It’s a common worst-case scenario for many students aspiring to attend college: You’ve worked diligently throughout high school to earn top grades and ace your standardized tests. All your studying and those extracurricular activities are finally paying off — you’ve been accepted to the school of your dreams. The problem is, says John Tillman, president of the Financial Aid Planning Association Ecliptic Financial AdvisorThere is no way your family can afford it.
This is a situation that can cause pain for everyone involved. “As a parent,” she says, “you’re in a situation where you have to negotiate the budget now that the student is already excited about being accepted.”
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It’s no secret that the cost of a college education has ballooned. In the United States, One year tuition and fees Students at an in-state public college run an average of $10,662 for the 2023-24 academic year (up to a total of $23,630 for out-of-state students); Private school costs average $42,162 per year. More than half of graduates from public and private four-year institutions leave with debt in 2022. On average, students with bachelor’s degrees graduated $29,400 in debt.
High student loan repayments can be stressful Negative effects on mental and physical health of young adults. Paying off debt can hold you back as you try to start a career and take priority over saving for retirement.
Even if you or your parents contributed very little, it is possible to earn a college degree without taking on huge debt. To sidestep future financial stress, students and their families should adopt a clear-eyed, realistic approach to paying for college that starts well before acceptance letters hit the mail, experts say.
Set a budget as soon as possible
Ideally, parents should start saving for their child’s college education the moment they’re born, Tillman says. Three-quarters of college-age families rely on money from parents to pay for college, according to one Recent Sallie Mae and Ipsos researchFollowed by scholarships and grants. But saving for a child’s education can be unrealistic for some families. Depending on your situation, parents — or the student himself — can start setting aside money for college by the student’s freshman year of high school, Tillman says.
Whether or not parents have been saving for years, they should have a conversation with their child before the end of their junior year of high school about how much money they can contribute, says Brendan Williams, vice president of Knowledge. uAspireA nonprofit that helps students from underrepresented backgrounds access financial aid and navigate higher education.
Parents and their children should be on the same page about how much money each party has available to pay for college, how long students expect to be in school (will they complete a four-year degree or go on to get an advanced degree?), and if they are in school while they are in school. Will get a job. That way, students have an idea of which schools they can realistically afford — and won’t waste time applying to ones they can’t.
Parents and their children should be on the same page about how much each party can afford to pay for college
For example, Private schools are generally more expensive Compared to public universities. The student may consider attending a community college first and then transferring to a state university to save money. “You’re saving 35 to 40 percent off the full cost of a four-year school,” Tillman says. “So this is a very effective way to reduce the overall cost of college.” If students want a specific college experience — a sprawling campus with dorm life, dining halls and fancy amenities — they need to weigh whether these features are worth the potential debt.
Williams recommends researching a school’s financial aid programs before applying. Each school has a net worth calculator on its website (also maintained by the US Department of Education its own database (where you can search for school net worth) where prospective students can enter information about their family’s finances to find out what students from similar backgrounds pay each year, including financial aid and grants.
Be strategic when applying for help
Students should also apply to schools where they have a strong chance of being accepted Merit-based financial aidTillman said. Scores of schools offer at least some Merit-based aid — That is, scholarships are awarded based on your grades, leadership ability, or sports and artistic talent. For example, more than half of University of Denver students received non-need-based aid in the 2022-23 academic year. Some schools consider every student applying for merit scholarships, but others may not There are separate applications.
Schools typically list GPA, SAT, and ACT scores in the middle 50 percent of students admitted to the university. For example, the Middle 50 percent SAT range 1100-1300 for students accepted to Towson University of Maryland. If your score is above this range, you’re more likely to receive merit-based aid, Tillman says.
In addition to merit-based aid, many students will qualify for it Need-based financial aidWhich is based on your family’s financial status. D Free Application for Federal Student Aidor FAFSA, how students apply for federal, state and college financial aid. Fill it as soon as possible after the form opens for the next academic year.
Aid is provided in the form of grants, scholarships, loans, and work study. on average, Students received $8,890 in federal grants in 2022. Normally, the FAFSA is available on October 1, but the form will be for the 2025-26 school year Available December 1. Some aid is given on a first-come, first-served basis, therefore Before you applywell
There is also Scholarships offered by private organizations Students who can apply outside of the FAFSA. Many students wait until they receive an acceptance and financial aid package to start applying, Williams said. However, there are more opportunities at the beginning of the academic year than at the end, he says. Students should start applying for scholarships as early as possible in their senior year of high school — and continue in the months that follow. Don’t miss out on scholarships from your school district or local organizations like banks. Williams says you may have a higher earning potential because fewer students apply. There are more scholarship opportunities for incoming freshmen, he says, so don’t wait until your sophomore year to try landing a scholarship.
Williams says that for all the scholarships you want to apply for, make a plan listing when applications are open and submission deadlines.
Consider your return on investment
Thomas CalilThe founder and chair of Global Education Opportunities and former director of MBA admissions and financial aid at the University of Pennsylvania’s Wharton School of Business, tells students to always think about the return on investment for a degree at a particular school. “If I spend my money on this education,” he said, “what am I getting out of it?”
“I personally don’t think you should think, ‘I’ll borrow what I need to borrow, I’ll figure it out.’ It’s a terrible job.”
Students should think about what they want to pursue after college and if a particular school can best support those goals, whether through a professional network, a unique program, or other amazing benefits that will help you get ahead. For example, a California-based student who plans to major in real estate in their home state will have a higher return on investment at an East Coast university versus an in-state college. “You’re going to have a much harder time leveraging that network to focus on real estate development in the Los Angeles County area,” Kalil said.
If you know you want to go to medical school or earn an advanced degree, starting your education at a community college and transferring to an in-state school for your bachelor’s degree may have a higher return on your investment, depending on how long you stay in school. Expect to stay, Kalil said.
See the big picture costs
Once students have received their acceptance and Financial aid award offers — a document that shows how much financial aid, including federal grants, scholarships, and loans the college offers — they can start comparing each school’s annual costs.
First, look at the details of your aid package. Anything marked as a donation, you don’t have to return. Federal Pell Grants Awards are made by the US government based on the information you include on your FAFSA – the maximum award for the 2024-25 year is $7,395. Loans are funds that must be repaid and accrue interest. Work study allows you to get an on-campus job to earn money throughout the year. D The school will apply your grants and loans for your tuitionFees, and room and board, while any additional money is paid directly to you.
Although the net cost may be similar for each school you’re accepted to, be sure to compare how much debt you’ll have to repay after graduation.
Try to avoid pulling out personal loan — Money lent by banks and credit lenders and your financial aid reward offer does not include — which have higher interest rates. “I personally don’t think you should go in thinking, ‘I’ll borrow what I need to borrow, I’ll figure it out,'” Tillman said. “It’s a terrible thing to do, and it puts students in a very bad situation down the road.”
There are other related costs not included in the price of tuition and accommodation students should be aware of. Factor in how much you’ll need to spend on books, transportation to and from campus, and social expenses like club memberships and off-campus meals, William says. There are also other incidentals: going to school somewhere much warmer than where you grew up or needing to buy a winter jacket.
If the cost of tuition at your dream school is out of budget, you can try to negotiate with the university, Kalil says. Collect documentation Financial aid offers from other schools, any Changes in financial circumstancessuch as a parent’s job loss or medical expenses, and a parent’s tax return. The student should then email the Financial Aid Office explaining how you would like to negotiate tuition. “You get as many offers as you can and then go and say — and be honest here — ‘You’re our best choice. But to get there we have to pay $25,000 a year which we don’t have and our second choice is $5,000 a year. Can we meet somewhere in the middle?'” Kalel says. Sometimes schools will have extra funding for extra help, but that’s rarely given.
Although college is a considerable expense, it does not have to be a difficult burden. Students and their families need to be realistic about costs and not discount lesser-known institutions.
“Parents want to be able to say, ‘My child is going [the] Big, shiny universities,'” Kalil says, “when it’s a smart financial decision for a kid to go to a really, really good community college, a really, really good state college and save a lot of money.”
