3 Things To Consider When Deciding On A University
From the Desk of Deacon John Wilson
When your 12th Grader is accepted to his or her first colleges, it probably will be a great relief to them and you! However, my recent calls, texts and emails indicate that there is some confusion about what should be done next - or not done at all.
For each school, here are the steps you should go to be assured of the cost of the college through PRIOR to depositing for or agreeing to enroll in a given school - no matter how badly the student wants to go to the school. NOTE: Students will be very convincing that a decision should be made immediately and know how to make you feel worried or guilty.
1. HOW MUCH DOES COLLEGE COST?
This pre-supposes that you have the Financial Aid Award. It’s normally sent to an ONLINE portal or e-mail to the student.
Under no circumstances agree with your youth that they can attend a college nor deposit for enrollment to the college without:
(A) having the Financial Aid Award in hand and,
(B) determining how much you owe for the college – which is usually NOT explicitly on the Financial Aid Award.
However, you can use the FA Award to determine how much you will pay for the college.
All you will need is the Direct Cost of the College (Tuition + Room/Board).
You can call the school or use their website by “Googling” using the college name and “Cost of Attendance”.
Once you have the Direct Cost do the following easy calculation using the Financial Aid Award:
DIRECT COST MINUS TOTAL FINANCIAL AID AWARD MINUS WORK STUDY MINUS PARENT LOAN = AMOUNT OWED FOR ONE YEAR OF THE COLLEGE.
There is no need to rush. You have until May 1st! Wait until you have the same cost data from all colleges to which your student has applied. Again, your student may not want to do this since they normally have one school on which they are focusing.
Try your best to understand that your youth should get the school they earn with grades and test scores, not the one that they want.
Please resist the thought that students are entitled to the “school of his or her choice”. If you do this, you will not feel compelled to overpay for college.
How much per month will you owe for the college for 10 years of repayment of the Parent Loan for Undergraduate Student (PLUS)? Remember, you will probably be taking out a loan each year for 4-5 years. In the recent past, I have had parents agree to the first year of the PLUS only to have to pull their student out when realizing that they cannot take on the 5 years of debt. At the end of this article there is a parent loan table to show the payments needed and interest that will be paid for your loan.
2. COMPARE THE COST OF COLLEGES
3. ARE YOU WILLING TO TAKE THE DEBT REQUIRED FOR YOUR YOUTH TO ATTEND COLLEGE?
How much per month will you owe for the college for 10 years of repayment of the Parent Loan for Undergraduate Student (PLUS)?
Remember, you will probably be taking out a loan each year for 4-5 years. In the recent past, I have had parents agree to the first year of the PLUS only to have to pull their student out when realizing that they cannot take on the 5 years of debt. At the end of this article there is a parent loan table to show the payments needed and interest that will be paid for your loan.
Parent Loan chart -
7.9% Interest Rate - 10 years
Amt. Borrowed
$20,000
$40,000
$80,000
$120,000
$160,000
$180,000
Amt. to be Repaid
$28,992
$57,984
$115,968
$173,592
$231,935
$260, 928
Monthly Pmt
$242
$483
$966
$1450
$1933
$2174
Interest
$8992
$17,984
$35,968
$52,592
$71,936
$80,928