Financial Considerations when Choosing a College

What Will the College Actually Cost?

When you receive your scholarship and financial awards from your colleges take the time to look at the school’s net price for you. That is Cost of Attendance – which is tuition, room, board, fees, books, etc. — (minus grants, loans, work-study, and scholarships). Separate any loans that the family would have to pay back.

Look at your Financial and Merit Aid Awards Carefully.

Some colleges say: “renewable.” Some financial and merit aid is meant as a one-time enticement for entering freshman, while other aid is for all four years — but it might be contingent on your kid’s GPA. Make sure you read the letter very carefully and know the conditions. Then, if you have any questions call the school’s financial aid office to get answers. Is it based on your student’s GPA? And if your kid earns those grades, is it certain the money will be there each year?

Do the Colleges Accept your Students’ AP and IB credits for College Credit? 

Save tuition by choosing a school that accepts your kid’s college credits. Many of my students get a years’ worth of college credit at the outset. This can obviously save you a year of college tuition and get them out into the working world earlier.

Tell your Students the Truth about your Finances.

It may be hard not to allow your kid to attend the most expensive college, but your long term financial stability is very important. Weigh the schools, how much you’ll contribute, how much in loans your kid should take, what the schools’ graduation rates are, if they are offering work-study money, etc. Once you have all the offers, evaluate your family’s circumstances, do you have another child that will be in college soon? Are there any major expenses that you have not factored in? Does your student want to go to graduate school, and therefore a cheaper undergraduate degree would be fine?

If you Accept Student Loans, use the Federal Loans First.

Federal loans generally have lower interest rates than private loans, no hidden fees, and better repayment terms. Stafford Loans — direct loans from the government — have the best current interest rate. They are limited to $5,500 for freshmen, $6,500 for sophomores and $7,500 for juniors and seniors.

Never Use your Retirement Savings.

If you do, you will be taxed on that money and which will reduce your child’s financial aid eligibility the next year. You need to keep your money in your retirement accounts.

You can Negotiate your Offer.

As long as you have a good reason, you can ask the college’s financial aid department to grant you more money. In many instances you can mention a better offer from a competing college, or a family circumstance which changes your ability to pay. Definitely call if there is a divorce or a lost job. Have all your financial information ready when you make the call. Be polite and clear, not whiny or pushy. Some financial aid officer make $40,000 a year, so be careful in how you describe your circumstances.

Congratulations on Your Successes!!

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