Parents worry about how much college will cost and how they will afford college. Other than purchasing a home, college is usually the largest investment a family will make. Hopefully, families have been saving for college from the time their children were small. But with four years of college costing as much as a quarter of a million dollars, family savings are typically not enough.
A common misconception that parents have is that their financial salvation will come in the form of private scholarships. Private scholarships make up only 6 percent of all scholarships.
The biggest source of aid is through the colleges. Families can save thousands of dollars by selecting the right colleges. Some parents might jump to the wrong conclusion when reading this. They might think that this means their child needs to attend a college with a low sticker price. Colleges, however, are like airplanes. Different people are paying different amounts for the same service. Surprisingly, private colleges may be less expensive than a public in-state college.
Students need to select colleges that fit them financially, as well as academically and socially. The junior year of high school is a great time to begin the college selection process. If you are a rising senior, and haven’t considered the following financial questions, try to address them now.
On the financial side, you need to know:
- How much money has been saved for college?
- How much need-based aid do I qualify for?
- Which colleges meet a high percent of need?
- Which colleges meet the need primarily with grants, instead of loans and work/study?
- How much merit aid do I qualify for?
- How many years will it take me to graduate? Students will want to check the 4-year, 5-year and 6-year graduation rates at the colleges they are considering.
- How much money is the most I should borrow?
- How much money is the most my parents should borrow?
Some families, without the money to pay the college sticker price, ignore these issues and stick their heads in the sand. I don’t recommend that, since the family may run out of money before college is completed or the student/family may be saddled with incredible debt for years to come.
Other families invest significant time to research these issues. Some families hire an independent college admissions professional like me, who understands these issues and the available resources, saving the family money and preventing the family from taking on too much debt.
What has your experience been? What questions do you have?