What does a four-year college degree really cost?
According to the College Board, the average cost of college for an in-state public college for the 2012-2013 academic year was $22,261. The average cost of college at a private institution, on the other hand, was a staggering $43,289. That’s why considering the cost of college is an essential step in making an admissions decision—after all, just getting into college doesn’t mean you can afford to pay for it.
If you’re worried you can afford college, you’re not alone. Only 25% of American families can pay for college without financial assistance. If you aren’t one of them, the cost of college can be just as important as the school’s quality and should weigh on your decision process.
That said, knowing exactly how much a school will cost you can be difficult. Financial aid applications are confusing to decode, and financial aid award letters can be practically impossible to understand. To better understand the bottom line cost of college (since your cost may not be the same as the average cost of college), so that you can make an informed choice on what college you attend, we recommend the following:
- Run a financial aid estimator to see approximately how much you’ll need to pay—in other words, determine your Expected Family Contribution (EFC). The Expected Family Contribution is the amount a given school will expect you and your family to pay in order to attend.
- Compare this Estimated Family Contribution to the Cost of Attendance at your colleges of interest to judge if you might “demonstrate need” and therefore qualify for financial aid. In other words: if your Estimated Family Contribution is less than the Cost of Attendance, you do qualify for some form of aid. If your EFC is equal to or greater than the Cost of Attendance, you should plan to pay the college bill from your own resources or look into different forms of merit-based aid, such as grants or scholarships. If you cannot pay your tuition bills in full with your out-of-pocket resources, you should weigh your options and consider student and parent educational loans.
- Carefully review the financial aid policies, financial aid application requirements, and deadlines of each college you already have or will apply to.
- Plan to have a personal discussion with the aid counselors at your top-choice colleges. Your initial Estimated Family Contribution calculation is only a starting point. Colleges have their own financial aid policies that can affect your need estimate, in some cases, by thousands of dollars. You should find out more about how these policies are likely to change the amount of aid you will receive before the award decision is made.
- Once you have learned more about your probable need level, ask how the college “packages” their financial aid. In other words, how they combine grants, loans, and work-study. There can be large differences in the “quality” of financial aid award packages from college to college. Things like work-study and grants don’t need to pay back. Certain loans are considered financial aid, but come with the associated debt burden of having to pay that amount back. In other words, the biggest aid award is not always the best one. Focus on the amount of free money, not student loans.
- Keep looking for an available merit aid, within or outside the college. Begin with their financial aid office but continue your search online at places like our Scholarship Center.
Once you understand how much aid you have, you should:
- Calculate whether you can afford the rest of the tuition bill and related college expenses without private student loans. Remember to include extraneous college costs like student housing, college textbooks, room and board, and more.
- If you can’t afford the cost of college, and if you truly think the school is worth it, compare your private student loans online at SimpleTuition.com. It’s important to remember that private student loans should be viewed as the last resort—if there’s another way to pay for the cost of college, do that first. That includes alternatives like federal student loans, getting a job, dipping into your savings, et cetera.
You should educate yourself as a financial aid consumer and not let the process go on without your involvement or understanding. Doing so will help prevent disappointments or financial hardship, and could help you avoid getting admitted to your dream school only to discover you can’t afford it.
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