What’s the best way to pay for an expensive college?

What’s the best way to pay for an expensive college?

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STATEN ISLAND, N.Y. — The annual cost of tuition at a private university can be more than many people’s yearly paycheck. But if you or your child has his or her heart set on a costly college, you’ll need to tap into financial aid and/or scholarships.

If you pursue the loan route only, you or your parents will likely be drowning in debt.

“When you have to use the words ‘expensive’ and ‘college’ in the same sentence, your child is going to the wrong school,” said Frank DeCandido, a Prince’s Bay-based certified public accountant (CPA), certified financial planner (CFP®), and a member of the National College Advocacy Group (NCAG).

“Before a student applies to a school, the parent should know what the school costs. When you discuss costs you would need to know not just the tuition and room and board, you also need to know the cost of supplies and books, computers and transportation,” he added.

We caught up with DeCandido for some expert advice about choosing the best college without having to drown in debt to pay for it.

Question: What’s the best way to pay for an expensive college?

DeCandido: “You need to realize [college] costs will go up [yearly] each by approximately 3-5% based upon the school.

When I sit down with students I also estimate a fifth year for the student since statistically, according to the National Center for Educational Statistics (www.nces.ed.gov). The 6-year graduation rate for first-time, full-time undergraduate students who began seeking a bachelor’s degree at a 4-year degree-granting institution in Fall 2014 was 64%. That is, 64% had completed a bachelor’s degree by 2019 at the same institution where they started in 2013.

In Bloomberg Businessweek’s Sept. 5, 2022 addition, there was an article called “College Will Still Cost You,” the article quotes Ryan Craig, managing director of Achieve Partners, who estimated 70% of students currently enrolled in two-or-four year college can expect a “negative outcome in terms of failure to complete or graduating into underemployment.”

In addition, you also have the cost of the interest on the loan you would need to take to pay for the school of your choice.

The first step is to evaluate the award letters you will receive once the student is accepted to a school. The school will give the total cost of attendance and then give you information on financial aid, merit aid or other grants available at the school. The remaining amount would need to be paid or borrowed for the student to attend the school. This is where the parent needs to make a financial decision of which school is affordable.

Paying for college would include a combination of loans, grants, scholarships and work-study, as well as the ability to get tax credits for education. The Office of Federal Student Aid, an Office of the Department of Education, is the best place to start. Grants, loans, and work study funds are offered each year through the www.studentaid.gov website. You can see a short video at https://www.youtube.com/watch?v=Pn4OECMTh5w.

You should first fill out the Free Application for Federal Student Aid (FAFSA) form to be able to apply for federal loans. Stafford loans are available for students ranging from $5,500 for freshman to $7,500 for third year and beyond for undergraduate school. A portion of these loans can be subsidized meaning there is financial need for the student.  These Stafford Loans are taken out in the student’s name.

There is a maximum amount of $31,000, and no more than $23,000 may be subsidized and the current percentage rate is 4.99%, which will change each year. In addition there is a 1.059% loan fee.

For any additional amount owed, the parent can apply for Parent PLUS loans.  To receive a parent PLUS loan, you must:

There are also private loans for both the student and the parent, however the loan rates tend to be higher. For more information you can go to the studentaid.gov/federal-vs-private website for more information.

According to Consumers Advocate, a listing of private loans would include: College Avenue Student Loans, Sallie Mae, Earnest, Custom Choice, Union Federal, Credible, CommonBond and Discover. In addition, SoFi offers student loans. There are also grants, such as federal Pell Grants [must show financial need], federal Supplemental Educational Opportunity grants (FSEOG), Teacher Education Assistance for College and Higher Education (TEACH) grants, and Iraq and Afghanistan Service grants.

Regarding Scholarships, you can go to StudentAid.gov/scholarships for tips on where to look for a link to a free scholarship search tool. In New York, there is an Excelsior Scholarship (https://www.hesc.ny.gov/pay-for-college/financial-aid/types-of-financial-aid/nys-grants-scholarships-awards/the-excelsior-scholarship.html) …the student must go to either a CUNY or SUNY school and must be a resident of New York state and have resided in New York state for 12 continuous months prior to the beginning of the term.

Other scholarships include:

If you have a financial question you’d like answered, please send to [email protected] and we’ll find the right expert to answer your question.


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