The Cost of College: Don't Pay the Sticker Price

Kristin Sun

Just last month at college campuses across the country, thousands of young men and women threw graduation caps into the air to celebrate achieving a major milestone. They were done! Similarly, sitting in the audience were their proud parents, silently rejoicing because they, too, were done – done paying for college! While these grateful parents have reached the end of this road, for others with children in high school or younger, paying for college looms in their near future. Lucky for them, many tools are available today to help navigate the unknown landscape of paying for college. 

Interestingly, each of those newly-minted diplomas might look the same, but the underlying cost of each is vastly different. The sticker price, or the full tuition rate published on a school’s brochure, is rarely paid in full. Private universities use the high sticker price as a starting point for their financial aid offer, whereas public universities offer far fewer breaks, and often with none to those families in high income brackets. While Sand Hill’s client base may not qualify for needs-based financial aid, merit-based awards and scholarships are definitely on the table. Private universities offer merit awards to lure desirable students to their campus. The more desirable the student, the larger the award.

To help inform parents of the true cost of attendance, we recommend researching each school of interest for data points such as full tuition, room and board (on campus or off), and books and supplies. Most importantly, parents should understand the average net price paid at each school. The College Scorecard, a website launched by the Department of Education in the fall of 2015, allows users to search for colleges and uncover the average cost of attendance broken down by family income level. In fact, it purposely de-emphasizes the full tuition price tag.

Another tool available is the College Navigator, published by the National Center for Education Statistics. This tool is more robust (and a bit less user-friendly), providing multiple years of data on tuition, enrollment, admissions, programs and majors, and even campus security. It also further breaks down the total cost of attendance by expense type. Per the College Navigator, Stanford University’s tuition for the 2016-2017 school year was approximately $48,000. Yet, per the College Scorecard, the average cost with a family income over $110,000 was $36,240 – a savings of almost 25%!

Utilizing these tools correctly can make a significant impact in the college planning process for parents. Importantly, even the wealthiest families often pay less than the full sticker price, especially at private universities. If you have your heart set on sending your children to your pricey alma mater, just remember you are not automatically signing yourself up for the full tuition amount. A little research and planning can go a long way, so use these tools to fully educate yourself on the true cost of college. For guidance on how to navigate the college planning process, or for other strategies on bringing down the cost of college, contact your Sand Hill Wealth Manager.

Sources: National Center for Education Statistics, U.S. Department of Education

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