<p>Hi CC folks,
My DD and I are now going thru the heart-wrenching experience of determining how she might attend her choice private school, and trying to estimate the full cost of college.</p>
<p>1) We've added 5% increases for school (tuition/fees/room&board/books&supplies) annually. Do Scholarships and Grants and Loan offers also typically increase annually?</p>
<p>2) Do grants often "dry up"? Another second school is offering a very generous grant, but how do we know that will be offered in later years?</p>
<p>(A bit of background: We're "working class/middle class" and my business had a terrible net loss last year, and work is barely on the mend. I've saved into a 529, but it's not nearly enough. She'd have to take on a part-time job in addition to Work Study...)</p>
<p>Gosh, this is such a bummer. Thanks for any advice!</p>
<p>Scholarships don’t usually increase (I’ve never heard of any increasing). They also often come with some requirements - like maintaining a certain GPA. You need to check with the school on this. Grants can change too - and are likely to change if your financial situation changes. So having the big loss last year helped with the grant this year. If you have a good year, or even not such a big loss this year, and next year - the grant could significantly drop or even go away. My S got a good grant ($11K) this year for one of his schools - but I know that my financial situation will be different next year (1 in college instead of 2). I called the school and asked them the likelihood of him getting the same grant next year and was told it would probably all go away but maybe he would get $1K or so going forward. We had to take them off his list.</p>
<p>If it is an issue, you should call and question every bit of the award package, and go over the information with your student so that both of you are very much aware of what it takes to keep the money. Quibbling whether it’s an overall gpa or a semester’s is a moot point after you lose a scholarship that stipulates the terms. Better you know up front. Know which awards are financial aid and subject to income fluctuations. A lot of people have no idea whether their students’ packages are aid or merit based and which portion is which when they are mixed. </p>
<p>Also if a merit award is lost, would the school pick this up in terms of financial aid awards? Even those schools that guarantee to meet full need have exceptions notably for transfers, internationals, waitlisted students, those who did not apply for aid first year, and for upper classmen, at times. So do find out what a school’s policy for financial aid covers, that is, in terms of upper classmen.</p>
<p>Find out what the true COA estimate that the school uses for PLUS maximums. That is an official estimate the school submits to the government for full coverage reasons ALso ask for prior year tution and room and board increases. No telling what the future is, however but it can give you some idea as to what others faced n prior years Also ask financial aid directly what the increase in student expected contribution is each year. Most all schools do increase this amount each year as they expect the student to contribute more as they move up in seniority.</p>
<p>Some scholarships do increase in value as costs increase, but it depends on the individual school and the individual scholarship. If a scholarship is listed as a set amount (i.e. $5K per year for 4 years) you shouldn’t expect that to change, but if it’s listed as a “full tuition” or “difference between IS and OOS tuition” it very likely may increase from year to year as those costs fluctuate. Our D1’s scholarship package currently contains both of these types of schollies, and the IS/OOS scholarship has increased to accomodate the new rates for this current year and will in future years as well.</p>
<p>As wolverine notes, merit scholarships tied to a particular benefit (tuition, room, board, fees, etc.) often do increase when the cost goes up. This is the way my daughter’s scholarship works.</p>
<p>However, I get the impression the OP is asking about need-based aid. That can go up or down year-to-year since it is based on costs and family income/assets. If the school doesn’t change their aid formula, and your income/assets don’t change, then aid may indeed go up to cover additional costs (such as at a “meets full need” school). There are a lot of variables to consider.</p>
<p>You’ve been given sound advice on the fin aid side of things (%age scholarships will keep pace with increases, set dollar amounts might not; need-based aid can fluctuate), let me address the COA.</p>
<p>We often advise students that by being frugal, they can come in under budget (spend less than the colleges COA). I’ve not had that happen. Here’s why. In my d’s major, most students will keep their books to study for boards, so picking up used books on Amazon hasn’t been doable for major courses. Course fees always run in excess of the standard fees. Again, the issue is the major. It’s an expensive one, so lab and testing fees are added on. For two summers in a row, summer school has been necessary. The first was the result of changing majors and needing a summer class to stay in sequence. The second, however, was the result of schedule conflicts. The choices for the ONE gen ed d still needs were all at the same time as the major classes. It was an unlucky break. Had d needed a different gen ed, she might not have been in that situation.</p>
<p>So, whenever you’re trying to figure costs, I would say use at least the published COA and then add a few thousand dollars a year to it. My experience (and I know the fallacies, anedotal evidence, small sample) has been that college will cost more than the fin aid books says it will.</p>
<p>Good advice Ordinary - Yes, parents should try to avoid a college where they can just barely make the numbers work, because of unexpected costs. I read of one upsetting story from a low income parent who was just barely able to make college financing work for her son - but then had trouble replacing his laptop after it was stolen.</p>
<p>A lot of times it isn’t that things come up with the college, necessarily, but life in general. A car needing to be replaced, a roof or a flooded basement. Medical issues. Dental issues. They happen all of the time and do not take a time out because you need to pay college costs. In fact, that seems to put the gremlins into overdrive in torturing us with expenses when the budget is made out and we are toeing the line ever so carefully.</p>
<p>Every single one of your responses is useful, thanks so much CC folks!
–We did contact the wonderful school (U of Puget Sound), and the merit scholarship’s requirements mean that it can easily be recurring. You suggest it will stay at the same figure.
– The grant is an unknown, based on my inconsistent income/assets.
– The mention above of various other increases, such as Student Expected Contribution, Additional Semesters (!!!), Unexpected Costs of Living Life On The Edge (!!!)… are so true…
– One possible reduction: living off campus the last 2 yrs and eating Ramen Noodles.</p>
<p>So another Q from me is: DD’s package included $7500 in loans annually. That’s $30,000. Is this a standard debt that students graduate with? It just seems absolutely gigantic to me.</p>
<p>(I cannot let my (undeclared major) gal into the world with a debt she cannot repay. So the next step is to determine that price breaking point for me/her. ) Thanks all!</p>
<p>The loan is on the high side. Usually what is considered “standard” are the Stafford loans in the amounts of $5500/6500/6500/7500 over the 4 years with some of them subsidized. The first year $3500 is subsidized so that none of that amount is accruing interest until after graduations. However, anyone taking the full Staffords is getting some interest accrual since the entire amount is not subsidized. So, in this case we are talking about owing $26K plus the interest accrued (at about 7%) on the unsubsidized amount by the time a student graduates.</p>
<p>I don’t know what the make up is of her loans. One can also be given Perkins loans which are all subsidized up to $5500 a year. If she is being given $3500 in subsidized Stafford and $4K in subsidized Perkins, theoretically that $30K will be comparable to the $26K+ that someone taking out the full Staffords would be taking, especially since the Perkins loan rates are lower than the unsub Stafford (and what will likely be the subsidized Staffords if Congress does not act this summer to keep the ultimate interest rate for them where they are for current students). </p>
<p>The problem with “theoretically” is that most schools will increase the loan amounts each year. That’s just the way they work the student contribution. Each year the student is expected to be responsible for more. That’s sort of a reason why the Stafford limits go up each year in the amounts allowable to be borrowed. Also, school costs have been rising each year. There is also the kicker that Perkins are scheduled to expire in 2015 and who knows what, if anything, is going to replace them. </p>
<p>To throw some more things to research your way, check out what the off campus housing situation is for the school. Most kids are hot to go off campus, (much to my chagrin) and some schools have a lot of cheap digs for them nearby and that’s what most of the kids do. If that’s the case, some real savings can be realized. That was the case for me. I can’t say i was thrilled with what they chose as living quarters, but the prices were low, though not as low as they claimed after paying utilities, 12 vs 9 months rent, buying furnishings and other needed things. But at some schools, there is no savings–you just are not going to find anything nearby at anything close to the school dorm prices, whereas in some areas, cheap housing is abound. You have to check out the school and what the kids are paying in the off campus apartments and how many of them are going that route after freshman or sophomore years.</p>
<p>Good luck with the calculating.</p>
<p>Cptofthehouse, thanks so much for your thorough note. We just accounted for higher interest rates and looked at off-campus housing costs for years 3 and 4. </p>
<p>We also just discussed community college, but I read on CC here that schools often don’t give good fin aid packages to transfer students (preferring to focus on incoming freshmen).</p>
<p>I’m also emailing schools to ask about Grant offer specifics. Still trying to make the math work!</p>