Strategies to prevent unexpected high tuition fees when enrolling in college:
"Consider college expenses like you're buying a property, advises Beth Walker, author of 'Buying College Better' and 'Never Pay Retail for College.'
As a financial advisor and certified college planning specialist, Walker suggests avoiding a predicament common for many families: Their child applies and gets into schools they can't afford because the schools don't provide enough aid. Parents then attempt to manage, regardless of the debt involved. Instead, she recommends families evaluate their budget as early as the 9th or 10th grade to determine what they can afford. Additionally, she suggests assessing a child's talents and interests to match them with desired majors and careers. This can help target the right colleges to apply to.
Mike McKinnon, executive director of the National Institute of Certified College Planners, describes the ideal college as one where a student can graduate in four years or less, possessing a marketable degree, and minimal debt.
In helping families align affordability with a student's academic and social needs, McKinnon advises against assuming high-prestige schools will be best due to their status alone. He emphasizes that success in life isn't limited to Ivy League schools, especially when a student isn't offered significant aid to attend.
Todd Fothergill, founder and CEO of Strategies for College, warns that many brand-name schools only offer need-based aid, not merit-based. If a family doesn't qualify for need-based aid but makes too much for it, they could be responsible for covering the entire tuition, room, and board costs, which can exceed $90,000 at some U.S. colleges.
Establish financial boundaries before college search
Fothergill created a free calculator called CostHero that allows parents to determine their financial resources available for a child's college education. It provides an affordability range: The lower number represents what can be paid without taking on debt, and the higher number represents what can be paid with a federal Parent Loan for Undergraduate Students (PLUS).
"If you can't write a check for $90,000 a year, establish financial restrictions to protect your retirement," Fothergill said.
CostHero factors in income, savings, a child's earnings from summer jobs, family gifts, federal Stafford loans, and qualifications for the American Opportunity Tax Credit. It also generates a debt-to-income (DTI) score similar to what a mortgage lender uses. Ideally, DTI shouldn't exceed 36% for housing costs and 43% for total debt.
If a family's DTI is close to or higher than 43%, they might face financial difficulties during their child's college years, Fothergill said.
"If families determine the range of affordability before the college search, the outcomes are more favorable. For example, if a family knows the range of affordability is between $30,000 [a year] with no parent debt and $50,000 with parent debt, then any college within that range is, by definition, affordable," Fothergill explained.
Net cost represents the actual cost of attendance after accounting for potential aid (e.g., grants and scholarships).
Identify where your student may qualify for the most aid
Academically accomplished students tend to receive the largest tuition discounts in an incoming class. "The student must be among the top 25% of those admitted," Walker said.
Admission into the top 25% is based on SAT or ACT scores and a high, unweighted GPA from a challenging high school curriculum, further enhanced by AP courses. As a child is more likely to be among the top quarter at some schools but not others, Fothergill and Walker both suggest focusing applications on those schools where your child has the best chance of being in the top cohort to maximize merit-based aid."
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College advisor Fothergill devised another resource named ListHero, utilizing data from university admissions officials about their admission criteria. This tool assigns a score to students, indicating their competitive standing at a specific institution compared to admitted peers and potential eligibility for reduced tuition. At the moment, the tool is exclusively accessible to college consultants for a charge, but Fothergill intends to develop a complimentary version for public use.
In your quest for information on test scores, GPA standards, expenses, and financial aid, Fothergill advises scrutinizing the Department of Education's College Scorecard, the site CollegeData.com, and the College Board.
Additional strategies to cut college expenses before application
As your children navigate high school, they can implement various tactics to lessen their overall education cost.
One approach is exceling on the PSAT to qualify for the National Merit Scholarship competition.
Another route is enrolling in AP classes. If your school does not offer them, consider the Modern States Education Alliance's Freshman Year for Free program. This initiative provides free AP exam preparation courses and covers the costs for students to take the AP or College-Level Examination Program (CLEP) assessments administered by the College Board.
Scoring the bare minimum AP marks a college demands for granting college credit can significantly decrease your overall tuition expenses.
A third alternative is investigating if your state offers a program providing a year of free in-state community college. Credits from these classes can be transferred to state universities, allowing your child to earn their degree. If you're planning to attend a different college, ensure it acknowledges the credits from community college courses you intend to take.
Ultimately, beginning the research and budgeting process in advance can alleviate stress, debt, and emotional distress in the long run. In Walker's words, "We need to be more thoughtful about this investment."
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In the realm of business and financial planning, Beth Walker, an author and college finance expert, suggests treating college expenses as if buying a property, emphasizing the importance of avoiding excessive tuition fees that lead to debt.
Success in life doesn't necessarily require attending high-prestige schools, despite their status. As Mike McKinnon, executive director of the National Institute of Certified College Planners, notes, it's more valuable for a student to graduate from a college offering a marketable degree with minimal debt, even if it's not an Ivy League institution.
