Preparing to meet the demands of college costs can be complex to the point of being frightening for many. Parents and students are encouraged to understand the differences between loan types, to compare net prices, to find and apply for scholarships, and more. Even when you receive financial aid offers, you have to decipher the information and make a close comparison to ensure that you are getting the best deal. Even if you do all the work, you may get an unpleasant surprise during the college years if you fall victim to the common faulty assumptions about paying for college. Watch out for these common mistakes:
- Assuming all package components are free money. Most financial aid packages contain two vastly different categories of aid…those that are free money and those that must be worked for or repaid. Carefully break down the package to see how much free money is being offered in the form of grants and scholarships and how much will have to be repaid before choosing the best offer.
- Assuming all financial aid is renewable. Regardless of what your child is offered for the first year of college, you may find that he or she gets substantially less in subsequent years. If scholarships are included, find out if they are renewable and what must be done to keep the funding. Also remember that need-based financial aid, such as Pell grants, fluctuate greatly from one year to the next and depend upon budget negotiations in congress. Be prepared with a backup plan in case some of your student’s funding falls through.
- Assuming that what you see is what you get. Research each potential college thoroughly to see how much will be charged for add-ons and other fees at a particular school. College costs are much more than simple room and board and tuition costs. Make sure to get a thorough picture and plan accordingly when you are budgeting for costs.
- Assuming costs will remain steady. Unless your chosen college or university has a tuition guarantee, tuition and costs
will likely rise each year until graduation. There is really no way to predict how much costs will rise, so this factor can make the process of choosing a school even more difficult.
- Assuming that offers are firm. Feel free to contact first-choice schools and negotiate financial aid offers. Mention any changes to the family finances as well as any better offers you have received. If your student has a high GPA and other qualifications, the school is likely to be competitive in what is offered.
Discovering and planning for college costs is a daunting and complex task. The best you can do is get all information and make sure to avoid these common faulty assumptions before committing to any school.