5 Costly College Mistakes You Can’t Afford to Make
Jan 04, 2022
For many families, shopping for the right college can look like shopping for a new car. Too many get caught up in the style and luxury and overpay, pushing them into excessive debt.
At SimpliCollege, we stress the importance of finding a college with the best social, academic, and financial fit for your lifestyle. The first step is becoming aware of the common challenges families tend to face. To help you lower the cost of college, we've gathered our top five costly college mistakes you can avoid.
1. Not negotiating the best financial aid offer.
Did you know that you can negotiate with colleges to get a better price? Negotiating is a proven tactic with many private colleges, though it is more challenging to deal with state colleges. The key is getting leverage. Having multiple offers from competing colleges gives you the best opportunity for success.
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2. Failing to exhaust scholarship opportunities.
Scholarships are by far one of the best ways to reduce college-related costs. Since you're not responsible for paying them back, it is essentially free money that you can put toward your education! Many students miss out on substantial financial opportunities by not doing enough research on scholarships. Try to exhaust all of your scholarship options and regularly apply to increase your chances. SimpliCollege has a Scholarship Resource that can help you search through billions of scholarship dollars to find the right ones for you.
3. Parents or grandparents co-signing for their children.
Co-signing on loans is always done with the best intentions but has negatively impacted thousands of families' credit and financial stability. Many families ignore the unfortunate truth that when you co-sign for a loan, you are also responsible for it. Because the federal government backs most of these loans, they are non-dischargeable through bankruptcy. If parents and grandparents must declare bankruptcy due to insufficient funds, many have their paychecks AND social security payments garnished!
We're finding that more college grads cannot find jobs immediately after they graduate or can't find jobs that support their desired lifestyle. Many graduates make much less money than they expected. As a result, they cannot pay their student loans or can't afford the necessities to live. If the student cannot make payments on their loans, the responsibility can fall on the parent/grandparent as the co-signer. Before you sign on the dotted line, think twice and practice some tough love – it may help your student in the long run.
4. Overlooking fees on your financial aid package.
It is essential that you methodically walk through your financial aid package. You need to understand each line item. Is it a gift, grant, or scholarship that doesn't have to be repaid? Is it a loan? Is it a fee? With colleges trying to avoid raising the tuition fee by more than 4-6% per year, we are seeing that they are adding numerous fees. These fees can add up to $2,000 -$3,000 per year in some cases.
Recently we came across a financial aid package that had a fee of $35 per semester for a box fan. Would you pay $280 through 4 years to essentially rent a fan? Fortunately, the student noticed the fee, removed it from the package, and brought her own fan. Don't pay fees without clearly understanding them. Make sure you ask questions and try to have fees removed that you feel are not necessary.
5. Visiting colleges that you cannot afford.
This is a very common mistake that you can easily avoid. At SimpliCollege, we stress the importance of finding the right social, academic and financial fit when choosing a college. Before heading out on a weekend of college tours and visits, take a step back and consider if the cost of the college is something that you can realistically afford. Considering the cost before visiting the campus will prevent you and your student from becoming emotionally attached. If your family can't afford it, you risk putting yourself into excessive debt for something that may not pay off.
