Personal Finance / Unit 6: Paying for College and Big Purchases
6.1 The Cost of College and Financial Aid
Notes
The cost of attendance includes tuition and fees, housing, food, books, transportation and personal expenses. The sticker price is often higher than what students actually pay.
- Financial aid is money that reduces what you pay: grants, scholarships, work-study and loans.
- Net price = cost of attendance $-$ grants and scholarships.
- Example: tuition $8,000 + housing $6,000 + books $1,000 = $15,000. With $5,000 in grants, net price is $10,000.
- Compare schools by net price and by what you can earn after graduating, not by the sticker price alone.
- Other paths (community college first, trade school, apprenticeships) can cost less.
Practice
Which is part of the cost of attendance?
The cost of attendance covers all the costs of being a student.
Tuition is $9,000, housing $7,000 and books $1,000. A student receives $6,000 in grants. What is the net price?
Cost is $9000 + 7000 + 1000 = 17000$. Net price is $17000 - 6000 = 11000$.
Why compare net price rather than sticker price?
Grants and scholarships reduce the real cost.
Ready for more? Take the Unit 6 test.