College Planning Tools to Estimate Expenses

3 minute read

Essential Tools for College Budgeting

Many families find it difficult to accurately estimate college costs and determine the appropriate amount to borrow. Because these variables differ for every family, reliable planning tools are essential for preparing finances for one of the most significant investments in a young person's life.

For families figuring out how much money to borrow, NC Assist provides several tools to help students and parents borrow an amount appropriate for their individual circumstances.

The First Step: Reviewing the Financial Aid Award Letter

Once a student is accepted to a college and has completed the Free Application for Federal Student Aid (FAFSA), the school’s financial aid administrator will send a financial aid award letter. This letter outlines available options and is vital for financial planning.

Key terms to understand in the award letter are:

• Cost of Attendance (COA): The estimated total expenses for one academic year, including tuition and fees, room and meals, books and supplies, transportation, and miscellaneous expenses. This number varies by school.
• Student Aid Index (SAI): A number based on FAFSA information, used to calculate financial need. This helps colleges determine eligibility for grants, scholarships, loans, and other programs outlined in the award letter.

Calculating Personal Expenses and Loans

Students should accept all scholarships and grants offered, as this is money that does not need to be repaid. Students confident they can balance work with academics may also want to accept work-study opportunities.

After accounting for gift aid and potential work-study income, families should determine how much savings and current income will go toward the COA. Student loans can then bridge the remaining gap.

Calculating Student Loans and Payments

When taking out loans, students and parents want assurance they are borrowing only what they can afford to repay. The NC Assist Loan Estimators helps determine estimated monthly payments based on the total amount borrowed.

Compare Loan Fees, Rates, and Terms

Securing the most affordable student loan requires paying close attention to interest rates and fees.

A student's financial aid award letter will detail available federal loans. It is important to shop around and compare interest rates before committing to any loan, including researching private or alternative lenders.

NC Assist, a non-profit lender, created a loan comparison chart to help borrowers quickly compare NC Student and Parent Assist loans to Federal Direct Loans. Unlike federal loans, NC Assist does not charge application or origination fees, which saves borrowers money.

NC Assist loans are available to North Carolina residents attending in-state or out-of-state schools, and to out-of-state residents who enroll at eligible North Carolina schools.