College Bound: Determining your out-of-pocket college expenses

Don't be surprised if you find that many of the more expensive colleges turn out to be as affordable as your local institution.

Posted 11:56 p.m. Mar 24, 2013 — Updated 11:56 p.m. Mar 24, 2013

Christine M. Hall of CMH College Consulting

This is the final post of a three-part series with information about determining your families out-of-pocket expenses for a college once you have viewed that school's financial aid award offer. See the box to the left for past posts.

Now that you understand how a college awards your financial aid, as well as the different types of aid offered, it's time to begin evaluating exactly what they are giving you. Evaluate each school separately keeping in mind the total costs for that particular school. For each type of award, make sure to answer the following questions and take into account certain factors:

Scholarship: Is this renewable? For how long? What do you need to do to maintain it? Is it based on financial need?

Grants: Federal grants are based on need. If your need changes, you may not get it again. State and institutional aid may depend on fund availability or reserved for students with specific attributes - such as being a first-year student. Some institutional grants may be guaranteed for all four years even if your need changes. Make sure to ask if this is the case with your grant.

Loans: Be careful of loans! The rule of thumb is never to borrow a four-year total that exceeds your expected first year income after college. Make sure you know the terms of the loan. What is the percentage rate? Is it a fixed rate? When do you begin repayment? How many years do you have to repay it? There are several types of loans that are offered. Make sure you understand what they are!

Work Study: Some colleges include this in their total aid package. Others don't as the money is contingent upon the students ability to work all the hours. Makes sure to ask. Divide the award by the current minimum wage: $7.25. This tells you how many hours you must work a semester. Divide that number by the number of weeks your college is in session. This tells you what you must work a week to earn the total amount. Make sure your field of study allows time for this commitment.

Once all of these questions are answered, you are ready to determine which school is offering the best package.

It is best to start by totaling each school's tuition, room, board and required fees. Now subtract that number from the total amount of aid the school has offered.

If the remaining number happens to be positive, you may then deduct the estimated costs of books, supplies and transportation. The leftover amount is what you will pay out of pocket.

Keep in mind which schools offer the most in non-repayable funds - scholarships and grants. Remember to be aware of how much loan debt you will be accruing. You are NOT required to accept all the types of aid that are offered, so keep this in mind when you add up your aid.

Once you have done this for each school, you will be able to see which one requires the least out-of-pocket expense for your family. Don't be surprised if you find that many of the more expensive colleges turn out to be as affordable as your local institution.

Christine M. Hall, Ed.D., is owner of CMH College Consulting in Cary. Hall, who has children of her own, offers advice on the college application and decision process here on Go Ask Mom from time to time.

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