When you receive a financial aid award letter, you might be drawn to the amounts of “aid” you are getting. Your aid total will probably be made up of grants, scholarships, loans, and Federal Work-Study. Getting a scholarship for $13,000 means you’re getting a good deal, right? But it isn’t always the case. So what numbers are important in your financial aid award package?

Total out of pocket cost

The total cost for you will be the cost of the college minus any awards (grants & scholarships) you receive. But these numbers can be deceiving on first glance. Let’s say you receive a $13,000 scholarship from a college whose tuition, fees, and room & board are $50,000, and you only get $5,000 from a school whose tuition, fees, and room & board are $20,000. Which is the better deal? It seems like it would be the school where you got a bigger scholarship, but in reality, the second school will only cost you $15,000 and the first will cost you $37,000.

Room and board costs

Many freshmen (and sometimes sophomores) are required to live on campus at most colleges. (This is not the case with community colleges, of course.) Room costs vary based on what type of room you choose; if you want to live in a single by yourself, it will cost more than if you live in a double with a roommate. Board costs typically depend on what kind of meal plan you choose. Freshmen, again, are often required to choose a 21-meal plan, meaning that they pay for every meal in the school dining hall. Room and board costs add up quickly.

Required fees

Every college price includes several required fees that may or may not be specified up front. Some of these fees may include insurance (all students are required to carry some kind of insurance), technology fees, campus activities fees, housing deposits or facilities fees, nonresident fees, sports fees, parking fees, identification card fees, graduation fees, and more. Some classes may also have specific fees attached to them; many science classes have lab fees and art classes have studio fees. Some of these may be listed on your financial aid letter but some will not.

Hidden costs

There are always “hidden” costs associated with your college experience that are not directly charged by the college. Some of these costs include small appliances (microwaves, etc.), bedding, textbooks, laptop and printer, travel costs, off-campus meals and entertainment, and much more. These numbers will not be listed on your financial aid package but will always add a significant amount of money to the cost of college. You can easily add $5,000 per year in just these necessary “extras.”

The overall cost

Many times parents speak in terms of the cost of a four-year college degree. The reality is that you aren’t paying just $38,000 for college. You need to multiply that by four, and sometimes by five or six. (The average college student now receives his or her degree in 5.5 to 6 years!) Add inflation and the bottom line is that a college with a list price of $38,000 per year can easily cost you $300,000 by the time you are done!

This entry was posted on Tuesday, March 29th, 2011 and is filed under Paying for college.