Making Your College Decision: Which Colleges Can You Afford?
Maybe you’ve already fallen head over heels for the college of your dreams, but if you can’t pay for it, you won’t be able to go. So make sure your college expectations aren’t completely crushed by not giving your tuition a little forethought.
The Cappex Can You Afford Your College Choices worksheet is a simple way to figure out what you can or cannot afford. It’s super easy to fill out, and here are the pieces of information you’ll need for each of your college choices:
1. Cost of Attendance
What will going to college cost you? Not only will the college cost of attendance include direct costs, like tuition & fees and room & board, but it will also include indirect costs, such as textbooks and supplies and travel to/from college.
2. Gift Aid
Gift aid is free money that does not have to be repaid, such as grants, scholarships and tuition waivers. It functions as a discount on college costs.
3. Net Price
The net price is the difference between total college costs and total gift aid. It is a discounted sticker price, the real cost of the college.
To determine whether a college is affordable, compare your total resources with the net price of each college. Resources include college savings, contribution from income and reasonable student loans. Student loan debt is reasonable and affordable if total debt at graduation is less than your annual starting salary. If total resources are sufficient to cover four years of the net price, the college is probably affordable.
Don’t overlook the American Opportunity Tax Credit, which is claimed on your federal income tax return.
There are several options for paying for the net price, including student employment and student loans. Student employment includes Federal Work-Study and College Work-Study, as well as summer employment. Student loans includes Federal Stafford Loans, Federal PLUS Loans, and private student and parent loans.