Picture this: you’ve found the perfect college. It’s the one with the amazing campus, the perfect major, and every opportunity you’ve been dreaming about. Then, you see the “sticker price.” Maybe it’s $40,000 per year, maybe $60,000, maybe more. Just like that, your dreams suddenly feel unachievable.
But here’s the thing: the sticker price of a college is almost never what you’ll actually pay. Financial aid, scholarships, and grants can lower the cost, giving you a “net price” that better reflects your true expenses. But even then, how you cover that net price can impact the total cost of college years down the line.
So, how do you determine the actual cost of college? Let’s get into it.
The Sticker Price Doesn’t Tell the Whole Story
Every college publishes a sticker price, which is the full cost of attendance before financial aid. This often includes:
- Tuition and Fees
- Room and Board
- Books and Supplies
- Personal Expenses and Transportation
At first glance, the numbers can be shocking, but it’s important to remember that very few people pay the sticker price. Colleges offer scholarships, grants, and financial aid packages that can significantly lower your actual cost.
That’s why it’s so important to focus on the net price, the amount you’ll actually be responsible for once financial aid is applied.
Net Price, the Truer Number
The net price is the most important number when it comes to determining how much a college will cost, especially when you’re comparing schools. Why? Because it tells you what exactly you can be expected to pay.
Let’s say you’re considering two schools:
Private College A
- Sticker Price: $50,000 per year
- Grants and Scholarships Offered: $37,000
- Net Price: $13,000 per year
Public University B
- Sticker Price: $25,000 per year
- Grants and Scholarships offered: $6000
- Net Price: $19,000 per year
Initially, Public University B seems more affordable because of the lower sticker price. But once financial aid is applied, you’ll be responsible for paying less overall if you enroll in Private College A.
Always remember to compare net price, not sticker price. That is your college’s true cost of attendance.
How to Find Your School’s Net Price
So, how do you figure out your actual cost before committing to attending any one specific college?
- Use the College’s Net Price Calculator: Every college is required to have a net price calculator on its website. They generally take about 10 minutes to fill out and give you an estimate of what you’d pay after financial aid.
- Compare Financial Aid Packages: Once you’ve received your acceptance letter, compare each school’s gift aid (money you will not have to pay back) versus how much you would need to cover yourself, either through student loans or other means.
- Factor in Living Costs and Extra Fees: Maybe your school charges extra fees, or the cost of living in the school’s city is higher than average. Make sure you consider additional expenses when comparing affordability.
Covering Your Net Cost
Once you determine your net price, the next step is figuring out how you are going to cover it, and how those payment options may affect you. In other words, your “net cost.”
Some students have their net cost covered through:
- Family Contributions (parents, relatives or guardians)
- Personal Savings (money set aside for college)
- Outside Financial Support (sponsorships, employer tuition assistance, etc.)
For many students, however, covering net costs means taking out student loans. Just remember to keep in mind that the amount of student loans you take out (and whether those loans have interest) could increase the overall price of college. That is, once you are finished paying off your loans, you could have potentially paid more back on the loan than the original net price of college. It’s something to consider!
Pro Tip: If you aren’t receiving assistance for college payments, but want to avoid taking out student loans, check out our guide: Paying for College on Your Own.
The true cost of college isn’t just the sticker price. Sometimes, it isn’t even the net price. The total cost of college is what amount you are actually responsible for paying, and it takes research to find the answer. Understanding the true cost of college before committing to a school can help you make smart financial decisions, and avoid taking on more debt than necessary.
