Would you make purchases costing you tens of thousands of dollars without doing comparison shopping? Surely not! Well, make sure your Pre-College Finance Plan includes a healthy dose of such shopping as you and children start deciding which colleges they’ll attend.
This year alone, what students pay to attend postsecondary institutions averages $18,550 at community colleges and $26,820 at in-state public colleges and universities. That’s a lot — so most families can’t send children to postsecondary schools without financial aid and student loans.
Here are some pointers on how you comparatively shop to discover a postsecondary school’s affordability:
Avoid For-Profit Schools — At Least For Now: Donald Trump once paid $25 million to close a lawsuit brought by 6,000 students who sued him for defrauding them through his for-profit school. Not surprisingly, his administration protected similar schools. Although Joe Biden plans to crack down on them, that’ll take some time. So for now, send your children to a community college or state technical institute for technical or vocational education.
Be Careful About High-Priced Private Institutions: This year’s posted Cost of Attendance (COA) averages $43,280 at out-of-state public colleges and universities and $54,880 at private colleges and universities. The Federal Pell Grant maximum is $6,345 and freshmen may borrow up to $5,500 in federal student loans. In most states, non-residents aren’t eligible for state grants and loans so, absent lot’s of institutional and private scholarships, understand you as parents may need to borrow heavily.
Determine True COA: Colleges play games with the COAs they publish. So double check:
- Tuition and Required Fees: These reflect a certain number of credit hours. But students often pay more under certain conditions and for discretionary or “hidden” fees.
- Room and Board: Usually this is an average of what students living on-campus pay. Groceries, rent, and utilities may cost more or less in off-campus apartments.
- Books and Class Supplies: This is typically an average of what all students spend. In certain majors (architecture, art, literature, etc.) it could be more.
- Transportation: Most likely this is for getting to and from an in-state home a few times a year. It doesn’t include costs associated with having a car at school or flying between home and out-of-state schools.
- Personal Expenses: Many schools recognize only limited personal spending. Check this out hard — does it really cover a conservative but reasonable amount per month?
Carefully Consider Each School’s Aid Offer: Have your children been offered “renewable” grants and/or scholarships. If so, study their renewal criteria carefully. Some are a form of “bait and switch;” requiring exceptionally high GPAs and credit hour completion for renewal. Also, understand that most Federal TEACH Grants ultimately turn into costly loans.
Compare Net Prices: Net price represents what you and your children will have to pay by borrowing, liquidating assets or working.
Shop comparatively now to avoid massive debt or other problems later!
Next Wednesday we’ll be posting an article right here about another seldom-considered but absolutely essential issue in shopping comparatively when selecting and affordable college or university. So become a follower of this website to get this and other college affordability strategies.