This is a second guest post from Stuart Nachbar, President of EducatedQuest.com. If you haven’t read his first guest post on college housing options, you can find it here: Think For the Future in Your College Housing Decision.
At this time this year good news, sometimes bad news, is landing online or in the mailboxes of college-bound students across the U.S.
The good news? “Congratulations, you’ve been accepted, and we have some financial aid for you.”
The bad news? Well, you’re not so lucky. Maybe you’re in, but you must borrow or pay for college out of your own resources. Or maybe you’re out.
But wait, there’s more. Suppose you get good news from more than one school, not only about admissions, but also financial aid. After all of the good news comes in it’s time to compare the award letters.
Total Cost of Attendance, for any college, includes:
• The items on your term bill: Tuition, fees, room and board.
• Expenses essential to academics: Books, a laptop computer, software, pens, paper, etc.
• Expenses essential to living: Clothing, laundry, transportation home, decorating a dorm room, entertainment, health insurance (though the college may try to sell this to you).
Colleges either base financial aid on their charges, the things that they can bill you for, against your Expected Family Contribution and your financial need. Or sometimes they use an “average” or “estimate” for the costs that they do not bill you for, and add it to those that are on the bill.
But you may not want to trust those averages or estimates.
Here is what I suggest you do.
1. Take the sticker prices of the items that the school will bill you.
2. Subtract any scholarships that do not need to be repaid. This leaves you with the amount, also known as net costs, that the school will expect you to pay.
3. You can take a rough amount–I suggest anywhere between $4,000 and $8,000,–and add it to your net costs. This will provide your own Total Cost of Attendance.
So, suppose you’ve been admitted to a $60,000 college that charges $48,000 for tuition and fees and $12,000 for room and board and you were awarded a half-tuition scholarship. Your family also lives on the opposite coast.
1. Your net costs will be $60,000 – $24,000 = $36,000
2. Your added costs will be $8,000, making your Total Cost of Attendance $44,000.
It also helps to know if the school has a history of raising its charges for tuition and fees as well as room and board. College Navigator, the college search site operated by the U.S. Department of Education, will give you a four-year tuition and fee history for every college in its database when you click “Estimated Tuition and Fees” for your chosen school. You can use that information to project future cost increases. Just remember to raise your costs, the ones that the college does not bill you, by at least five percent for each year.
College has become the largest investment that most families will make in a lifetime. A four-year degree at a private college, in particular, costs more than homes in many real estate markets. The better you know your Total Cost of Attendance, the easier it will be to plan for those costs.
Stuart Nachbar is President of EducatedQuest.com, a guide to strategic college admissions planning and the best values in higher education.