Each semester, I spend some time in my classes calculating the costs of college with my students. I am always surprised by their amazement when we get to the grand total of a four-year degree. Most of them have not really given the costs of college–in their entirety–much thought and even fewer have given serious consideration to how they will pay for it all.
Too many set foot on campus with their tuition and fees paid for, maybe, and a plan for paying for room and board (ramen noodles, anyone?), and then they are taken aback when they realize they must buy textbooks, supplies, laundry detergent, and snacks for those late nights of studying.
This is all to say that college can be expensive and in many cases, it is not until the student moves in that reality sinks in. That is why it is vitally important for your student and you to start early to figure out the financials of earning a degree before you decorate that dorm room.
Here are seven things you need to consider before making that decision about where your student will go to college:
#1: Sticker price is only the beginning. What I mean by “sticker price” is the published cost of attending an institution. This information can usually be found on an institution’s website where they place a “tuition and fees calculator.” I am including my institution’s calculator here as an example. Colleges and universities are required to offer a calculator for prospective students and their parents. You will also want to look for an institution’s published “Cost of Attendance,” because in addition to tuition, fees, room and board, the institution may also provide information about estimated variable costs such as transportation, textbooks, or other expenses.
Don’t be afraid to look at the total amount at this point. We will talk about net price later. And don’t be deterred at this point by high prices, especially those from private colleges. The only amount that matters in this process is what you end up paying.
#2: Net price calculators can give you a reality check. Once you have picked yourself up off the floor after checking out the cost of attendance, look for the institution’s “net price calculator.” I am again including an example from my institution here. This calculator may take more time to use because you will have to answer questions about your student’s high school academic record and your financial situation. It is not as thorough as the FAFSA, but it can give you an estimate of what you may pay (cost of attendance – financial aid = net price).
#3: Financial aid options should be a part of the comparison shopping. While the net price calculator will not be able to tell you if your student will win a prestigious scholarship, hence making the college affordable, you can and should look at what the institution offers in terms of merit and need-based scholarships. Many colleges and universities offer scholarships to incoming freshmen as well as current students. They may also offer grants, work-study opportunities or on-campus jobs, and other options for paying for college. A call or email to the financial aid office can shed light on the issue.
#4: Comparison shopping can provide perspective. Once you have gathered information about cost of attendance, net price, and financial aid options, you can set up a comparison sheet much like the one here: Costs of College Comparison.
I used this spreadsheet as my daughter was applying to schools. We updated it with scholarships earned as well as contributions from the family that we were willing to provide. In some cases, the institutions that seemed the most expensive, and out of reach initially, were actually the more affordable options when we factored in scholarships and loans.
#5: “Hidden” costs should factor in your budget. A discussion about the costs of college is not complete without an estimate of other expenses that may arise. Edvisors, an organization that offers information about financial aid, provides a thorough checklist that factors in the costs of holiday breaks among many other things! For sure, your student will need some spending money to replace school supplies and to keep the laundry clean. Consider starting with a budget and making adjustments once your student gets a few months into the semester.
#6: The family should have a dollars and “sense” conversation. This is probably the hardest part of the process: Talking with the entire family about what you can and cannot afford. It is perfectly fine to be practical, reasonable, rational, and financially savvy about affording college. The decision needs to make sense to your own long-term goals as well as your student’s.
#7: The long-term investment of college and what that means to your family should be a consideration. And no conversation is complete without looking at the bigger picture. What will a degree from the college or university mean for your student and your family? Are there plans for graduate or professional school? Will the proverbial belts be tightened for a few years? Will you expect your student to contribute something during the college experience, even if it is not initially? All of these questions should be broached and revisited as your student moves through each year.
If there is any advice worth emphasizing it is start the conversation now and include your student in the entire process. The more you know before your student goes to college, the better prepared they will be when they get there.
