Estimating your child’s cost of college

Estimating your child’s cost of college


Estimating your child’s cost of college 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 biggest expenses
you and your child might ever face. The good news is that approximately two-thirds
of college students receive grants to help cover some of the cost. In this video, we’re going to take a quick
look at some average annual costs of attending a couple of different types of schools- Then we’ll look at a few of the ways you might
reduce these costs with grants and scholarships. And finally, we’ll look at ways you can estimate
what your child’s real cost of college, or �net price,� might be ahead of time. So first, let’s take a look at the total cost
of attending a college. When we talk about the �total cost of attendance,� we’re
talking about ALL the expenses- This includes tuition and fees, room and board, and other things like books and supplies,
transportation expenses and the cost of any extracurricular activities. Add these things up and you get the �total
cost of attendance.� And what we’re looking at HERE are some average
costs for a couple different types of schools for the 2014-2015 academic year in the United
States: One year at a two-year public college for
a student who lives in the school’s district, One year at a four year public state university
for a student who lives in-state, And one year at a four year private non-profit
university. Of course, these costs will vary from student
to student and school to school � this is just to get a sense of the average costs. Now, these numbers might be discouraging,
but fortunately, they don’t represent what an average family actually pays. What families
actually pay is usually referred to as the �net price�� that’s the total cost of
attendance, minus any grant aid and scholarships- essentially any money that you don’t have
to pay back. It�s worth noting that the net price does not, take into account things
like student loans, which you will eventually have to pay back. 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. 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. As you can see, grants and scholarships can
have a significant impact on your child’s cost of college, so next, let’s take a look
at how they’re figured out for individual students. 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. 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 basically 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 applied to. The school takes their annual �cost of attendance�
– the price of tuition, fees, and estimated living expenses and subtracts your �expected
family contribution� to get 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. And you’ll have to fill
out a FAFSA each subsequent year your child attends school to continue to be considered
for financial aid. While many students receive need-based grants
and aid, there are plenty more ways to find 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 offered by places like arts or religious organizations and local clubs that are available
as well. One large scholarship could go a long way towards covering a significant portion
of your family’s cost, but multiple smaller scholarships might not have as many applicants.
Whether they’ll cover several hundred dollars or several thousand in costs, looking into
these opportunities could help your family save. Now, unfortunately there’s really no way to
know exactly what your net price � or real cost of college will be for any particular
school before your child has been 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 you
child’s academic performance in order to estimate your net price, but their accuracy can vary. When looking at their estimations, pay close
attention to what they offer in grants, scholarships and other things like student loans and work
study. While both loans and work-study can help cover costs, they cost money and take
time and aren’t technically part of your child�s net price. When researching the cost of the your child’s
potential schools, consider several factors- Tutition and fees are only one part of the
total cost of college. 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 a college- and they might contain opportunities
to save. And depending on several factors including
your family’s income and the amount of money a school has available for grants, your child
could receive substantial aid that could help reduce the cost of a given school. Again- you won’t know the real cost your family
will be expected to pay until after your child’s been accepted. But you may discover that some
schools might not be out of reach after all.

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