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Understanding College Costs

College can be expensive and costs are likely to keep climbing in the coming years. The good news is that you and your family probably won’t pay the price you see listed on school websites and brochures, thanks to a variety of aid, grants, and scholarships.

Sticker Price vs. Net Price

The “sticker price” is the estimated cost of attendance before aid from the college or university, federal grants, or scholarship money is applied. About 60% of all college students receive grant aid, averaging $1,800 per student at two-year public colleges, $3,300 at four-year public colleges and $9,600 at private four-year colleges.*

Getting to the Net Price

Starting each October, you can fill out the Free Application for Federal Student Aid (FAFSA). This form asks questions about your family’s financial situation and helps the government determine what’s called your “Expected Family Contribution.” The EFC is the amount of money you or your family is expected to contribute to your college expenses each year.

Once your EFC has been determined, colleges will look at this number and your academic performance in high school, as well as the cost of attending their school. Based on all of these factors, they will determine the types of tuition reductions and grants they are willing to offer, leaving you with a net price you’ll have to pay. Many schools have net cost calculators on their websites that you can use to estimate the amount before submitting all of the paperwork.

Covering What’s Left

Even with the help that may be offered, you may be facing a bill for what the government expects you to cover with savings, income, or other funds that you may or may not have. Approximately 70% of students borrow some amount of money for college. Be sure to look for the information about loans available to you through the federal government, which should be listed in your financial award letter. These public loans will usually cost less in the long run, as their interest rates are lower than those for private loans. You and your family can also choose to apply for private loans to pay for additional college and living expenses.

*Source: Know How to Go

Learn More

Figuring out how to pay for college can seem complicated, but Next Steps Idaho has resources to help you understand costs and the process.

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