The College Forum is opening a new thread to discuss both financial aid and financial planning for a college education. BOTC was motivated to open this new topic as a result of both discussion on our forums, the essay presented below, and recent discussions on our other sports website College Forum.
Financing a College Education - Some Hard Numbers
If you read forums such as College Confidential (dedicated to admissions, programs, academics, and environments at college campuses) and follow schools in the Top 50, you will find that the biggest reason for admissions disappointment comes during the awarding of financial aid. Many students and their families will be forced to drop their dream schools when handed a statement of what the bills will be.
Here is the simple fact : Most private institutions among the Top 50 Universities and Top 20 Liberal Arts Colleges are going to be $40,000 per year tuition, $10,000 per year in room and board, and $3,000 in books, spending money, and travel costs.
Too many families are ignoring what it means to actually pay $53,000 per year from your NET INCOME towards a college education. The expectation is that a miracle will happen with funding - either through academics, athletics, or financial aid.
The truth is that you must plan to save $220,000 for a full private school price tag. This means setting aside $10,000 per year per child every year from the time the child is born through college graduation in order to have that cash available.
Suppose your child is now about ten years of age and you have not started a college savings plan? That same private college price tag requires you to now start saving $20,000 of your NET INCOME per year per child at ten years of age.
If scholarship money comes through for you, you will have a built-in savings program. However, a word of caution comes with that sports scholarship. If your student-athlete receives a 0.25 scholarship - which is $10,000 per year - you will still need to come up with $40,000 per year to complete the story.
Even if you knew your ten-year old son or daughter would receive a 25% discount eight years later, you would still need to save $15,000 per year if you have not started when they were younger.
Hopefully, you get the point. There is no magic formula that will make up the difference in tuition payments aside from your own family budget. Start saving early and start saving now.
Finally, a word on financial aid : If your family has a gross income of $150,000, has cash assets of $100,000, and owns your own home, you can rest assured that you will be outside of most financial aid programs. (These parameters have been tested with many financial aid calculators.)
