The finish line is in sight. But before you do a victory lap, there’s one more frantic sprint ahead of you. You’ll have just a few weeks to figure out what school works best for you, your child, and your budget. Here’s my advice:
- Watch for the financial aid award letters. Schools typically mail these, or simply send a notification to view online, to admitted students in late March or early April. (For early action, they arrive a few months earlier.) If your kid gets in somewhere early decision—meaning he has committed to attending a specific school up front—your choice has pretty much been made, although you can change your mind if the school doesn’t give you enough financial help to make it work. (More on early decision in Shopping for Schools.)
Now here’s the annoying part: The financial aid offers your kid receives might not all be presented in the same way—there’s no universally adopted format. And sometimes award letters can be downright sneaky. For instance, some schools make a big deal out of “awarding” your kid a federal Direct Loan—some are so misleading that they actually start out with an over-the-top “Congratulations!” While subsidized and unsubsidized federal student loans tend to have lower rates than private loans that you can get at a bank, don’t mistake them for free money, like a scholarship or grant. You’ll still have to pay that money back. (For more on this, read Everything You Need to Know About Financial Aid.)
- Make apples-to-apples comparisons. The good news is that thousands of schools use the Department of Education’s Financial Aid Shopping Sheet format, which is designed to present award offers the same way, making it easier to compare them. If one or more of your kid’s schools doesn’t send its offer in the form of a “shopping sheet,” though, input the numbers into the Consumer Financial Protection Bureau’s financial aid comparison tool to get a handy head-to-head comparison.
- Figure out your true out-of-pocket cost. To complete the comparison, you need to determine what each school will actually cost you. To do this, add tuition, room and board, fees, books, supplies, and transportation—don’t forget that—and subtract the outright gift aid, which is money you get from the school that you don’t have to pay back. That includes grants (usually money you receive based on your financial need) and scholarships (typically money a kid gets for having an exceptional talent or high level of academic achievement). The number you get after all this math is called your net price. Now you’re going to have to figure out if and how you can cover the net price of each school, and whether it’s worth the cost. One caveat: If you receive outside scholarships from organizations or civic groups, schools can use that money to replace scholarship money in their offer. (For more on grants and scholarships, go to Everything You Need to Know About Financial Aid.)
- Don’t borrow just because you can. If your kid has his heart set on a school, it’s tempting to say you’ll borrow whatever it takes to get him there.
But remember, you don’t want your kid to face big student loan payments just as he’s trying to get his career off the ground. And you don’t want to be paying off loans when your retirement is fast approaching. To minimize borrowing, take the net price of the school and subtract whatever you plan to contribute from your own saving and earnings. Whatever is left over should be paid for with federal student loans. Don’t take out any more loans if possible. You can get an idea of what the monthly payments on those federal loans will look like after graduation using the government’s Repayment Estimator. If you’re pretty certain you have a budding journalist, musician, or sculptor on your hands, you might want to be extra cautious about piling on debt that makes it difficult to pursue her dreams. On the other hand, if she’s a STEM type, you might be willing for her to borrow a bit more because the higher expected starting salaries will balance out the debt.
Try talking to a financial aid officer at the school. Nicely, of course. The key to success here is to be polite and honest.
- Call the financial aid office. If the net price of a school is more than your family can pay (even taking on an acceptable level of debt), but your kid really really wants to go there and you’re on board as well, here’s a tip: Try talking to a financial aid officer at the school. Nicely, of course. Don’t look at it as a hardball negotiation. Think of it as a way to show how much your kid loves the school and as an opportunity to explain any economic factors that didn’t show up on your financial aid forms. This might sound scary, but it could make the difference between your kid enrolling there and settling for somewhere else. If another school is offering more aid, let your kid’s number one choice know that. Also, if there has been a significant change in your financial situation—say you lose your job, face big medical bills, get divorced, or suddenly have to pay the costs of caring for an elderly parent—let the financial aid office know. The key to success here is to be polite and honest. Financial aid officers are overworked, have probably heard it all before, and don’t make a fortune, so be mindful of making a “woe is me” argument if you earn six figures.
- Consider non-financial factors. After considering cost, you’ll be faced with less transactional considerations. Which college is farther from home? And what will that mean for your kid—and for you? Does one have a great art or engineering program? Academic strengths matter, although keep in mind that almost a third of undergrads change their major at least one time. Of course, you can’t ignore intangible traits like your kid’s comfort level on campus, how diverse and welcoming the community seems, or how safe you think your kid will be.
- Choose. Now that you’ve reviewed all the information, you’re ready. There might be a clear winner, or you could be down to a couple of options. That’s when the soul searching begins. Say one school costs a few thousand dollars more, but it’s your child’s absolute first choice. Is it worth it to pay extra for that dream school—especially if loans are involved?
Obviously, the final choice is not all about the numbers. But it shouldn’t be a purely emotional decision that stretches your family too thin financially, either. If you and your kid have been communicating throughout the college process, that’s a real plus because you’ll know where each other stands. If you want to see how one family made a difficult call—and how important it is to communicate—check out this story above from Emelie and her mom, Maria.
- Celebrate! When you’re done, it’s time to party. You did it! You have a kid on the way to college!