Thoughts for parents about college costs

One of the difficult parts about researching colleges is that kids have to apply without parents knowing what it is actually going to cost.  You know the listed price (tuition, room and board, etc.), but you don't know how much financial aid you receive until you are actually admitted to the school.  So how can parents assign any kind of financial guidelines to the kids' college search?

If your kids are starting to talk about colleges and you're starting to worry about the costs, here are three basic guidelines to keep in mind.

1. Don’t necessarily eliminate a college based on the cost.

Every financial aid talk I've heard emphasizes how much money is actually available for college.  And the amount of aid you can receive isn't dependent only on how much money you have (or don't have).  The academic strength of the student, her match with the school, and the college's desire to have her on campus can also influence a financial aid award. So while I wouldn't recommend applying to a list of schools that are all out of your price range, don't necessarily limit your list to colleges you're sure you can pay for. 

2. Talk with your kids about the cost of college.

I don't think parents should feel obligated to hide the economic realities of college from their kids.  It won't hurt kids to know how much money is being invested in their education; a student who knows how much his parents are sacrificing to send him to college is more likely to get up for that 8 a.m. calculus class every day during his freshman year.  Don't forget that while parents may be paying the tuition, student loans are taken out in the student's name.  And it will be the student–not the parent–who takes that on-campus job as part of a work study financial aid award.  That’s why college financing is often a family decision whether you want it to be or not. 

3.  Consider picking a financial safety school.

Consider encouraging your student to apply to at least one school where you're sure the student
can get in, you're sure he'd want to attend, and you're sure
you could pay for it even if you got no financial aid.   

How to compare financial aid awards

Comparing financial aid awards from colleges isn't as easy as asking, "Who's giving us the most money?"

We've met more than one family who admitted to being swept up by the total figure in the financial aid award letter they received along with an offer of admission from a college.  When a college says that you've been awarded, "$16,000 in financial aid a year for four years:" that doesn't necessarily mean that you're getting a $16,000 discount off the college's sticker price. 

Financial aid awards can be a combination of free money (scholarships), loans, and work study.  To figure out who's giving you the best offer, you need to consider the total cost of attendance for the college, the amount of free money, loans and their accompanying interest rates, etc. 

For senior parents, the award comparison tool available from Finaid.org is wonderful.  You plug in the numbers; they'll tell you who's giving you the best offer. 

Just remember that the "cost of attendance" (COA) is not just the tuition–it's tuition, room and board, personal expenses, etc.  Most schools list their estimated COA on the financial aid section of their websites.


A website with some merit

I learned about what looks to be a great resource for high school kids today, www.meritaid.com.  The vast majority of merit-based scholarships come from the colleges themselves (as opposed to outside scholarships that come from companies, organizations, private donors, etc.).  And this website seems to be culling that information together so that a student can search for schools and research the scholarships that are available.  You can even create a profile that will generate a list of colleges with potential merit aid that match your profile. 

I would still argue that visiting the schools' individual websites is the only way to be sure you know about all of the scholarships they offer, but you could use this site as a way to narrow down your search.

Thanks to Mary Beth Kravets, a high school counselor and author of this fantastic college guide for students with learning disabilities, for sharing this.   

Not-So-Shameless Plugging

PyforCollege

I did a financial aid seminar for families last weekend and as I revealed to them, I first learned a lot of the information I shared from "Paying for College Without Going Broke."  It helped me make sense of the financial aid process, and I was an English and history major in college who has never once successfully balanced my checkbook.

The 2010 version releases today, and I've already ordered my copy.

As with all previous versions of the book, the author describes exactly how the process of applying for financial aid works, with tips and strategies to increase aid and reduce costs.  But the description of the 2010 edition says that it has also been updated to reflect all of the current economic uncertainty, it will include the latest financial aid forms with guidelines to help you complete them, and it will explain recent changes to the tax laws and how they impact financial aid.    

Whether you're the parent of a senior who needs to apply for financial aid right now, or the parent of a freshman who wants tips on the best ways to save for college, I'd order a copy.