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College Planning Tools to Estimate Expenses

College Planning

4 minute read

Many families find it difficult to estimate the cost of college.

Determining the amount of money a student or parent may need to borrow in loans is based on variables that are different for every family, which is why families need reliable college planning tools to help them prepare their finances for one of the biggest investments in a young person’s life.

For families trying to figure out how much money to borrow for college, NC Assist has several tools to help students and parents borrow an amount that’s appropriate for each student’s individual circumstances.

The First Step: Families Should Review Their Financial Aid Award Letters

Once a student is accepted to a college, and they’ve completed the Free Application for Federal Student Aid (FAFSA) and other components of a school’s financial aid application process, the school’s financial aid administrator will send a financial aid award letter with available options for families to consider. This letter is vital for financial planning.

There are a few key words to understand in the award letter: cost of attendance (COA), the student aid index (SAI), and financial need. The COA includes all estimated expenses to enroll at a school for one academic year, including tuition and fees, room and meals, books and supplies, transportation, and other miscellaneous expenses. This number will vary from one school to the next.

SAI is based on information provided in the FAFSA and is used to calculate financial aid need. This number helps colleges determine eligibility for grants, scholarships, loans, and other programs, which should be outlined in the financial aid award letter.

Calculating Personal Expenses and Loans

Students should accept all scholarships and grants offered to them because it’s money that does not have to be repaid. Students who are confident they can manage a work-study program and academics may also want to accept work-study opportunities on campus.

After grants and loans, families should consider how much in savings and income will go toward the cost of attendance. Student loans can help bridge the gap between scholarships, grants, work-study, savings and income, and the total cost of attendance.

Calculating Student Loans and Payments

Students and parents who take out loans to cover the rest of the cost of attendance want to know they are only borrowing what they can afford to repay. Fortunately, there are several NC Assist loan tools to help families feel at peace knowing they’re borrowing a reasonable amount of money for their individual circumstances. The loan estimator can help you determine the estimated amount of monthly payments based on how much you borrow.

The Smart Borrower Calculator can help students avoid borrowing too much money, based on their career path and other variables. The calculator considers a student’s state of residence, field of study, and desired career to determine their earning potential after graduation. Most experts recommend borrowing no more than a students anticipated first-year salary.

Compare Loan Fees, Rates, and Terms

An important part of securing the most affordable student loan is to pay close attention to interest rates and fees.

A student’s financial aid award letter will often outline federal loans that are available to them. It’s important to shop around and compare interest rates before taking out any student loan, and families should consider private or alternative lenders when researching their loan options.

NC Assist, a nonprofit lender, created this 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 will save borrowers money.

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

Learn more about how NC Assist can help parents and students pay for college on our website.

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