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Figure out what you can afford before beginning college search
If you have teens in your home, there is a great likelihood that you will begin the college search process in the next couple of years, if you have not done so already.
While there are numerous factors you and your child should consider in selecting their ‘dream school,’ one should be the cost of attendance.
We read often about how these costs have escalated over the past many years, outpacing inflation. At the end of the day, your child should pick the college that is right for him or her, but there are some financial aspects to consider BEFORE the search begins.
Perhaps you are rich so rich, in fact, that you can say to your teen, “Explore any college you want because the money is there to pay for (even) the most expensive college.”
It is more likely, however, that you are like the Richardson family. We are NOT rich so we made some practical decisions early on that effectively limited the types of schools our children considered (and we have two currently in college, plus a high school senior headed to school next fall).
Community colleges are a terrific option if cost is a major concern. Many students attend a local community college because of financial reasons; they can live home, plus tuition and fees are much lower than at four-year schools. Many community college students actually work full- or part-time jobs while attending school as well, making this option appealing to many families.
Many families want their children to have a ‘four-year school’ experience. There is quite a variety in types of four-year schools, both in amenities and costs. Figure out what you can afford and create some expectations for your child’s search process. Saying “NO” to schools outside of the price range early can limit angst later.
Our mantra has always been, “We will pay for in-state tuition.” In most universities, room and board (food) plans are comparable in cost, so we considered that as ‘even.’ But tuition and fees are quite variable in cost.
Private tuition and out-of-state public tuition can be 3 to 4 times higher than the tuition at an in-state four-year school. Pick a couple of schools and compare. You will probably get sticker shock if you have never looked at costs.
So did our mantra mean that our children could not consider private or out-of-state colleges? Absolutely not! They understood, from probably about eighth grade, that they COULD consider other options, but that they would have to get scholarships that would effectively make the cost of attendance at their choice school equivalent to the cost of a school in the state in which we were living.
One of our caveats, too, is that we did not want our children to take out student loans. We would cover any of the costs, but we elected, because we could, to not have our children leave college with student loan debt.
I realize this is not an option for every family. Loans are not a focus of this column, but they are available to families who qualify financially.
Your children may be able to qualify for scholarships. Go ahead and visit schools’ Web pages to see what types of scholarships are available. Many schools offer academic, alumni, arts, athletic, and community service scholarships. Some schools have a sliding scale, based on a student’s high school grade point average and test scores, which reduces or waives out-of-state tuition and fees.
Scholarships may be small or can, in some situations, cover the full cost of attendance (including room and board). Many universities list what is required for consideration for scholarships on their websites.
Our son attends a Virginia college, while our daughter is at an out-of-state school because she received scholarships that reduced her costs to much less than what we pay for our son.
When you decide early what your cost parameters are and communicate them to your children, the number of universities to be considered will be limited to those you can afford. My husband and I did not want our children to leave college with a financial burden, nor did we want to be burdened ourselves.
We know people who have taken second and third mortgages on their homes so that they could send their children to the priciest of private schools. That model did not work for us, but maybe it does for you. It’s your choice!
This is one in a series of columns by University of Mary Washington College of Business faculty on various aspects of finance and economics as they affect our readers. Send suggestions for future topics to email@example.com. Lynne Richardson is the dean of the University of Mary Washington’s School of Business and a marketing professor.