When it comes to deciding what college to attend, finances are a key piece of the puzzle. College is a major financial investment, and while it’s an investment that pays off in the long run (college graduates earn 80% more on average than those without a degree, according to the latest research), the initial financial commitment can be a challenge. Finances need to play a role in a family’s decision making process, and it’s important that these conversations involve the whole family. Here are some of the questions we think you should ask yourselves (and the schools under consideration) when making your college decision.
Reviewing Your Offers
Once accepted to a college, you’ll have to evaluate its financial aid offer. When reviewing financial aid awards from each college, be sure to ask the following questions:
- Can I count on this award for the next four years? Academic scholarships typically have minimum GPA requirements for renewal, and need-based aid can change from year to year based on changes in financial circumstances (including having siblings either enroll in or graduate from college). Ask the Financial Aid Office about renewal requirements and how anticipated financial changes might affect your aid package.
- What does this loan amount equate to in monthly payments? It’s easy to sign on the dotted line for a loan in the abstract, but you should also determine how the loan amount will affect your future lifestyle. To do this, use a simple loan repayment calculator on a website like www.finaid.org.
- Can this offer be reconsidered? Before accepting or declining enrollment based on a college’s first offer, ask them for more money based on any special financial circumstances or better offers you have from other schools.
Assessing Financial Outcomes
Before committing to a college, it’s a good idea to investigate how previous students have fared after attending the school. While your results may vary from others’, valuable information can still be obtained by asking some of the following questions:
- What is this college’s 4-year graduation rate? When determining your bottom line, you need to know if the tuition bill is a 4, 5, or 6 year commitment. Use the National Center for Education Statistic’s College Navigator to locate the 4-year graduation rates for colleges under consideration. A low graduation rate could simply indicate a high percentage of non-traditional, working students, but could also indicate a lack of space in required courses. Ask the Admission Office to explain any concerning statistics.
- What is this college’s student loan default rate? Also available on the College Navigator, a high default rate may suggest graduates having trouble finding adequate employment upon graduation. And speaking of employment….
- How likely am I to be employed in my chosen field upon graduation? LinkedIn offers an interesting new college ranking system based on career outcomes. You can also check in with the college’s Career Services Office about internship opportunities, employers that recruit on-campus, and graduate employment rates, all of which will help ascertain the likely return on your college investment.
Though the above list is certainly not exhaustive, it is a good starting point when factoring financial considerations into your college decision-making process. Best of luck as you weigh your options and embark on this new adventure!
Over the next four weeks, we’re rolling out a series of blog posts to help seniors and their families make the final decision about where to go to college. Join us next week when we turn to academic considerations.