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How much will college cost my family?

Posted by Lindie Johnson on Nov 7, 2014 9:30:00 AM

Over the past sixteen years at College Planning Center of Rhode Island, we have heard this question timeiStock_000040150030Small and time again: "How much will college cost my family?" This is a complex question with an equally complex answer but it really all comes down to two things: how much financial aid your family is eligible for and what school your child attends. 

Your Expected Family Contribution

So how much financial aid are you eligible for? Financial aid eligibility is determined by two different formulas: the Federal Methodology and the Institutional Methodology. The Federal Methodology is the formula used the the federal government  to determine your Expected Family Contribution, often referred to as your "EFC." Your EFC can only be determined one way - by completing the FAFSA. You need to complete a FAFSA for every year your child is in school, and your EFC can change from year to year as your family's circumstances change.

We are often asked what goes into determining the EFC. Family income, student income, family assets, student assets, the age of the oldest parent, the number in the family, the number of college-aged children in the family, among other factors, determine your family's EFC. When you receive your EFC, you may be wondering how anyone expects your family can pay that amount, but know you are are in the same boat as many other families and everyone's EFC is determined by the same formula.

Some colleges use the Federal Methodology for awarding their own institutional funds, including some very sizable grants. But others choose to use an Institutional Methodology. This methodology isn't constant across schools like the Federal Methodology. The school itself gets to determine what factors they use to determine how they will award their own aid and often require you to submit an additional financial aid form, such as the CSS Profile. Just keep in mind schools are not allowed to use their own Institutional Methodology for awarding federal-based financial aid.  

Your financial aid eligibility

The second factor that determines your financial aid eligibility is the school your child chooses to attend. While your family's EFC remains constant, your eligibility changes. For example. if your EFC is determined to be $10,000 - no matter if you choose to go to Rhode Island College or Providence College - your EFC won't change.

What will change is the amount of aid you are eligible for because the price of each college is different. Using the above example again, if your EFC is $10,000 and the school you are attending is $30,000 a year, your financial aid eligibility is $20,000. If the school you are attending is $10,000 a year, your elgibility is $0. 

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The last factor to consider is how much of your financial need is each college able to meet. In a perfect world, all schools would meet 100% of a family's financial need. So, if your EFC was $10,000 - no matter where your child applied and chose to go - you would know you wouldn't pay no more than $10,000 each year. Unfortunately, this is simply not the case. Most schools simply cannot afford to meet 100% of financial need for all of their students, so if your EFC is $10,000, your financial aid package may still require you to pay $12,000, $15,000 or $20,000 (as examples). 

The Net Price Calculator

Before your child applies to schools, you can get an idea of how much your family will need to pay to attend that particular school by using the school's Net Price Calculator. Each school is required to have one and it's likely you'll find it through the school's financial aid website. Just keep in mind that this tool only provides estimates based on the information you input, so if the figures come back as less than desirable, it doesn't necessarily mean that you will not be able to afford it. Still encourage your child to apply, but be realistic about how much you can manage to pay for this particular school and make sure he or she has an understanding and expectation of what simply will not be affordable for your family.

Read more about how to apply for financial aid.  

 

Topics: College Financial Aid, Borrowing for College, Financial Education for Students