Hi everyone! The more I look into colleges the more I realize I don’t know anything about the process. I am the first child going through this process and my parents don’t know much either (neither attended college) Can someone explain the process to me with focus on the money. I don’t understand how loans work nor don’t know how I should figure out the max amount my family could spend of college. I am heading into senior year so I really need to figure this out. Thanks!
Money is something that you will want to take into consideration.
Every university in the US has something called a “Net Price Calculator” (NPC) that you can use to try to get an estimate of what university is likely to cost you. The total cost of attendance can vary enormously from one school to the next. If your parents are married to each other, and do not own a small business, farm, or rental property, then the NPC is likely to be relatively accurate. Your parents will need to enter quite a bit of information, much of which will come from last years tax return or from their paychecks and bank statements.
Do your parents know how much they think that they can afford to spend for your education?
The problem with loans is that you need to pay them back, with interest. The interest starts building up quickly after you graduate. Also, most new university graduates are not making much money. As such it is best to minimize the amount of loans that you take out as much as you can.
In many cases in-state public universities are the most economical. This is however not always the case. If you are an exceptionally good student, there are some highly ranked (and very demanding) universities that are able to offer substantial need based financial aid to students. Also, some universities offer merit based aid to students.
In our case, without qualifying for any need based aid, the total cost of attending a university varied from about $75,000 per year to about $15,000 per year. The academically strongest school that either daughter was accepted to was one of the least expensive, the next strongest was the most expensive. There is really a huge range. If you qualify for need based aid, there will still be a huge range but which specific schools end up at each end of the range may differ. As such it pays to look around.
Make use of your local library. There are books that with give you overviews of the process, and other books on more specific topics from financial aid to writing essays.
Learn about the FAFSA and make sure your parents do too. They will be expected to complete it themselves or help you complete it, and it requires some gathering and sharing of very personal information. Parents who aren’t familiar with this form are often hesitant to share this information with their student, but it is vital that they cooperate on this. It takes about an hour or two if you’ve got everything organized (tax returns, bank statements, etc.).
Here are some simple things you should know.
-There is a formula school’s use to determine “how much” of the money your parents “make” each year can be used for your college.
-this is called the “family contribution”.
Ie. School is 40k gross. The believe you should be able to pay 5000 per year. You pay the 5000.
-every school can be a little different.
-Some colleges use the FAFSA form, some also use a supplement form called a CSS.
- Both are used to determine the amount you have to pay.
- Some schools give you direct aid, work study options and school loan programs.
- some schools offer students they deem to be highly attractive as a candidate an award called “merit” based aid. This is a scholarship and may have rules about grades you must maintain to keep it in place all four years. This is not necessarily based on income. It’s about your stats.
If you are admitted to a school they will send you a financial aid proposal - people will refer to this as your “package”.
It will outline how much and how it will look as a proposal.
-If after you receive the package it is still not enough you can look to some loan programs.
-For federal student loans it is limited. Year 1 5500 year 2 6500 year 3 and 4 7500. The rates are artificially lower than many. You don’t have to repay until you complete or drop out of college. You have to pay this back in the form of monthly payments. This is a loan to you, not your parents.
-There are other types of loans available to your parents and you with a co-signer. Some of these you can have much higher rates and early start dates for the payments.
-These loans are by far the “money of last resort” and generally should be avoided if possible.
To determine how much you will get in aid and thr total cost for your family each year. That is why you should use the calculators on the schools website, as mentioned above, is called a NPC. Net price calculator.
- “Net” means how much something costs you after deducting the “rebates” form the total costs (“gross” costs). In the case of college costs, these rebates are known as “financial aid. “
- you need a lot of important information from your parents to fill out the NPC. Accuracy is critical!
-Do not apply to any school without doing this step of running the NPC calculator. A school you simply will not be able to afford should be immediately taken off your list. Imho. It will create unneeded anxiety and regret for you.
- private colleges are generally most expensive before aid. many times they offer the very best aid or will pay 100 percent of what is needed.
-oos public universities are also very expense. They generally have poor financial aid for students outside of their states. In some cases making them much more expensive than a private college.
-in State public’s are usually the lowest cost for an instate student and they will also offer financial aid. So it’s low to begin with compared to the other types of schools.
-community college for the first two years and transfer to a four year school as a junior is often a very savvy economic decision.
-get your parents involved right away.
-don’t forget to think about the costs of travel to and from a school. Don’t forget the costs of books. Don’t forget the necessary money that’s needed for things like shampoo, laundry, activities, pizza and other expense.
A lot of people^ who haven’t done thorough research will claim out-of-state public universities will be expensive. Some are, but there are actually plenty of public univerusities that are a bargain, via low tuition, merit scholarships, and/or tuition waivers–you just have to know where to look for them (hint: they tend to be in the South & Midwest, not on the west cosst or in the Northeast).
Hi. @moooop
Think something is being lost in translation. ^^^. But your point is well taken.
I was comparing to the cost as expensive compared to their in state public options and meets full need private’s.
Of course there are bargains available. But this was a rule of thumb guideline as someone is first approaching financial matters of college. It was a continuation of the previous post which was to do careful research of course.
The UCLA etc examples.
Lost in translation? How 'bout this: you are incorrect.
There are too many exceptions for it to be a useful rule of thumb. Alabama, Florida State, Oklahoma State, Nebraska, Texas Tech, Mississippi, Miss State, Kansas State, iowa State, South Carolina, W.Va, S. Dakota, South Dakota State etc etc. There are numerous public colleges everyone has heard of which have low sticker prices, merit scholarships for out of staters, &/or tuition waivers which can bring the net price down to something in the vicinity of some states’ in-state prices. Of course some on cc aren’t quite sure these places have indoor plumbing & cell phone service, so their research is something like, “Hey, UCLA and UMass don’t give oos folks a break, therefore oos publics are expensive.”
What is your problem? Relax , I’m totally agreeing with you.
But In state public’s vs oos public are two different things. Private’s are more expensive than both unless you’re merit qualified or accepted to meets full need and low efc.
Even the ones you mention are better deals for the in state student.
And there are thousands of public schools. Most aren’t less inexpensive than their home state option but are naturally less expensive as a starting point than a private school because of the lower base costs.
And all require due diligence.