When my son’s first college acceptance arrived, we were certain it would be paid for. That’s because along with the letter, the school sent a fancy envelope, emblazoned with his name, that said “A Financial Offer Just For…”

We eagerly tore in — and our hopes were dashed. His “financial offer” was just the federal loan that almost every college student is offered.

If you’re a parent wading through your child’s college acceptances, you’ve likely been on the same roller coaster. That’s because the number on the letter may not be as straightforward as it appears. In fact, according to a recent study, one-third of acceptance letters didn’t include clear cost information.

Here are the questions that will help you figure out if your family can afford the colleges your student got into.


Merit aid is awarded to students whom the school is trying to woo. If your aspiring college quarterback is being recruited by the football coach, you probably won’t need to wait for your number, but other merit aid, such as for academic excellence, is typically included in a financial packet that accompanies the acceptance.

Eligibility is often a puzzle; each school has a different formula for determining the criteria. In our house, we found that some schools weight GPA higher than standardized tests, and others did the opposite, so be aware that a top GPA might not pull as much weight as a lofty score on the ACT/SAT or vice versa. And the most selective schools consider every approved student “meritorious,” and therefore often don’t offer merit aid at all.


Grants are gold because they represent money you don’t need to pay back, unlike a loan. Grants are offered based on the amount of “unmet need” you have, as determined by filling out the Free Application for Student Aid (FAFSA). If you have not yet completed this, do it, otherwise you won’t collect any money. This need is calculated based on the cost of attendance at each school, as compared to your expected family contribution, which is determined by the FAFSA.


Most students, regardless of family income, qualify for a federal Direct Unsubsidized Loan, provided their school and course of study meets the requirements. The loan limit is $5,500 annually for a first-year student, $6,500 for a second-year student and $7,500 annually for years three through five, subject to an aggregate loan limit.

You’ll also need to budget for expenses like room and board if you’re living on campus, books, fees and, in many cases, travel and dorm décor.

These loans are considered “unsubsidized” because you must start paying interest as soon as you start receiving them, although you don’t have to start making payments on the principal until six months after you graduate or drop below half-time status.

Direct Subsidized Loans are similar, but they are available for students who demonstrate need and thus the federal government covers the interest while the student is enrolled in school.

If you still need additional funds, once you’ve exhausted merit aid, loans, grants and your 529 plan or other college savings, you can take out private loans through other lenders, but those typically will have higher interest rates.


While every family has to decide, a rule of thumb is not to take on debt that totals more than the projected first year’s salary. But parents may want to resist the urge to finance your child’s education from your retirement. After all, you can borrow for college, but you can’t borrow for retirement. If your financial offer is less than you’d hoped, you might need to look into lower-cost options such as starting at a community college and then transferring.


You figured out the tuition, but buckle up: You’ve just started writing checks. You’ll also need to budget for ancillary expenses like room and board, books, fees and, in many cases, travel and dorm décor.

Every school offers an estimate of how much these “extras” should cost, but it will depend. Engineering and arts programs might have higher supply costs, or your child’s major might require lots of books or lab fees. Be sure to estimate this when comparing the numbers the schools provide.

Also, run some numbers for “off-campus housing,” as your child’s future apartment might cost a lot more in a major metro area than in a smaller town.

Your travel expenses will vary depending on where you are coming from. Search a few random flights near the holidays and spring break to get a sense of what airfare would run. You may, like us, decide your child will only be coming home twice a year.


If you received multiple acceptances, create a spreadsheet that clearly shows all the financial factors and compare.

For my son, it took some work to find the bottom-line numbers even with the letters in front of us.

For example, one school presented what appeared to be a very attractive merit offer, until we realized that the school had combined all four years into one sum. Another had super pricey dorms and required an all-inclusive meal plan, which feels wasteful if your child grabs a smoothie as they run out the door in the morning. A third was within driving distance, which would have kept travel fees and summer storage costs to a minimum.

That’s why it’s important to use the acceptance letters as a starting point, then add in your specific expenses. Then, you’ll find the “true” cost of attendance, something your college acceptance letter won’t tell you.

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