aid Department. Thank you guys so much for joining us. Thank you for inviting 

Ricky: us.


Scott: Glad to be here. Right on. Now. We know, uh, that college is getting more and more expensive as time goes. Um, but we also know that it's a pretty standard method for people to go get, uh, higher paying jobs, better jobs. Let's talk about what the value of a degree is before we get into talking about how to pay for it.

Jana Kay: Sure, and that the increase in tuition [00:01:00] and the cost of education, we talk to families all the time who are reluctant about getting a college degree because they're afraid they can't pay for it, but there are a lot of financial aid opportunities that can help reduce the cost, and we believe that it makes a difference in students lives.

And we know that it makes a difference in their earning potential. I know 

Scott: it's worked very well for me in in my career path. I did graduate from Washington State University with a degree in computer science. And now I'm sitting behind a microphone. I'm not doing exactly the computer science thing, but that degree has opened countless, countless doors for me 

Jana Kay: as well.

And the Bureau of Labor and Statistics has Just recently come out with a study, and they've said that students or employees who have a college degree make 30, 000 more a year on average than those who have just have a high school diploma. And is 

Scott: that due to the education? Is that also potentially due to?

[00:02:00] Uh, displaying a commitment to following through with a process like a four year or a two year college and actually earning that degree. 

Jana Kay: Yeah, I think it's both. I think that's a good point is that they are, um, when students earn their degree, they are not just learning the content in the classroom.

They're learning how to navigate complicated bureaucratic systems and how to work and how to be part of a team. 

Scott: And also, I think for a lot of those students, it is the first time that they're really out on their own doing those things, not necessarily all situations, but a lot of kids in high school are living at home with their family and have a different structure around them.

And if you move out like to a different city to attend a college, you're probably on your own room and board dorm rooms. You're navigating a whole new lifestyle as well. 

Jana Kay: Exactly. And, you know, we're. With the Tri Cities, with our campus, a lot of our students are local, and they're still living at home, which is saving them quite a bit of money, [00:03:00] but you're right, for students who are going to a residential campus, it's a completely new life, and they're learning how to budget, they're learning how to manage their time really differently.


Scott: when we start talking about paying for college. We're not just talking about the value of the degree, but also potentially those life lessons. Uh, and navigating that new environment is going to impact your ability to, you know, be functional in your career, be capable of being a good co worker to, uh, to a company that hires you on as well.

Jana Kay: Correct. And our faculty are really mindful of the fact students are paying a lot of money to be in school. You know, we want them to graduate. efficiently quickly and with the skills to be career ready. So there are there's a big emphasis at W. S. U. In general, but I think most institutions now that students aren't just learning again the content they're learning how to be good employees.

All right. 

Scott: Uh, and you did mention the cost. So let's Let's, let's dive [00:04:00] into some of the nitty gritty here. What are we talking about as far as a four year degree tuition at an in state college like Washington State University? Yeah. 

Jana Kay: So, one thing, um, that I think want everyone to be aware of is that each college and university is required to publish a cost of attendance.

And that includes tuition and fees, but also the indirect costs that come with going to school like housing and food and transportation. 

Scott: Cost of living in a town like Pullman is going to be very different than say, cost of living over in Seattle at the University of Washington. And from state to state, 

Ricky: and especially if you're out of state tuition as well, compared to in state.

makes an impact as well. Oh 

Jana Kay: yeah. Yeah, and a lot of our students are saving quite a bit of money because most four year universities if you're going to a residential campus first year students are required to live on campus. And so students who are living at home are saving about 10, 000 a year. by not having a [00:05:00] housing and dining plan on a campus.


Scott: that room and board really tends to add up. Assuming that your parents aren't causing or aren't charging you rent at home and groceries and utilities, which does happen. Yeah, 

Ricky: it's still cheaper than going 

Scott: on your own. Absolutely. Yeah. 

Jana Kay: Um, so with the cost of attendance at WSU, the tuition is just over 11, 000 a year.

Okay. And then, and that's tuition and fees. And then there's the indirect costs like books and supplies and housing. And transportation and miscellaneous, the total cost of attendance for a student who is not living at home, who's a Washington resident, is just about 32, 000 a year. Okay, so... But, direct costs and indirect costs, and those direct costs are tuition and fees.

The indirect cost students have some control over. 

Scott: Yeah, finding a cheaper place to, to live or living purely on top ramen, which is the classic college student trope or stereotyping. [00:06:00] 

Jana Kay: We hope they're eating, you know, something that's grown. Something green, 

Scott: but yeah, I, I know, I know my roommates and I always had a, a shared grocery budget.

Mm-Hmm. . Uh, so we, we would, uh, determine when those splurge days were gonna be where it's like, let's go find a couple of nice cuts of steak and barbecue and whatnot. But that was definitely not every night. Oh, no. Oh no. I also know that I ruined more than a couple boxes of macaroni and cheese by not realizing that we didn't have milk in the fridge or butter or something along those lines.

Yeah. Life lessons . Absolutely. You never really know how bad Mac. and cheese can be until you accidentally have to use mayo for all the ingredients.

Jana Kay: I will just say, since we're talking about food, though, is a lot of universities, including all the WSU campuses, we have food banks now for students. And so ours is. We have a really well stocked food bank that's supported by Lamb Weston and Second Harvest. Excellent. And so students are supplementing their 

Scott: groceries.

And are they lucky [00:07:00] enough to get some Cougar Gold cheese in that food bank? Um, we don't quite 

Jana Kay: have that. We do have it at the bookie, but we do not have it in the food bank. We do have the boxes of mac and cheese, though. There 

Scott: we go. There we go. So, uh, we talk about financing all of this, uh, this lavish lifestyle, uh, living on campus or off campus with a family or in, in a shared apartment with, uh, friends, uh, what sources, aside from obviously being independently wealthy, are we talking about for funding these things for 

Jana Kay: students?

Yeah. So there are different types of financial aid that are available for, for students. Absolutely. 

Ricky: Absolutely. So. So, before we always tell people, always apply. Rule number one, you don't know what sources are out there until you apply. But, there are plenty. There's also federal, which is between the FAFSA.

FAFSA, depending, may use parents information, but the FAFSA is going to determine if you're eligible for Pell Grants, student loans, [00:08:00] uh, which is also tied in for those that are eligible, which is state aid, which also can help you with the form of grants. Okay. Okay. So, we have federal, which is.

State is the grants, of course, there's also third party private scholarships out there, of course, we have institutional actual awards as well. Okay. So those are out there as well. So that can help. And of course, I always tell students, hey, think outside the box, see, always check with your employers, if they offer any kind of tuition assistance or reimbursements.

Always read between the lines too, because sometimes they do have stipulations where I tell students, you might have to work, continue working with them. After you graduate 

Scott: until that's paid off or for some other stipulation of time, just to be, you know, Hey, 

Ricky: direct and forward to students, make sure you always look into that 

Scott: too.

Absolutely. And you mentioned scholarships, and I would be remiss if I didn't mention that, uh, we here at Apo have given out, I want to say this year was 60, 000 in scholarships to, uh, [00:09:00] local students, which they can apply to, uh, college tuition in state, out of state. trade school apprenticeship program, something along those lines.

So absolutely be out there looking for what opportunities exist out in your community. You might be shocked at who actually does give out scholarships and aid. 

Ricky: Agreed. That's where I always come in and tell students to always think outside the box. Everybody tends to go to the websites. Of course, you know, it's a great resource, but your competition is a lot greater.

Yeah. So when you think outside the box, hey, not much out there that you might find as many people competing for it, but there's 

Scott: a lot of money. I know when I was, uh, going to school, I did a decent amount of research on, on different scholarships, any community groups. Um, anybody that generally has community in their name should be.

Uh, a place to go start looking at, uh, the Rotarians, the, uh, Shriners, I believe as well. Uh, again, credit unions, uh, I know that we are not the only one locally [00:10:00] that gives out scholarships, uh, and, and that adds up quite a bit. And like you said, try and find the ones that maybe not a lot of other people are aiming for.

Increase your odds of getting it. 

Jana Kay: Yeah. And we want students to be aware that there's not just the private scholarships that they can apply for. We have a lot of institutional funding as well. So, in addition to the private scholarships, students when they apply for admission are considered for our academic achievement awards.

Okay. So students who have a 3. 0 or above could be receiving tuition waivers. From anywhere from 2000 to $4,000 a year that are renewable for four 

Scott: years. And these just show up as like a random surprise in your inbox. , like an email is like you may have won. Well, 

Jana Kay: it's part of their admission offer. And so if they're meeting the application deadlines, then they, it would be in their admission letter to say, by the way, you also qualify.

Oh, okay. For a $4,000 a year tuition waiver, an academic achievement award. And they'll know that upfront and we'll be able to de [00:11:00] when they're. searching to see which college they want to go to. They can apply that to the cost of attendance. Okay, 

Scott: so definitely not a spam email type of a warning. Like, you just won the jackpot.

No. Publishers clearing house type thing. But to add on to her. The acceptance letter is going to give you that information. And 

Jana Kay: that's pretty much any four year institution in Washington. Not just WSU. Okay. Has those achievement awards. Ours are pretty generous in that they're renewable for four years.

Not all of them are. But, um, I think every school has those. Correct. 

Ricky: But one thing to add on to what she said, deadlines, meet deadlines, people. Deadlines can save you a lot of money if you actually just do what you're supposed to do. Get 

Scott: it in on time. Absolutely. If you're late, does that completely preclude you from, uh, from earning?

Jana Kay: So we have a WSU general scholarship application, and that's where students are applying for donor funded scholarships. And that's where, um, companies or individuals have given money to WSU [00:12:00] Tri Cities and said these are the criteria that we want to look at with students. Students fill out an application and then we determine which awards they qualify for.

January 31st at 11. 59pm is the deadline for that application. And so if students don't submit that on time, they're not considered for any of that. So far this year, we've dispersed more than 300, 000 in donor funded scholarships. 

Scott: Very lovely. I know that, um, we tend to see on our own a lot of, uh, last minute submissions coming in and people are just like, Oh no, I forgot that that was due this day.

Get it done early. Get it done like sooner than you don't even have to worry about the last 

Jana Kay: minute panic. Right. Especially our application requires 11 PM. 

Scott: Right. 

Jana Kay: Yeah, we want them to start early. We want them to be thoughtful. We want them to be specific, but mostly we just want them to apply because as Ricky said, if you don't apply, you [00:13:00] don't know what you're going 

Scott: to get.

Absolutely. It's again, one of those questions is like, if you don't ask, uh, they can't tell, you know, but they also can't tell you. Yes, 

Jana Kay: correct. Yeah. And you know what, what we find with a lot of students, they don't know what questions to ask. And so, that's one thing I really want people to know, is if they are interested in getting a college degree, just come and talk to us and say, this is what I want to do, and we'll help them with the rest of it.

They don't, we, we know what the biggest concerns are and we know what the resources are. Exactly. 

Scott: That's why we brought you guys in the experts in this field. If you want the right information, you go to the people who have the information who can help you out through these processes and give you the best answers.

And again, like you said, if you don't know what the questions are to ask, you can help fill in those blanks as well. Absolutely. 

Ricky: I always tell students at the same time, don't be shy. We were that age too. We were there. Okay, we're here to help. And my thing is, I don't want to just answer the questions. I want to [00:14:00] educate the students because overall education of how financial aid works makes the bigger decision for them throughout our whole education.

So it's not a one stop shop because you do have to apply for these. 

Scott: Okay. Now you mentioned obviously that first deadline for the WSU, uh, January 31st at 11 59 PM. What other deadlines are we talking about? I know previously we had had a conversation where you're saying there were, uh, I believe some other deadlines that were, that were somewhat fast 

Jana Kay: approaching.

Yes. And, um, Ricky talked about the FAFSA, the Free Application for Federal Student Aid. There's also the Washington Application for State Aid. And we want students, usually that deadline is January 31st as well, but the FAFSA is being revised this year. And it's going to be released later. 

Scott: So, so once again, another good reason to, uh, come in and visit you guys, because I had no clue that those things were being revised.

Jana Kay: And they, it's, we think the revisions will be [00:15:00] good. It's a simplification project, so hopefully it'll make the application easier. Usually the FAFSA is available in October. It will be released sometime in December. And so we haven't actually seen it yet and students can't apply yet. But our internal deadline is we want new students to fill that out by February 15th.

So they can be considered for institutional grants, like our Cougar Commitment Award for students who may qualify for some Pell, but not all the Pell. We can make up the difference. with WSU money, but they have to meet that early deadline to be considered. 

Scott: Gotcha. Now both of you have thrown this, this term out a couple of times, Pell, let's talk about what that is.

A Pell grant, if I remember correctly. Yeah. 

Ricky: So Pell grant or in a form of grants in general is just money that a student may be eligible depending on need. That they do not have to pay back. Okay, 

Scott: the best type of loan. Absolutely, 

Ricky: that's always going to be the first one. That's the one that I always tell [00:16:00] students you want to utilize.

Yeah. So, of course, if it's available to you, take it. Depending where you're actually attending school, depending will be how it will be dispersed out to students. Okay. 

Jana Kay: So. And that's anywhere from 692 an academic year up to 7, 395. I was going to say 

Scott: those are very specific numbers. Yeah. Like 692 and 13 cents.

Exactly. How do they determine or do you know how that, that range is determined? Yeah. 

Ricky: So that's part of the FAFSA application. So when you do fill it out, they're going to require a course, you know, parents information if you are considered a dependent and household size and of course income. So once you start filling it out, this up and coming time it will not provide you with the information automatically because parents do need to actually give their consent for their information.

Okay. And that information is sent to the schools that you list on the FAFSA and us in a financial aid side. We're gonna work on the back [00:17:00] end to kind of figure out those numbers to provide to students. So, it will take a little bit longer for you guys to get those numbers, but we are working on them on the back end.

Changing the date because, hey, things are being changed around as well. 

Scott: And also, again, another good reason to get those, uh, deadlines ahead of time, get your stuff in before the deadline, because there's more work than just you turning it in and somebody looking at it and saying, oh, here you go. 

Ricky: Exactly.

The proactive. I tell students be proactive about it. You don't have to wait on us to find out. You can always check online to find out. You can be active about it yourself. Be responsible. Make sure you get those in time. Because at the same time, not every message is going to come your way. 

Scott: Now, so we were talking about some grants.

We've talked about, uh, some of the other, uh, financial aid that's available. Have we not covered any of the general categories yet? 

Jana Kay: So I just want to add that there's, there's the Pell grant is a federal grant, but Washington state also has a Washington college grant [00:18:00] and Washington is actually the third.

in the nation for the amount of financial aid that it disburses to students. So 

Scott: Washington state is very focused on higher education, making sure that people have access to universities, colleges. 

Jana Kay: Absolutely. Um, Washington has disbursed two billion dollars in grants for this academic 

Scott: year so far. Just this year?

Jana Kay: Yeah, just this year.

Scott: After recording this episode of dollars and cents, Jana got in touch with us with a correction. She said, as you just heard that Washington state had given 2 billion in financial aid so far this year. And that correction here is that, uh, that is actually the amount of giving the California had done at number one in the nation.

Washington state is still number three in the nation, but the giving that they have done so far this year is 200 plus million dollars.

Jana Kay: just this year. And the, when students fill out the FAFSA, They are also applying for Washington College grant. And so it's one application. And then there's a separate state application for students whose, their immigration status doesn't allow them to complete the federal application. Okay. Correct.

And so, uh, there's grant opportunities available for a range of students. 

Scott: And I want to point out that the, the numbers that you just threw out were just Washington State. That is correct. That means that Oregon, Idaho, Utah, all of these other locations most likely are [00:19:00] also doing some sort of money depending on where you're at, uh, whether or not, do we know if, if these locations are specific to residents of those states?

Yes. Okay, so if you're in Oregon, like looking into what Oregon can offer, if you're in Idaho, looking into what Idaho can offer. 

Jana Kay: And they'll be considered, students are considered for those state awards. through the FAFSA. Okay. Not every state offers state aid for students who can't fill out the FAFSA.

Okay. So that would, that would be different by state. But Washington, the Washington grants range from 1, 154 an academic year up to 11, 284. Which 

Scott: is, uh, Pretty close to the tuition number tuition 

Jana Kay: that you threw out earlier. Tuition. And if a student is eligible for the full Washington College Grant, there's a good chance they're eligible for a full Pell grant.

Absolutely. Yeah. So, so 55% of our students don't pay any out of pocket [00:20:00] in for tuition expenses. That is an impressive number. Yeah, it's impressive. They're getting, you know, some students are getting up to 19 to $20,000. Correct. In federal, state, and institutional aid. So 

Ricky: they have an excess in funds that is actually.

Um, entitled to them and that can be dispersed to the students to help them out with extra expenses 

Scott: for school such as top ramen and mac and cheese. You know 

Ricky: what? It might not be top ramen if they get that refund, you know, 

Scott: absolutely. Maybe their mac and cheese will have some cougar gold in it, 

Jana Kay: but just, I do want to acknowledge if we, if we have students who are qualifying for that much financial aid, they're sacrificing a lot to be in school and if anything goes wrong, the wheels can come off.

And so it's really important that we're working with them on it. and how to manage their money because often this is what they have. And so we want to make sure they're using it. And then also that means that the rest of our students are paying out of pocket. And that's why we really want to encourage [00:21:00] students to fill out the scholarship applications to supplement what they might not be getting in grants.

Scott: Find some more. private funding or, uh, I guess public funding as well for those things. Or, uh, we did mention, uh, I did kind of tongue in cheek mention, uh, independently wealthy, uh, and granted, we're not going to go to that point because those people don't really need to be too concerned about this.

However, uh, parents. Uh, most of the states do have what are known as, uh, 529 college savings plans available. I know the state of Washington has, uh, two separate programs. The Guaranteed Education Tuition or the GET program here in Washington state is a, uh, savings program that is kind of unique. It's only for residents of Washington state.

They can, uh, buy in either on a, on a, uh, Pay as you go type of a plan or on a monthly contribution. The contributions actually by, uh, what they refer to as units. [00:22:00] And if you have 100 units saved up, that is the equivalent. When you withdraw those of 100 units is equal to the highest tuition of a college in the state of Washington.

Okay. So with 100 units, you can pay for one year's tuition. Uh, so for a four year program, if you manage to save up 400 units, you can pay for a four year tuition through the get program. Um, that one, uh, from the research that I did, that is a, uh, there's no fees to get into, to get that started. I believe, um, the state website, which is, uh, 529.

wa. gov. If anybody wants to go out and take a look at it for more information, um, Says that you can get started for is as cheap as 25 to get your account started on those in a pay as you go type of a situation, uh, it's considered a tax advantage plan. So you're after tax money goes into this and grows tax free.[00:23:00] 

And that money, while that's a program that is limited to the Washington State residents, can be used for tuition in and out of state for community colleges, as well as trade schools, vocational schools, um, any qualifying programs. But they also created recently a second program called Dream Ahead College Investment Plan.

Which is open to, uh, any United States residents. So, uh, if you're in Oregon or Idaho, Utah, Florida, wherever in the United States, and you want to contribute because the Washington State Plan is a good one, uh, in your opinion, you can go and create a Dream Ahead Plan, which is more of an investment portfolio, uh, looking at stocks, bonds, investments, almost like an IRA.

would be where you can, uh, adjust your plan based on your willingness and tolerance for risk, uh, and, and how you want to go about saving money for, uh, for a tuition. And again, I believe that one, uh, [00:24:00] is also a, uh, tax advantage type of a program and is again pay as you go or monthly contributions. Between the two programs you can, if you are independently wealthy or very committed to this, uh, you can have up to 500, 000 combined between the two programs invested into, uh, tuition assistance in those savings programs.

And if I remember correctly, if you opt not to with the get program, use that for tuition because you have decided that your life path is going to go somewhere other than higher education. I believe that you are allowed to roll that over into an IRA or a Roth. Uh, you would definitely want to look that up on their website to find out for sure what those are.

But you can then roll that money out. So it's not Just stashed away purely for tuition sake if that is if that turns out to not be your route, correct? But this 

Ricky: is we're actually seeing a lot of more of this money come [00:25:00] in not from the parents But a lot of grandparents set these up for the grandkids. So this is a good way for a grandkid Grandparents is set that up.

If your future grandparents to be, hey, start thinking about it because this is actually a great way to actually step in and help out your grandkids for the 

Scott: future. And actually the, uh, the website, when I was looking at it earlier, uh, did actually have very specific call outs for other family members or friends contributing to these accounts to to help out as well.

So obviously not just the parents or whoever opened the account. You can have people, great graduation present birthday presents for the kid. They also had a very interesting statistic on the website that I kind of want to get your guys's reaction to. The statement was by the time your child is in third grade, they're halfway to college.

And my immediate thought on that was like third grade, there's still a lot of grades to go. But then I was like, they spend a lot of years not in school before they get there. So by the time they are aged in third grade, they are [00:26:00] halfway to being a freshman in college. Actual 

Ricky: true statement. Yeah, that's actually correct.

Jana Kay: Well, and one thing, I remember going to a presentation with the local superintendents and they were talking about how up until third grade students are learning to read. And then after third grade, they read to learn. And so third grade is a pretty important age or benchmark for students to know what path they're factoids 

Scott: today on the podcast. I'm loving this.

This concludes part one of our two part episode on financial aid. This has been Dollars and Cents, HAPO Community Credit Union's financial literacy podcast. Please tune in soon for part two.