Estimating Your Child’s Cost Of College

College Student Loan

Going to college can be one of the best decisions your child can make for his or her future. It can also be one of the most significant expenses you and your child might ever face. However, the good news is that approximately two-thirds of college students receive grants to help cover some of the cost.

And that’s why in this article, we’re going to take a look at some average annual costs of attending a number of different types of schools, few of the ways you might reduce these costs with grants and scholarships, and means through which you can estimate what your child’s real cost of college or net price would be ahead of time. So first, let’s take a look at the total cost of attending a college.

Total Cost of Attending a College

When we talk about the total cost of attendance, we’re talking about ALL the expenses, which includes tuition and fees, room and board, and other things like books and supplies, transportation expenses and the cost of any extracurricular activities.

So, add these things up, and you’ll arrive at the total cost of attendance. But given that we are looking for the average prices for a couple of different types of schools for the 2014-2015 academic year in the United States, for instance:

One year at a two-year public college for a student who lives in the school’s district,

One year at a four-year federal state university for a student who lives in-state,

One year at a four-year private non-profit university.

The average net price for the same academic year in the United States was about $11,000 for two-year schools, $17,000 for 4-year in-state universities and $23,000 for private 4-year schools.

Now, even though these numbers might look discouraging, fortunately, they don’t represent what an average family pays. What families pay is usually referred to as the “net price,” which is the total cost of attendance, minus any grant aid and scholarships (necessarily any money that you don’t have to pay back).

Also, you should know that the net price does not, take into account things like student loans, which you will eventually have to pay back. So you have nothing to be scared of, as the net price can end up being a lot less than the total cost of attendance, especially for private 4-year schools, where it can average out to be about half the sticker price.

So obviously, getting your child grants and scholarships can have a significant impact on your child’s cost of college.

How to Estimate Your Child’s College Cost

Around the same time that your child completes his applications, you’ll need to submit a FAFSA, that’s the Free Application for Federal Student Aid form. This is a federal form that is used to figure out what’s called your “expected family contribution.” That’s, the amount the government considers your family capable of paying based on your financial information.

The application asks for information about your family’s income, assets, and previous tax returns to get a picture of your finances. The government then sends this information to the schools your child has submitted his/her application. The school now takes their annual cost of attendance, subtracts it from the price of tuition, fees, estimated living expenses and also from your expected family contribution, and then arrives at your financial need.

Your financial need is then used by the school to determine how much they might give you in the form of grants and other types of need-based financial aid. Some schools will have more money available for grants than others, and a lot of grant aid is offered on a first come first serve basis, so it’s a good idea to submit your child’s FAFSA as early as possible.

FAFSA applications are typically available to fill out in January of the year your child will be attending college. And you’ll have to fill out a FAFSA each subsequent year your child attends school, to continue his/her consideration for financial aid.

While many students receive need-based grants and aid, there are plenty more ways to find the money for school. If your child has exceptional grades, is a promising athlete, or has other skills, schools might offer her merit- or athletic-based scholarships. And there are many private scholarships and grants provided by places like arts or religious organizations, and local clubs that are available as well. The fact is that one considerable scholarship could go a long way towards covering a significant portion of your child’s college cost. Whether they’ll include several hundred dollars or several thousand in fees, looking into these opportunities could help your family save.

Net Price

Now, unfortunately, there’s no way to know your child’s precise college net price or real cost of college will be for any particular school before your he/she gets accepted and receives a financial aid package.

But to help students and parents get a general estimate of what they might spend, most colleges offer net price calculators on their websites. These calculators ask questions about your family’s financial status and sometimes your child’s academic performance to estimate your net price. However, bear in mind that their accuracy can vary.

Thus, when looking at their estimations, pay close attention to what they offer in grants, scholarships and other things like student loans and work-study because, while both loans and work-study can help cover costs, they cost money, consume time and aren’t technically part of your child’s net price.

Most importantly, when researching the cost of your child’s potential schools, remember that tuition and fees are just a single part of the total cost of college. Thus, take some time to think about what your child’s room, board, and other expenses might cost. For any given school, these expenses can make up about 30-80% of the total cost of attending such a college.

Knowing these things ahead of time will not only help you budget appropriately for your child’s cost of college but present you with the ample opportunity to save!

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