Let’s Talk Money and College
Let's talk money and college! As music majors start putting together their college lists, it's crucial to tackle the financial aspects right from the start. Having conversations with the caregivers and student is critical. Everyone needs to hear the expectations and realities of finances before committing to applying at different schools.
Here’s a personal take on navigating these waters, blending essential facts with my own observations and experiences.
Sticker Price Misconceptions: Many families are initially shocked by the sticker price of colleges, especially private ones. However, these schools often have the flexibility to reduce costs through financial aid and scholarships. It's essential to look beyond the sticker price, though this isn't a guarantee—always verify with each school.
Average Cost of Attendance After Aid: The average cost after aid, found on most college websites, can give you a realistic picture of what you might pay, not just what the sticker price suggests. You might even find that you're eligible for more aid or scholarships than the average student.
Merit and Talent Scholarships: I always encourage asking about merit scholarships. Schools that don’t offer these might be financially unfeasible for middle-class families, especially when the FAFSA’s estimated family contribution is much higher than what's realistically affordable
Loan Realities: Understanding the differences between subsidized and unsubsidized loans is key. Subsidized loans, where interest doesn’t accrue until after graduation, are limited and, in my opinion, not nearly enough to cover today's high education costs. Meanwhile, unsubsidized loans accrue interest immediately, which can quickly add up. Students are only offered a limited amount of federal loans in their names. For freshman year, the amount of federal student loans offered in the student’s name is $5500, with only $3000 of that amount being subsidized.
Parent Plus Loans and Private Loans: If the standard federal loans aren’t enough, parents might need to step in with Parent Plus loans or private loans. These options allow families to borrow more substantial amounts but come with different risks and obligations.
Government Advice on Loans: The government often advises students to pay interest on their loans while in school to avoid capitalizing interest. While this is sound advice, it’s not always practical. I’d say it’s hardly ever practical. Many students take out loans precisely because they can't afford college costs upfront, making it unrealistic to pay interest concurrently.
Savings. Some families save up money in different 529 plans. Many don't know this though! Even if you haven’t saved in a 529 plan, you can start one to channel college expenses through it and possibly receive tax benefits, as long as the funds are used for qualified expenses in the same year they're disbursed. This tip often goes under the radar but can be a smart move financially. Check to see if you’re eligible!
Regular Check-ins with Financial Aid Offices: As your circumstances change, so might your eligibility for different types of aid. Keeping in touch with financial aid offices especially if you and your family have big financial changes.
Navigating college costs isn’t simple. It requires ongoing conversations and realistic assessments of what you and your family can manage. Planning ahead, exploring all options for aid, and understanding the long-term implications of financial decisions are essential to making the college experience more enjoyable.
Remember, this blog post combines facts with personal insight. Always double-check the information with qualified professionals and directly with college financial aid offices. Here's to making informed decisions that help you pursue your passion in music without compromising your financial future!