[1] college finance series - the tuition statement
Hello hello, first of all, congratulations to all the newly-graduated high school students! You are one step closer to becoming a self-sufficient adult, and you should be proud of that. Now that June is almost over, many of you will either be receiving or have already received tuition statements from the college you will be attending. If you’re like me, a first-generation college student who was absolutely clueless on what the tuition statement actually included, hopefully this post will help you understand the statement a little better and cut down on unnecessary costs. By no means am I an expert on these matters, so if you want a comprehensive knowledge, be sure to contact your school’s financial aid office and set up an appointment to really know what’s in your bill.
Depending on the school you’re attending, the bill may be broken down differently, but at the core, your bill should at least be divided into what the expenses are, and what financial aid you have received. Note that tuition statements are typically on a semester basis, so this is not the statement for the school year. We’ll be covering these two topics.
Typical college expenses include the tuition fee, a lab fee (if you’re taking a lab course), some sort of wellness fee, student activity fee, readership fee, and athletic fee, and room and board fee (if you’re living on campus). Let’s break this further down:
Tuition: This is pretty self-explanatory. This is the actual cost of tuition to attend this school. For most schools, this fee is based off of an X amount of credit hours typically taken (or maximum credit hours you can take in a given semester) regardless of whether you actually take this amount or less/more.
Lab Fee: This applies only if you’re taking a lab course, such as General Chemistry & Lab. If you’re not taking a lab course, you should not have this fee, and you should call your Financial Aid office about this discrepancy.
Student Activity Fee: This fee is typically used to fund student organizations and other student-led campus events. It’s how student organizations put on those awesome shows or able to have those really nice formals.
Readership Fee: This fee is applied to newspaper copies that are available at the school to you for free. Some schools will let you opt out of this, so if you’re not the type to pick up a paper copy of USA Today, you can try and see if you can opt out.
Athletic Fee: Also self-explanatory. Depending on the school, you either will receive free admission into any school-sponsored athletic events or a discounted admission.
Room & Board: This is the most expensive fee after tuition. It includes not just the dorm room fee, but also a basic meal plan. If you’re not living on campus, but you’re being charged with room & board, definitely talk to your school’s finance office to get out of housing. If you’re commuting to school, be careful, because sometimes schools will still charge you for a meal plan. If you don’t want to pay for a meal plan, make sure you opt out of it to say a couple hundred dollars.
Financial aid is the best part of the tuition statement. It’s all the money you were able to save from doing well in school! Financial aid is typically broken down into two types: merit-based and need-based. Merit-based aid is given to you based on your achievements during school, such as a high GPA or high SAT/ACT scores. Need-based aid is given to you based on the information you filled in on the FAFSA; it looks at the financial situation of your household and federal aid is given to you based on that information. Typically, merit-based aid comes in the form of scholarships or grants, and will not be need to be paid back. Need-based aid, however, can come in the form of either grants or loans, so be careful of which you accept because you will have to pay back one but not the other. I will be going more in-depth with the federal aid.
Federal Grants: One of the most common federal grants is the Federal Pell Grant. How much you receive will largely depend on how much you are able to contribute towards your college expenses, hence it being something that relies greatly on the FAFSA. If FAFSA deems that you can be expected to contribute a lot more money towards your college education than another student, you will receive less money than that other student simply because they need that financial assistance more. The amount awarded every year changes, but note that Federal Pell Grants do not decrease unless your household has had a sudden gain in income and will not need that much money. Generally, there’s no reason to not accept a grant, so if you do receive this, definitely accept! There’s no penalty, no fees to repay, etc., so this is a good thing.
Federal Student Loans: Like any other loan, you will have to pay this back. The difference is that these loans usually have lower interest rates and you do not need to pay them back right away. Instead, you can choose to start paying back your loans after you graduate. Be very careful with loans, however, because as a new adult with 0 credit history, if you do not understand the conditions of your loan and you mess up, this can damage your credit history for many years to come, which will affect your ability to make big purchases (such as a car or a house) and make you a risky borrower in the eyes of potential lenders. ALWAYS and I mean ALWAYS make sure you understnd the terms and conditions of your loan. Even if you are eligible to borrow the maximum amount of money possible, that is not always a good thing. Remember that part of being a responsible borrower is also being a reponsibler payer. If you cannot keep up with the monthly payments, you should not be borrowing that much money; instead, decrease it to an amount where you are able to pay.
There are several types of student loans: Unsubsidized, Subsidized, PLUS, and Perkins.
Unsubsidized: You do not have to need the money to be able to be eligible for this. By that I mean that even if your family has a high income, you are still eligible for this loan. You are not required to repay this loan while you are in school. Instead, you have a 6 month grace period before you are required to start paying back your loan. You are responsible, however, of paying back the interest while you are in school and during the 6 month grace period after you graduate. If you don’t, the interest will add up on top of the original ammount borrowed.
Subsidized: For this loan, you must demonstrate that you financially need the money (again, FAFSA). Unlike the unsubsidized loan, you are not responsible for the interest accumulated on the loan while you’re in school. The government will pay the interest on the loan while you’re in school and during the grace period after you graduate, hence “subsidized.” The cons to this, however, is that if you break any of the conditions (such as no longer being a full-time student), you are responsible for the interest on the loan that the government would have originally paid. Again, remember to read the terms of your loan carefully before you proceed.
PLUS: This loan is mainly aimed towards graduate students, but for you undergraduates out there who could still use a little more money, this loan is different from the two above in that you are not the one reponsible for paying the loan back. Rather, your parents are the ones responsible for the payments. Like the unsubsidized, this loan is not reliant on your financial need but instead on credit history, hence why it’s Mom or Dad paying, and not you.
Perkins: Unlike the rest of the loans, the Perkins loan is not available at every school. In addition, if you choose to accept this loan, you will be borrowing from the college rather than the government, so you will be paying your loans back to the college as well. This loan is also dependent on the FAFSA in that you must show that you have financial need to be considered for it.
Work Study: Personally, this is my favorite federal aid after the grants (because who actually likes loans? No one.) because you get to earn money. Federal Work-Study is awarded on a financial need basis as well, and you are awarded a certain amount of money with the only condition being that you get a job on campus (or is part of the FWS program). The great thing about this is that you are earning money in addition to receiving the money, so if you want to spend a little extra on expenses elsewhere, you have a little wiggle room to do so.
Remember to always look over your tuition statement carefully and ask your school’s financial aid office on what you can opt out of and what’s necessary. Of course, the best thing you can do is set up an appointment with them to go over your statement in order to understand what the expenses are and why you’re paying for them. I hope this was informative, and please feel free to add on your own experiences!
