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HOME » Timely Topics » Step 2 for Seniors: Contemplating College Costs

Step 2 for Seniors: Contemplating College Costs

Posted on 10/04/2018, by Dr. Ellen Fithian (0 comments)

It’s hardly breaking news that paying for college is a major financial commitment. It’s one of the largest purchases most people ever make, yet few families approach their choice of schools with the same careful cost comparison they would give to the purchase of a house or other big ticket item. Indeed, until just a few years ago they couldn’t perform such an analysis.

Before October of 2011, when colleges were required by Congress to place net price calculators on their websites, families didn’t know what each college would cost them until the student was accepted and received her financial aid award letter in April - when it was too late to apply elsewhere. Happily, now you can use these calculators to get a ballpark estimate of your family’s actual - or net - price at each college you're considering.

In a nutshell, the net price of a college is the cost of attendance (sum of all costs, including tuition, room & board, books, fees, etc.) minus any grant money (money you don't have to pay back or earn) you will get from the college. If you're not clear about what net price means or how to use the online calculators, read Net Price Calculators .

How do you use net price calculators to your best advantage?

Compare Costs

Start by using them to get an estimated net price for all the colleges on your senior’s list. Now you can compare estimates of what your family will actually be asked to pay rather than sticker prices (i.e. costs of attendance). You may be surprised to discover that two schools with similar sticker prices have very different net prices for your family due to differences in financial aid resources or policies. However, don’t automatically jump to the conclusion that the cheapest college is the best value.

Pricey private schools sometimes offer valuable services that make the extra expense worthwhile. They might feature smaller classes, more interaction with professors, nicer dorms, better academic or career advising services – any number of things. So as you compare the cost of schools, ask yourself what you’re getting for your money – and how important those features are to you and your child. 

No matter how much you like the school with the 24 hour fitness center, however, you need to ponder whether you can afford it. You’ll want to factor in the answers to these questions:

• Do you have other kids to put through school, and will you be able to spend the same amount on them? If not, will sending one sibling to a more expensive college than another create hard feelings?
• Is it likely that your senior will go to graduate school? If so, what kind? Law, business, and medical school students are much less likely to receive grant aid than Ph.D. students in the sciences.

Once you’ve compared the costs of colleges, you’re ready to tackle a topic that can be uncomfortable, but is vitally important to your child.

Who’s Paying?

Many teens have never been asked to contribute anything to their upkeep. Mom and Dad have paid for their clothes, braces, summer camp, and saxaphone lessons, so it’s logical for such kids to assume their parents will be footing the bill for college as well.

Parents who are able and willing to do this deserve kudos for their industry and shrewd financial planning.  Furthermore, I sincerely hope their teens know how fortunate they are. If, like many parents, however, you won’t be able to write the tuition check out of the household budget or your savings, now is the time to have a candid discussion about these issues:

• Is there an upper limit to how much you are able or willing to pay for a year of college?
• Do you expect your child to take out college loans? How much?
• Do you expect him to work during college?
• Are you planning to contribute to the cost of any graduate program he might undertake? Will the amount you contribute towards college influence how much you can kick in for graduate school?

Dealing With Sticker Shock

At the end of these exercises, what if you and your teen are reeling at the prospect of how much all of you might owe by the time she completes Glorious Gables University and dental school? What should you do?

I don’t recommend crossing the colleges with high net price estimates off your child’s list. First, remember that the estimate is just that, and may not include merit aid, which can be substantial. Second, there’s really no harm in applying to a costly college; if your teen is accepted and the final price is more than you’re all willing to pay, she can always decline. So leave Glorious Gables on your list, but make sure the list also includes schools that are clearly affordable.  If it doesn’t, there's still time now to go back to the search engines and guide books to find some additional colleges.

There’s one last benefit to engaging in an early analysis of where the money for college will come from – it may increase students’ motivation to scout out scholarships. Understandably, after slogging through the tedium of the college application process, many students run out of steam when it comes to searching for – and applying to – outside scholarships.

However, if your senior truly has her heart set on Glorious Gables, knowing early in the process that the price is steep – and that she’ll be taking out loans to contribute to it – may give her the energy she needs to churn out a few more riveting scholarship essays.

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