<p>I'm seeing this question repeatedly, so I thought I would quickly outline one common method of comparing financial aid packages. This will work for need-based or merit-based aid, doesn't matter. YMMY; you may prefer to think of things differently.</p>
<p>For EACH school, find and list the following info--
Direct Costs: tuition, fees, room, and board. This is NOT the same thing as COA (Cost of Attendance). Ignore the final total on your aid letter and add up only the amount that you expect to pay to the school.
Grants/Scholarships: add up all grants (need-based) and/or scholarships (merit-based). This should never involve the word "loan" or "work."
Direct Bill: Subtract Grants/Scholarships from Direct Costs. This is the amount you should expect to pay to the school. It is NOT the total cost of college.</p>
<p>Now, you need to determine the indirect costs. Books and personal expenses should be a standard amount. Personally, I like to assume that federal workstudy will cover personal expenses, but you can make your own determinations.</p>
<p>Standard Indirect Costs: books and personal expenses. Does NOT include transportation, which is the next line--
Transportation: I give this a separate column/line because it is an indirect cost that will vary with college distance. If your college includes an estimate for transportation, round it up to the nearest thousand (because it will usually cost more than they think it will cost). If no estimate is given, you'll have to do some research. Determine how much gas, bus, train, plane fares will cost, times however many trips you'll be making.
Total Indirect Costs: For each college, add up standard costs (books+personal) and variable transportation costs.</p>
<p>Total Cost: Add Direct Bill and Total Indirect Costs. This is how much each college will cost you each year, including loans.</p>
<p>Next you should think long and hard about which loans you want to accept. Subsidized loans are good because the government will pay interest while you're a student; the rest is just a fancy way of deferring YOUR payment. For comparison purposes, you will want to compare the Total Costs of your various schools.</p>
<p>I have made this suggestion a couple of times. If you are seriously considering a college, especially an LAC and have a decent fin aid package, call up the finaid office and ask to speak to someone in charge. Go through your package line by line and ask what that the package will look like in years 2, 3 and 4. You may well find that the package that looks best in year 1 will not be the best in upcoming years. COA increases every year, often by 5%, that’s $2,000 at many colleges. At most non-100% need based colleges, or schools where aid is merit based, the applicant will be picking up those increases. You’re going for 4 years not just one.</p>
<p>Keil - thanks for this reminder. I have a great spreadsheet but it’s using COA which really will vary based on some schools so I think I’ll separate out transportation, etc and look at it that way so I know which costs are immediate and which ones are more flexible in some ways.</p>
<p>I’m not sure if this is applicable for middle- and upper-income homes, but I think it’s a mistake to look solely at the financial aid package. Of course it’s important to consider the total cost over four years, the variance of scholarships, GPA requirements, etc. However, it’s also important to look at other financial support for students. Some schools have a study abroad fee, for example; others not only cover study abroad but buy plane tickets for their students. Some schools have free or subsidized programs for the fall, winter, or spring break; whereas others go as far to close the residence halls and ship kids home whether they want to go or not. Some schools offer satisfactory meal plans, whereas others are going to leave even girls like Keilexandra (you know the type, small, skinny, yogurt for breakfast) hungry. That kind of thing needs supplemented. What about laundry and printing? These differences may or may not add up to a lot of money, but if the difference between financial aid is <$5000, they can turn the tables.</p>
<p>Also consider housing options. Would it be cheaper to live off campus (consider a car will be needed and there may be parking fees)? My DD moved from a dorm room to an ON CAMPUS 3 bedroom townhouse. Granted it was older than the pretty new fully furnished on campus townhomes. But this older unit had a full basement, including laundry room (she bought a used washer/dryer for $100 and we are currently using the washer since ours broke). Utilities were included, she had much more room and we saved about $2000/yr. No charge to keep her car on campus at her apt. If she wanted the pretty new apt unit, she had to pay the difference so of course, she agreed to the older one. Furnished it with used stuff (lots of it was free), much of which she sold before leaving campus (for example, she sold a sofa, a large projection tv, microwave and desk that she got for free and used for 3 yrs). She had easy access to stores so grocery shopping (cooking) was not a problem and cost considerably less than the meal plans. </p>
<p>She also received additional merit awards from her dept throughout the years so although the tuition/apt costs increased each year, bottomline stayed about the same. So look to see if your school offers scholarships to upperclassmen and if so, APPLY. I had no idea these options existed so we were pleasantly surprised.</p>
<p>On the other hand, my son’s school doesn’t have these options (all housing costs the same, regardless of where you live), off campus is expensive, he doesn’t own a car and there’s no parking on campus anyway, he has no interest in shopping/cooking, no merit awards available, and costs keep rising. </p>
<p>We’re beginning this process with #3 kid and this time I will be looking at all these little details.</p>
<p>^^For comparison purposes you have to make some general assumptions. This is what OP has done. As you point out, you also have to recognize where the assumptions don’t hold and factor that in if it is significant. Probably the biggest erroneous assumption is that every year will look like the first year. There can be profound differences from year to year.
The number of kids in college may vary. You may have 2 in college the first year, 1 in years 2 and 3, and 2 again in year 4.
Loans typically increase after year 1.
Assets dwindle. If a family starts with $100K in assets and uses $15K per year, EFC should decrease as assets decrease. (If assets are below the exclusion amount, decreasing assets won’t make a difference.)
college costs will increase 4%-6% each year on average.</p>
<p>Often times ball park figure are enough to tell if A is less expensive than B, but there may be 2 or 3 colleges that require a detailed look to determine if significant differences exist. While I don’t think the lowest cost college (after fin aid) should automatically be chosen. I do think students should know the cost differentials and be able to say, “it is worth it to me to spend and/or borrow X thousand dollars to attend B instead of A.” If it’s not worth it, choose A. “Worth it” is usually highly subjective.</p>
<p>applicannot, we’ve eaten breakfast together at Scripps so you KNOW I eat more than just yogurt. :rolleyes: But I agree that, especially for lower-income students, the details are important too.</p>
<p>One assumption I did make was based on my own experience–i.e. comparing residential LACs. I had no wish to move off-campus or to bring a car. If those expenses matter/exist to YOU, it should be accounted for, of course.</p>
<p>The other major assumptions I made were no overlapping children (which makes it extremely difficult to predict costs because you don’t know what kind of schools and packages the second child will get) and consistent package changes across the next three years. That is, most schools will increase loans by the standard Stafford limit raise, so if all of your schools packaged max freshman Stafford loans, it’s reasonable to assume that they will continue to package max upperclassm Staffords.</p>
<p>Haha. I had belgium waffles there. YUM. Also, I need boiled eggs. Protein! (I don’t think I ate brekki with you guys though…)</p>
<p>Anyways… I did worry about meal plans. I’m such a grazer, and the idea of having a set amount of meals seriously bothers me. And I’ve seen a few articles about college kids & meal plans gone wrong, and I would just rather have it rolled right in with room&board and never have to worry about being low on points or something.</p>
<p>I’ll also add that my school warns that my first work study paycheck won’t come in until the end of september. So while it may cover some personal expenses and maybe second semester books, it won’t be covering first semester books.</p>