College too expensive? That's a myth

What about really expensive private colleges? Across the country 15% of students attend private universities where tuition and fees average $31,000, according to the College Board. Georgetown University costs even more: about $50,000 a year. Its president, John DeGioia, told me how Georgetown—and many other so-called elite colleges—help make a degree affordable.

First, Georgetown determines what a family can afford to pay. It asks the student to borrow $17,000 over four years and work 10-15 hours a week under its work-study program. Georgetown pays the remainder—at a total cost of about $100 million a year.

Apart from grants, work and savings, there are federal student loans. We hear a lot of questions about these loans. Are taxpayers generous enough? Is borrowing for college a good investment? Are students borrowing too much?

An undergraduate today can get a federal loan of up to $5,500 his first year. The annual loan limit rises to $7,500 his junior and senior years. The fixed interest rate for new loans this year is, by law, 4.29%. A recent graduate may pay back the loan using no more than 10% of his disposable income. And if at that rate he doesn’t pay it off in 20 years, taxpayers forgive the loan.