Photo by Markus Spiske on Unsplash
It’s that time of year…. March Madness! Time to get your game on sports fans!
At least, that’s what I have heard.
Truth is, I know next to nothing about men’s college basketball. In fact, I probably couldn’t even name four of the 68 men’s college basketball teams participating in the tournament, much less try to predict which teams will make the Final Four.
Apparently, however, it’s a thing. According to the American Gaming Association, over 40 million Americans will test their sanity as they fill out their brackets and place their bets as to who will win the coveted NCAA men’s basketball tournament. Over $10 billion in bets will be placed on this year’s event before the month is over. Odds of completing a perfect bracket (whatever that means): 1 in 9.2 quintillion.
Something I do know. College tuition is insanely expensive.
If you have kids going to college for the first time next fall, the real madness begins when you get your college admissions letters and schools tell you how much you will need to fork over to attend their school.
Numbers like $10,000 to $25,000 per semester are not uncommon. According to the College Board the average cost of tuition and fees at a private college is over $38,000. Add in room and board and you may be looking at total cost of attendance north of $70,000 per year.
Of course, those are just averages. And they don’t take scholarships and other forms of financial aid into consideration. How much you actually pay can vary widely from the so-called sticker price schools publish on their website.
Along with your college acceptance letter you will probably receive a Student Aid Report. The SAR details what your tuition, fees and other expenses will be, as well as the amounts you can expect to receive in scholarships and grants.
Students and parents may be disappointed to learn that their “financial aid package” often consists of little more than loans and work-study.
Below are 3 suggestions for parents who get hit with crazy expensive college tuition bills this spring.
First, always, always, always have a plan B, C, and D.
When I work with parents one of the biggest mistakes I see is that they and their student have pinned their college hopes on one school and haven’t done any research to determine what it will cost or how they will pay for it. Worse yet, they have no other schools lined up if their first choice doesn’t work out or is too expensive.
If you have narrowed your school choice down to just one college and that college is an expensive school that offers you no financial aid, you will have few options other than to pay them their asking price. Having two or three affordable colleges on your list of acceptable schools will give you some flexibility when making your final college selection.
The biggest factor that determines how much you pay for college ALWAYS comes down to the school your student chooses to attend.
For example, state colleges and universities like the University of Kansas, a major contender in the March Madness contest, often come with steep price tags for non-residents. According to KU’s website, tuition and fees for non-resident students are about $27,500 per year, more than double the rate for Kansas residents.
Other schools on your list may offer tuition reciprocity, have a lower net cost of attendance or offer more generous financial aid packages, especially for students with strong academic merit.
Don’t rule out private colleges and universities. Talented students may qualify for a significant amount of merit-based financial aid many private schools, even if mom and dad have a high income or have saved a lot of money for college. In fact, they could even qualify for significant need-based financial aid at many of the most expensive elite private colleges around the country.
Of course, there is always your home state’s university or colleges where many families often find the lowest net price.
Second, appeal your financial aid award. Schools that offer merit-based financial aid often have a process for appealing your financial aid award. While most schools don’t negotiate price or financial aid, most do work with families on a case-by-case basis. If you appeal your financial aid award, a school may increase their financial aid offer.
Typically, the student or her parents write a letter explaining their situation and why they feel the award should be higher. Be sure to include the specifics about your financial situation, why you want to attend that school, and any other relevant information that could help your case.
For a great article and podcast on how to write a great financial aid appeal letter, click here.
There is no guarantee that your appeal will get you more financial aid, but a successful appeal could result in about $2,000 or more of additional financial aid per year.
Third, be prepared to say “No”. No one wants to say “no” to their kids after they have worked so hard to get into the school of their choice. Heck, I have a hard time saying “No” to my kids’ requests for shamrock shakes this time of year.
Unfortunately, sometimes the math just doesn’t work out. While a shamrock shake may be in your price range, college tuition at the most expensive schools may not be.
Collectively, our kids owe over $1.2 trillion in student loans. In Minnesota the average amount of loan debt per student is $31,915. Your kids might hate you for a while, but in the long run they will appreciate not having a mountain of student loan debt to pay off after graduation.
To see how students in your state stack up, click here.
What’s more, college tuition for your undergrad is just the tip of the iceberg. Your kids may want to be doctors, lawyers, veterinarians, healthcare workers, teachers, and other professionals. To do that they will need advanced degrees beyond their 4-year bachelor’s degree.
If they spend everything you have and borrow heavily against their future earnings, there may be nothing left to spend or borrow if your kid’s go to an expensive stretch school that you and they can not afford. Saying “no” to a crazy expensive college now, could open the door to other opportunities down the road.
Oh, for the record, my money is on South Dakota State to win it all. Even if they don’t win the national championship, SDSU is a slam dunk when it comes to winning the game of paying less for college. With a total cost of attendance under $20,000, SDSU is among the least expensive colleges in the country.
Go Jack Rabbits.
To discuss any of the topics in this blog or to learn more about how we can help you Cross The Bridge To A Confident Retirement, please contact me through my web site mikebranch.net, call me directly at 651-379-3935 or email me at mpbranch@focusfinancial.com.