If you have started the process of preparing for your child's college career, you may have run into several things that have you confused – and maybe a few that have you nervous.
Cost of attendance may be the most confusing term you will hear even though it sounds mostly harmless.
What Cost of Attendance Means
The cost of attendance is rarely the amount paid to attend college. The cost of attendance is the "sticker price" and does not consider scholarships, grants, personal contributions (from a college savings plan or graduation checks, for example) and other financial assistance available to your student. Also, most cost of attendance figures include additional costs that may not be encountered – this is important as your student will most likely be presented with a statement called an award letter that assumes he or she will need those additional funds.
Understanding the Award Letter
Award letters are usually created by the college and sent in February or March. Award letters outline how much one year of college will cost by detailing the tuition and fees and room and board costs. The letter also shows all awards (scholarships, grants, work/study funds) as well as the EFC, or expected family contribution. You may be a bit shocked by the size of the EFC. Before throwing up your hands in despair, please consider the two ideas presented below to help calm yourself.
Take a look at one aspect of cost of attendance – "transportation costs." Although your student will most likely travel back and forth from college for visits and holidays, the amount of these costs can be subtracted from the cost of attendance in most cases.
Two things to consider:
- When the time comes to travel, most students will be able to drive home. According to the Higher Educational Research Institute at UCLA's 2014 freshman survey, approximately 57% of students attend a college within 100 miles of their home. Encouraging your student to carpool can reduce expenses by paying for only a fraction of the gas costs.
- Even if you do anticipate your student having travel expenses beyond gas costs, do everything you can to resist the urge to include the costs in any student loans you or your student take out – federal or private. Even a ticket to fly home twice a year can be something that can be saved for or purchased using money earned through wages by working during the school year (bonus: studies show that students who work 10-20 hours a week while in college have better grades and a higher graduation rate as a group). Most likely, the expected family contribution can be reduced by more than $1,000 by removing transportation costs from the bottom line for now.
Another quick way to reduce up-front costs and the amount you or your student may need to borrow is to look at the line item on the award letter for books. You may be surprised at the relatively reasonable prices of books in some cases. Trends toward loose-leaf books (printed on 3-hole punched paper – high quality, not Xerox copies) and book rental has helped reduce costs. Books are another item that can usually be subtracted from the bottom line cost of attendance – pay for books can be paid for with cash from savings, earnings or high school graduation cash. Encourage your student to only purchase books that he or she plans to keep – otherwise rental is a smart path to save money.