From college acceptances to affordability: Considerations for families in the final stretch

April is a pivotal time in the college admissions process. After years of preparation, saving and investing — not to mention the countless hours spent on exam prep, campus visits and perfecting applications and essays — the finish line is in sight.

For families with college-bound students — whether this year, in the near future, or further down the road — the financial realities of higher education require thoughtful consideration. The college admissions process is not just about acceptance letters; it’s about making financial decisions that align with short-term affordability and long-term financial well-being.

The rising cost of tuition is only part of the equation. Expenses like room and board, travel, books and extracurricular activities can add $10,000 to $20,000 per year, according to the 2024 study by the College Board. Even for those who can comfortably pay for tuition, the real financial picture goes beyond the sticker price. Questions naturally arise:

• Should students contribute financially to their education?
• Does borrowing make sense, and if so, what loan structures are offered?
• Can financial aid packages be appealed for additional assistance?
• How do daily college expenses fit into the broader financial strategy?

As financial professionals, we’ve worked with families navigating many of these critical decisions. For those with a child starting college soon, the reality of writing that first tuition check is quickly approaching. For those looking ahead, understanding how to strategically approach financial aid, student loans overall affordability can help you when the time comes.

While school prestige often plays a major role in the decision-making process, weighing it against financial impact is essential. The goal isn’t just to afford college today — it’s that education costs fit with other long-term financial priorities. Now is the time for honest conversations about balancing aspirations with affordability.

If you've filed the Free Application for Federal Student Aid (FAFSA), the colleges you listed will receive your information electronically and use it to calculate your financial aid eligibility. Understanding how to decode and evaluate these letters can help you make a well-informed decision.

Here’s what to look for — and what to do if additional financial assistance is needed.

Decoding award letters and comparing financial aid packages

Each school that accepts your child should send a financial aid award letter, also known as the student aid package or school offer. It tells you what financial aid your child can expect from a specific college or university.

The letter will include the annual total cost of attendance and a list of financial aid options. Your financial aid package might include gift aid that doesn’t require repayment and other loans, which must be repaid with interest after your child graduates or leaves school.

While each award letter will differ, the U.S. Department of Education created the College Financing Plan to encourage schools to make their award letters more streamlined and easily comparable. Most award letters have several elements in common:[1]

• Expected family contribution: This portion of the award letter is the dollar amount you are expected to pay toward education expenses based on the financial information you provided when you completed the FAFSA form.
• Cost of attendance: Each school should detail the estimated cost of attendance, including tuition, fees, room and board, books and supplies, transportation and other expenses.
• Scholarship and grant options: Most award letters include multiple types of awards. This section of the letter lists awards that do not require repayment, including merit-based scholarships, need-based grants (such as institutional, state and Federal Pell grants) and employer-paid tuition benefits.
• Net costs: The aid letter will also typically state the cost of attendance minus total grants and scholarships. This annual cost must be paid out of pocket or covered by loans or other aid.
• Loan and work options: The award letter will also list available loan options, including the loan type, amount and interest rate. This section indicates whether your child qualifies for federal work-study and, if so, how much they are eligible to earn each year and how many hours they can work each week.

Understanding the award letter, including your ability to challenge the institution on how much has been awarded, can help start this part of the college process off on the right foot.

Borrowing and loan management

If you are considering borrowing to meet college expenses or having your child share in some of the costs of their higher education, there are two main types of student loans: federal and private.

Federal student loans do not require a minimum credit score and come in two types for undergraduates: Direct Subsidized Loans and Direct Unsubsidized Loans.[2]

• Direct subsidized loans: are available to undergraduate students who have demonstrated financial need. These loans do not accrue interest while the borrower is in school, during the six-month grace period, or through any deferment period afterward. After filling out the FAFSA form, students will receive a financial aid offer letter.[2]
• Direct unsubsidized loans: are available to undergraduate, graduate and professional students. Borrowers do not need to demonstrate financial need, but these loans accrue interest immediately. This means you'll be accruing interest during school, after graduation and during periods of deferment and forbearance.[2]
• Direct PLUS loans: are available to graduate or professional students or parents of dependent undergraduate students to help pay for education expenses. Direct PLUS Loans carry higher interest rates and higher loan origination fees than Direct Subsidized and Unsubsidized Loans.[2]

Unlike other federal student loans, parent PLUS loans are taken out by parents directly. While your child can make payments, if you take out this loan, you will be legally and financially responsible for repaying the full balance. The loan will appear on your credit report, not your child's.[2]

Private student loans could be an option for borrowers who need more than what federal student loans offer. Private student loans can have fixed or variable interest rates. Qualified borrowers may be able to qualify for lower interest rates and benefit from various repayment terms, incentives and consolidation options — depending on the current rate environment.[2]

Types of student loans[2]

If a loan is part of your college financing strategy, review the differences to determine which option best suits your financial situation.

College expenses – It’s not just tuition

While tuition and room and board are the biggest college expenses, other costs must be accounted for. These “hidden costs” can add up and may not be covered in aid packages. Some clients we’ve worked with look to their children to pay some of these expenses so they have “skin in the game,” especially for optional activities.

These are more than just nuisance fees; they can add up. According to Mark Kantrowitz, a former publisher at SavingForCollege.com and author of the book How to Appeal for More Financial Aid, hidden college costs can increase the price of a college education by $10,000 to $20,000 (approximately $300 to $500 per month over the course of a four-year undergraduate degree).[3]

Below is a partial list of extra costs and some ways that may help manage the expenses:

• Books and course material: Save money by exploring electronic options for buying or renting electronic versions of textbooks. You may be able to borrow textbooks or materials from friends or classmates or check if these resources are available at your school’s library. Buy used textbooks, and don't forget to sell the textbook back to your school’s bookstore later to defray the cost.
• Transportation expenses: These costs can add up, especially if your child is going to school out of state. When considering costs, factor in the expense of trips home during school breaks, especially when dorms or housing are closed.
• College activities: Participation in Greek life, sports, music, art and other activities can add expenses during your college experience. Greek life, for example, can require dues ranging from $500 to $7,000 per semester.[4] And these dues are just the beginning; if your child’s sorority or fraternity hosts events, there may be extra costs associated with those activities. There are few, if any, ways to economize on these costs other than not joining. However, depending on the school, if your child is looking for the full experience, that might not be an option.

[1] U.S. Department of Education, Jan. 20, 2025
[2] Bankrate, Dec. 7, 2024
[3] FinMasters, Dec. 5, 2023
[4] Edvisors, May 24, 2024
[5] Go Overseas, Nov. 3, 2024
[6] U.S. News & World Report, Aug. 6, 2024
[7] BlueNotary, Nov. 22, 2024
[8] Saving For College, Feb. 22, 2024
[9] College Reality Check, Dec. 10, 2023
[10] College Rank, January 2025

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