The True Costs of College (And How To Lower Them)

It’s no mystery that college costs can span an enormous range. Unfortunately, the way college costs are computed is a bit of a roundabout process – it’s not straightforward. This can make it harder to get a real sense of what a particular college will cost you, given your unique circumstances, and harder to compare your unique cost between one school and another.

The key to looking at college costs is to get a handle on the way the information is presented. Once you know your way around the lingo and understand the bigger picture, it’ll be easy to evaluate costs. These efforts also make it easier to spot ways to trim your total costs, potentially helping you lower the student loan debt you have to take on to fund your degree.

Here’s the process: You start with a school’s “net price,” then subtract the amount that you and your family can contribute for the year, and you’ll be left with the true number for how much you have to cover through loans, work study, and any self-sourced scholarships. Last, we consider ways that you might push your costs down a little more.

Start with the College Scorecard’s net price for your unique circumstances

To start, visit the College Scorecard website, which is managed by the U.S. Department of Education. Look up the college that interests you, and the first page that comes up will show you that school’s Average Annual Cost. This number – the Average Annual Cost – is what their average student pays for the total cost of attendance (including tuition & fees, room & board, books, etc.) minus the average gift aid received by those students who get federal aid packages (including grants and scholarships, which you do not have to pay back later). 

An example from College Scorecard

Source: College Scorecard

This Average Annual Cost gives you a huge amount of information. For instance, say two schools have about the same tuition but one has an enormous endowment that it uses to give scholarships to most of the students. 

To make the info even more accurate, use the site’s tools to find out what the Average Annual Cost is for a student in your income bracket. Boom! A customized price tag that’s suited to your situation.

Looking at your unique costs

Source: College Scorecard

Next, subtract your family’s expected contribution

When you fill out your FAFSA, the system will calculate your Expected Family Contribution (EFC). This number is just an estimate to give financial aid officers a sense for what your family can afford and how much aid you’ll needa. But is it the real amount your family will contribute? Do you have any other savings stashed away for school? 

Talk with your parents to determine your own “EFC.” Subtract that from the Average Annual Cost you got on College Scorecard to determine how much you actually need to cover, through loans, working while studying, or private scholarships that you sourced yourself.

Looking at ways to cut costs

After you’ve gone through college costs from these viewpoints, you have good information to compare your options. You may also get a better sense of where you can potentially trim costs. Here’s a good example of the typical college costs by category:

National averages

Source: CollegeBoard

The two biggests costs for college are tuition, and room and board. Tuition is out of your control. Room and board is one area where you could potentially make more money-saving choices – live with family for all or some of college; choose housing with extra roommates, cook at home instead of eating out on campus, etc. 

The cost you pay for books and supplies is only a small piece of the total picture, and doesn’t offer much room for trimming your spending. But transportation expenses can vary between one school and another. Will you need a car to get around? Is it far away from home, driving high gas costs or even airfare to get back for visits? Personal expenses, the last category of college costs, can also vary a lot – you can live it up on campus with friends, or you can stretch your lifestyle on a shoestring budget. 

To make smart decisions about paying for college, you need to start with good information. Do your homework on understanding your unique costs for your education.

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