How to Figure Out What College Will Really Cost

How to Figure Out What College Will Really Cost



3 years ago | 5 min read

The college application and decision-making process can be a very exciting time, but it can also be a significant source of anxiety, especially when it comes to thinking about the overall price of college.

The price of college is the subject of policy debates, media headlines, and family conversations because of how it affects educational opportunities, student’s bank accounts, and the economy. The current approach to higher education financing often leaves students facing unmanageable debt. 

Many overlook the fact that the real price of college is much higher than the sticker price of college. In order to weigh the true cost of attending college, you have to take quite a lot of different factors into consideration. Experts will tell you to look at the cost of tuition, fees, books, and board -- minus guaranteed scholarship and grant aid -- to determine the overall price of college. But there are hidden costs of college that can have a dramatic impact on how much you actually end up paying back. 

In order to make an informed decision on how much your college degree will cost you, let's take a look at some of the more overlooked costs of college.

How to Get the Best Estimate of Your College Costs

It’s important to do your research so you’re able to accurately estimate the actual amount you’ll have to pay to attend the colleges you’re considering. It’s equally important to consider whether you personally are making a wise investment when choosing a school and program of study, especially if you are borrowing to finance your education. 

One reason for this is that some professions simply have more earning potential than others, and the more you earn the easier it will likely be to repay any debt you have after graduation. In addition, some schools do a better job than others of preparing students for a career, which can help you get the job you need to repay your debt. 

Therefore, when you consider colleges, you may want to think about whether your degree will help you pay back the amount of debt that you need to take on to finance your education. 

1. Focus On Net Price

The net price of college is the overall price for college minus grants and scholarships but not loans or money earned through a work-study program. Figuring out your estimated net price is one of the best ways to determine how much college will cost you. 

A lot of schools offer financial aid packages that can help lighten the load if you qualify. First, check the school's net price calculator to see whether you may be able to lower the sticker price with financial assistance from the school.

Most colleges offer net price calculators. You can enter information about yourself to find out what students like you paid to attend that college the previous year after taking grants and scholarship aid into account. This estimate can give you a better understanding of the amount that you might expect to pay using savings, federal student aid, student loans, or Income Share Agreements. 

You may even be able to qualify for enough financial aid at a more expensive school to make the portion of tuition that you will be responsible to pay comparable to that of a far cheaper school.

A college you’re interested in, for example, a four-year public institution, might have an in-state, overall price of $9,410. But its average net price might be only $3,980 - which includes room and board and other costs. That’s a big difference.

2. Estimate the Full Cost of Earning a Degree

When you consider the amount of debt you need to take on to attend a college, think about it in terms of earning your entire degree instead of just paying for the first year of school. It’s important to go beyond semester-by-semester or year-by-year when considering higher education financing.

Include additional costs such as books, supplies, food, and other living expenses in your estimate. Thinking about all four years starting from the decision-making stage can help you plan. Financial aid packages can change and you may not need to borrow as much in your first year as you will in later years.

The U.S. Department of Education maintains a College Scorecard, a good tool to use if you want to better understand the cost of earning a degree and more. You can look up the school you’re considering and learn about the average debt after graduation and an estimate of the typical monthly loan payment. You can also get other useful information about specific colleges, including programs, costs, graduation rates, and average salary after completing a degree.

Ways to Fill Your College Tuition Gap

Compare Financial Aid Award Letters

Once you have one or more financial aid letters, you'll have a much more accurate picture of your financial obligation and be able to compare plans to pay for college. This tool is maintained by the U.S. Consumer Financial Protection Bureau and can help you understand your financial aid offer and make a plan to cover any remaining costs. 

Consider if You Will Be Able to Afford Monthly Payments

Once you have a good idea of how much you need to borrow for your college and degree of choice, you might want to think about whether you will be able to afford your estimated monthly payments.

The College Scorecard is a good place to start because it provides an average monthly loan payment associated with a college. The U.S. Department of Education's online Loan Simulator takes that one step farther and can help you get an idea of what to expect in real terms based on what you estimate you may need to borrow. The tool can't predict your future payments with 100% accuracy, but it can give you an idea of what to expect.

If you’re not sure if you’re going to be able to make your monthly payments every month consider using an Income Share Agreement. 

Income Share Agreements

With an Income Share Agreement, you pay a fixed percentage of your income over a set period. Your payments will vary based on your gross income: Make less, and your monthly payments are lower; make more, and your monthly payments are higher. ISAs were created to prevent unsustainable student loan debt (large monthly payments, low salary) and to align incentives between schools and students.

Besides the absence of growing interest and generally, no upfront payments, a significant benefit of Income Share Agreements is the fact that there are certain instances when your payments are paused or deferred.

If an ISA sounds intriguing, take a look at some of the pros and cons. Interested in more ISA programs? Check out our student’s page for a full list of schools and programs offering an ISA through Meratas!

The true cost of college often goes beyond the sticker price. Paying for books, rent, supplies, meals, and more will make the true cost of college more expensive than you anticipated but it doesn't have to be that way. Do your research, create a cost sheet, and break down what your real cost of college might be. Then, consider how you might plan on paying those costs post graduation. If you need a good place to start, check out these college-cost projectors. School might be costly, but the better you can prepare, the less you'll be stressed when you graduate.


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