One of the most challenging parts of being a parent of a teenager is deciding who is paying for college. How much will college cost, and how much should you ask your student to pay for himself (or herself?) Before you make any decisions, you’ll want to calculate out how much college is really going to cost you, how much financial aid you can expect to get, and if you have utilized all your options.
How Much Does College Cost?
When calculating how much college will cost you and your student, you need to make sure you include all of the following expenses.
Colleges charge per college credit, so your annual tuition costs will also be dependent on how many credits your student takes each semester. Determine how many college credits your student will be taking each year and then multiply out the cost of the tuition for the year.
Check to see if there’s a difference for in-state and out-state tuition or if your child qualifies for any sort of discounts. In some cases, it may pay off to wait a year and establish residency in a particular state before your student enrolls for college.
Books and Supplies
Your student will be responsible for all books and supplies, which can include online subscriptions to resources or lab costs.
Room and Board
Your student needs a place to live, right? Check into expenses for living on campus in the dormitories, off campus in nearby apartments or sorority or fraternity houses or other options (a relative or family friend, perhaps.) Compare these expenses to that of living at home and commuting (including the cost of a car, gas and the required insurance.)
Travel and Miscellaneous Expenses
Your student will still need health insurance, new clothing and shoes, travel money and other miscellaneous items, right? Calculate out what a reasonable budget might be for these assorted expenses.
College Cost Shortcuts
For a general estimate as to how much a particular college usually costs the average student, use this free online calculator provided by CNN Money to estimate college expenses at specific colleges.
How Much Financial Aid Will My Student Get?
Once you’ve got a good idea of how much college will cost your student, you’ll want to look into financial aid options. Explore everything from scholarships, grants, work-study programs, co-ops, campus jobs and student loans. You can get an estimate as to how much financial aid you will qualify for by filling out a FAFSA forecaster form. This will help you find out what schools (and the government) thinks you should be able to afford to put towards college. You probably won’t agree with the numbers, but this will give you an idea of what colleges will offer in the form of financial aid.
Keep in mind not all financial aid is equal. Educate yourself on the difference between loans, grants and scholarships so you’ll know ahead of time which types of financial aid are essentially free money and which are loans you’ll have to pay back.
College Costs You May Not Have Considered
When evaluating colleges, you are probably looking at the posted averages (on the college website) and the financial package the college has offered your student. There are several factors you will need to consider so you will have an accurate estimate of how much college is going to cost you and your student.
What if Your Student Takes Longer Than Four Years to Finish College?
You’re probably calculating college costs under the assumption that your student will finish college in four years. Most college students change majors three times before they graduate, meaning it is very likely that your student will take more than the projected four years to finish college.
Your student may also need to take fewer credits per semester in order to perform well academically, lengthening his or her college experience. That increases your room and board costs, along with several other expenses (insurance, travel, clothing, miscellaneous.
You’ll also want to take into consideration the possibility that your student will pursue an advanced degree or go to professional school (law school, medical school.) Keep these possibilities in mind as you discuss financial strategies.
What if You Don’t Qualify for Financial Aid Every Year?
You might get a great financial package offer from that private college for your student’s first year of college, but you will need to reapply (and qualify for) financial aid every year. Many parents are surprised when they are offered less financial aid for their child’s second, third or fourth years of college.
Several factors influence how much a college offers in financial aid.
For example, let’s say you made $35,000 last year, so your child qualified for a large financial aid package. If you make $50,000 the next year, your child will qualify for significantly less financial aid the next year.
Or lets say the college of your choice received a large endowment this year and was able to offer generous scholarships this year. If the college’s endowment investments under perform (remember 2008?), the college might not be able to offer the same level scholarships that next year.
Calculating the True Cost of College Summary
You’ll need to allow for wiggle room as you estimate how much you’ll be paying for college. To avoid nasty surprises, you’ll want to estimate conservatively and be prepared for the numbers to shift over the course of your student’s college experience.