The first step to paying for college is understanding everything that goes into college costs. Unfortunately, college costs aren’t always as transparent as they should be, but if you stay informed it’s not too difficult to navigate the world of college finances.
Look at the Total College Costs
The first thing to understand about the cost of college is that tuition isn’t the only thing you’ll need to worry about. There are also fees, such as lab and technology fees, and room and board. When you are looking at the costs and financial aid of any given institution, ensure that you are considering the total costs of attendance, and not just tuition. Total costs of attendance will also account for the varying costs of living in different cities; for example, a private college in New York City and one in Tulsa might have similar tuition rates, but the cost of room and board in these different places is likely to vary significantly.
How Schools Determine Aid
Different schools have different financial aid policies that can directly affect you. For example, some schools have policies that completely cover tuition or room and board, for students whose parents earn under a certain amount each year. Other schools have aid policies that are more variable, and are dependent on the types of funding available that year. Research how different schools calculate their financial aid packages, and the types of aid they give out, when considering your college costs.
Examining Your Aid Package
After you fill out your FAFSA and receive financial aid packages from different schools, you’ll want to compare the aid packages you’ve received. Grants are always better than loans-these never have to be repaid. However, for any institutional or state grants that you’ve received, research how likely it is that these funding sources will be available throughout the length of your degree program. Some schools give out more grant money during the student’s first year, and less later on; others may have a smaller first-year aid package, but they may be a better financial bet over the course of four years, if the grant amount is set in stone.
Understanding Student Loans
Student loans are a reality for many college graduates these days, as college costs continue to outpace inflation. There are several types of Federal student loans, although they all have low interest rates. Some loans are subsidized, and do not accrue interest while the student is enrolled in school; others do. If you’re receiving an unsubsidized loan, it makes sense to pay interest if you can, as it accrues; this will greatly decrease the principal amount you have to pay after you graduate. All Federal student loans have a grace period of about 9 months; this means that students do not have to begin paying down the loan until 9 months after they have completed their degree, although interest still accrues during this time. (ed.gov)