Financial Fit

While getting accepted to college can be a huge relief, it can still be difficult to decide where to go. For every family, no matter their income, looking at financial fit is always an important part of the college decision. When deciding which school is the best fit for you financially, consider these factors:

Cost of Attendance (COA)

Take the tuition, room, board, fees, living expenses, and travel and add them together, and then subtract any grant aid you received. You can include outside scholarships in this calculation as well (be sure to check with each school how they handle outside scholarships. Some schools will use them to reduce your family’s financial contribution, while others will use them to reduce institutional grant aid or loans). Do not subtract loans and work study from the total cost. Here are some examples of how a hypothetical student (let’s call her Hannah) calculates her COA* of three universities:

University X

  • Tuition: $9,824
  • Fees: $1,542
  • Room: $7,042
  • Board: $4,118
  • Living expenses: $1,000
  • Total cost: $23,526
  • University X grant: $4,500
  • Stafford Subsidized Loan: $3,500
  • Cost of attendance: $19,026

University Y

  • Tuition: $36,010
  • Fees: $542
  • Room: $6,404
  • Board: $4,164
  • Travel: $2,000
  • Living expenses: $1,000
  • Total cost: $48,120
  • University Y Citizens scholarship: $10,010
  • University Y Grant: $16,000
  • Stafford Subsidized Loan: $3,500
  • Cost of attendance: $24,110

University Z

  • Tuition: $39,344
  • Room: $9,630
  • Board: $4,310
  • Travel: $1,000
  • Living expenses: $2,500
  • Total cost: $56,784
  • CAS scholarships: $10,000
  • Federal Perkins Loan: $2,400
  • Stafford Subsidized Loan: $3,500
  • Stafford Unsubsidized Loan: $2,000
  • Federal PLUS Loan: $18,494
  • Cost of attendance: $46,784

*These financial aid packages are purely hypothetical. Packages will vary for each person depending on a number of factors. For information about what your financial aid package might look like, visit each college’s financial aid calculator located on their respective websites.

Family Contribution

How much is your family willing to contribute? This amount may differ significantly from what a college states your family can pay or what you think your family can pay. We’ll say Hannah’s family is willing to contribute $60,000 total towards her education.

Personal Contribution

Realistically, you will be able to make $3,000-$5,000 per year working all summer and a few hours per week during the school year. Many times, a school will include a certain amount of work-study in your financial aid package. This essentially means that they expect you to work a few hours a week in school and that your salary will be put towards your tuition and fees. When considering the role of work in paying your college expenses, consider the work you want to do during the summer. Some career related work (i.e. internships) may not pay or pay very little. If you need a summer job, consider your career aspirations and if internships will be a part of achieving them. Hannah hopes to be a lawyer and thus hopes to get a variety of experiences in the legal sector during college to both better understand the profession and forge connections when applying to law school.

Career Prospects

Hannah is very interested in attending law school. Although it seems like a long ways off, it is important to take into consideration  graduate and professional schools tuition when deciding which undergraduate college to attend. Law school can cost upwards of $70,000 per year and typically involves taking on a significant amount of debt. University Z does very well placing graduates into law school, though University Y and University X place many into great schools as well.

Debtmore information on this topic coming soon

Debt is an extremely important consideration to make given both the burdens of debt and the state of the economy. Everyone should minimize the debt they take on if at all possible. Individuals who a) plan on studying a subject that does not translate into a definite career path and b) plan on attending graduate or professional school should be even more conservative about debt. Students who study non-vocational subjects cannot expect to necessarily on having a steady paycheck immediately after graduating from college (nobody really can, for that matter). Students who plan on attending graduate or professional school will probably have to accrue more debt in order to graduate. And unlike other forms of debt, no one is able to default on student loans.

Hannah received a loan-heavy financial aid package from Z. This amount of debt would be unmanageable no matter the circumstance, but particularly because she intends to go to law school. Z is definitely not a financial fit for Hannah and thus she needs to cross it off her list. For Y, Hannah will have to come up with $4,000 per year to make up for the amount her family can pay and what the cost of attendance is. Fortunately, Hannah should be able to earn this amount simply by working during the school year and the summer. However, this could limit her flexibility in summer work by not allowing her to participate in many internships. University X is the most affordable school for Hannah’s family. She would even be able to use about $8,000 of her parents savings for graduate school and have more flexibility in summer work.

University X is the best financial fit for Hannah and her family. However, Y is still a possibility. Z’s financial aid package made it such that it would not be feasible for Hannah to attend. The choice between University X and Y will now come down to weighing the importance of other factors like academic and social fit. The decision only gets more complicated…

Got any questions? Drop us a line in the comment box below or email Hope at hbrinn@thecollegiateblog.com.