By Joe Messinger, CFP®
June 25, 2021
Summertime, a great time for reading a book and going to the pool, and now that the country is opening back up, it’s also a great time for families to work college visits into their summer travel plans. Some colleges are having full visits, some are doing in-person, by appointment only visits, and some are doing online visits. Regardless, colleges have put in place plans to show off their best sides with these different kinds of tours. And while many questions will occur to you about dorms, dining halls, academics, and student life, we wanted to share some questions from a financial perspective you’ll want to have answered.
Before you even begin embarking on a variety of visits, you should have a college criteria checklist so you can compare and contrast colleges subjectively to see if they meet your criteria. We’ve created a College Visit Scorecard for your notes and observations. Our recommendation is to do some initial work to determine a major or career of interest to you so as you go on visits you can speak to the department specifically and not limit yourself to the nickel tour and get sold on how cool the campus is.
Of course, the first question everyone thinks of is How much does it cost to attend this school? While seemingly straightforward, some additional things to consider are costs other than tuition, room and board, and books and supplies. Signing up for the College Money Report™ will help you look at all these additional things.
Other questions you’ll need to answer are, Will your student have a car on campus? If yes, you’ll have parking fees, gas, and maintenance. How far away is the campus from home? Travel to and from can add up so you’ll want to give this some thought.
What fees will there be? They can vary depending on your major for things like lab and computer costs.
At some point, your student may move to off-campus housing. What can you expect to pay for off-campus housing? You’ll want to be able to compare the cost of housing for years three and four at your favorite schools.
What is the average college loan debt students leave with after graduation? The answer to this question will give you a good overall picture of how much students are receiving in aid to cover costs.
How does the school structure merit aid, aid based on academic performance? Does it last all four years? Or do they even offer merit aid? Some colleges do not offer merit aid and only offer need-based aid. Some schools use a grid-style chart for determining merit aid. Using tools like these, you can see at a glance if you achieve a certain GPA combined with a certain ACT/SAT score, you will be awarded a specific amount of money. If your student has a dream school in mind, this information can be great motivation to get them to hit the books and improve their score. In some cases, an increase of just one point can mean upwards of $20,000 over 4 years!
Some universities do not have a predetermined structure where a certain GPA and test score gets you a certain amount of aid. Instead, they may award merit aid in certain areas like science or for certain things like leadership. As an example, one thousand freshmen apply for 5 full-ride scholarships. These types of “competitive” merit aid scholarships are more uncertain for your student.
What percentage of need-based aid does the school meet? Know your Expected Family Contribution, EFC, before you visit a school. You can use this calculator to estimate your EFC. If your family’s EFC is $35,000 and the school costs $40,000 per year and the school meets 100% of financial need, you know the school will provide the $5,000 difference. But be careful! How do they meet that need? One of the most common ways a school meets financial need is in the form of loans or work-study. You need to “know before you go” if they are giving you “gift aid” (grants and scholarships) or “self-help” (Loans and work-study).
What percentage of students graduate in 4-years? How about 5-years? When you compare the offers from schools, you’ll want to look at the whole picture. By going to school for a fifth year, you are adding at least 25% to the total cost and you have lost a year’s income by taking longer to graduate.
As a side note, did you know only 41% of students graduate in four years according to the National Center for Education Statistics? “Among first-time students who were seeking a bachelor’s degree or its equivalent and attending a 4-year institution full time in 2006, 41 percent completed a bachelor’s degree or its equivalent at that institution within 4 years, while 55 percent did so within 5 years, and 59 percent did so within 6 years.”¹ Would you be willing to pay 25% more than your neighbor for a new Honda Odyssey that is exactly the same? No way! Also, keep in mind in many cases, scholarship money may end after 4 years. So, the fifth year may be 100% out of pocket. Critical to check how long the scholarship will last as you analyze financial aid award letters.
We’ve shared with you several questions to consider when visiting colleges. You know we want you to know before you go! Having all the answers will allow you to make the most informed decision.
Something else to consider: You’ve visited the colleges, applied, and received the mysterious financial aid award letter. Take a moment to check out our Choosing a College: The Financial Aid Award Letter blog.
¹National Center for Education Statistics, “Digest of Education Statistics, 2013, Chapter 3: Postsecondary Education, Degrees”
Updated June 2021