A college education is a lifelong investment. College graduates are more likely to be employed and earn more throughout the course of their lives, according to a recent report by the College Board. While the benefits of a college education may be clear, figuring out the true cost and how to pay for it isn’t always as obvious.
Today, college-bound students and parents face lots of questions in determining how to pay for college. An early step in the process should be determining the difference between the published cost of attending a particular school and the available scholarships or financial aid from the school. This is called the net price of attending a university. Most colleges have a net price calculator on their websites to assist in this determination. Additionally, students and parents should try and forecast the true cost of college beyond courses and textbooks – including all the unforeseen costs, such as supplementary study materials, transportation, technology, extracurricular activities, any of which can push students and parents into unexpected debt.
Eighty-one percent of parents plan to help pay for their children’s college education, but a willingness to pay doesn’t always correspond to an ability to pay, according to an annual survey commissioned by Discover Student Loans. Scholarships, grants and savings can help cover some expenses, but student loans can be needed to help cover the full cost of attendance. It’s important for students and parents to understand their options and carefully compare federal and private student loans so they can choose the loans that best fit their needs.
“Parents and students should devote as much time to identifying and determining ways to responsibly pay for college as they do to the application and admissions process,” says Danny Ray, president of Discover Student Loans. “Conducting research, networking with other families and taking advantage of helpful online resources and tools such as net price calculators are just a few examples that will provide a better sense of the true cost of college.”
Tips for paying for a higher education
A few additional tips students and parents should keep in mind when navigating the college financial aid process include:
* Maximize free money: Grants, scholarships and other free financial aid can help students pay for some college costs. Resources such as StudentLoan.com and Studentaid.ed.gov can help students and parents identify and apply for important free money. When considering the full mix of financing options, families should compare federal and private student loans including interest rates and origination fees.
* Have a continuous – and honest – dialogue with each other: The financial aid process can be overwhelming. It’s essential that college-bound students and their parents know their respective responsibilities and roles in paying for college. Parents should talk with their kids about what’s important, their financial limits and where the money is coming from, and then designate who will pay for what expenses.
* Know when to request a professional judgment: If a parent loses his or her job or has his or her wages reduced, then he or she can ask the university’s financial office for a professional judgment review. During this process, the financial aid office may consider the projected year income as opposed to prior year income, which could result in possible increases in financial aid awards and a reduction in the expected financial contribution from the parents and student.
As the cost of college continues to increase, it’s important to understand the resources available to help pay for a college education, ultimately providing long-term benefits to students and parents. For more information, visit DiscoverStudentLoans.com.