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, and 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

If a loan is part of your college financing strategy, review the differences to determine which option best suits your financial situation.²

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.
• Study abroad programs: Studying abroad is a popular option for many students today. It can expand your child’s worldview by gaining international experience. Costs vary, and some may be less expensive than a semester in a U.S. school. However, there are additional costs that need to be accounted for. These programs usually include housing and sometimes meals. Aside from tuition, you will need to budget for other expenses like housing (if it’s not included), meals, airfare, transportation, entertainment, books, and supplies–all of which can add up.

Preparations for the Fall

As you prepare for the start of the fall semester, there are several steps you may want to take and financial tools you may want to consider.

• Student bank account 

  Setting up a student bank account is a big step toward financial independence (even if you seed the account and add to it periodically). A bank account can help college students manage money, monitor their cash flow, and build good financial habits.

  Some bank accounts for college students don’t charge monthly fees or require direct deposit. They also have forgiving overdraft policies and good mobile banking apps. You may also want to talk with your child about sticking to a realistic budget.

• Student credit card 

  It may be a good idea for a college student to have a credit card, even if it is just for emergencies. Your child can either be an authorized user on your card or get a student credit card. If you’re not sure if your child is ready to handle the responsibilities of a credit card, a good starting point is to allow them to use a debit card as a primary payment method. According to a survey by Sallie Mae, 85% of college students had debit cards.⁶ Debit or credit cards are needed for everything from ride-share apps to food delivery to splitting the bill at a restaurant.

  Student credit cards often accept students with limited or no credit history. Student credit cards may have lower credit and are designed to help manage spending. And some don’t have annual fees.⁶

  Many financial institutions issue student credit cards designed to help students get started with credit. They may have credit-building tools like free credit scores and credit report access. Some offer cash back and travel rewards.⁶

  You should consider having an ongoing conversation with your child about responsible credit card use before they get it and even after they start using it.

• Insurance 

  Before moving your child into the dorm, check if they need renters insurance. The school may require supplemental insurance if your homeowners policy does not cover them. Some schools offer renters insurance for an extra fee.

  Many colleges require that your student have health insurance coverage. If your child is on your health policy, you will have to submit a waiver so your student is not automatically enrolled in the school plan, and you will incur an additional charge.

• Power of Attorney 

  A Power of attorney (POA) can be a crucial backstop for college students navigating their newfound independence. Since 18 is considered the age of majority in most states, a POA can provide a legal mechanism for you to step in to manage essential matters if needed. This arrangement is especially beneficial if your child is studying far from home, where immediate action might be necessary in an emergency. Consult your attorney for more details, but POAs can help with:⁷

  • Financial Protection: College students often have bank accounts, credit cards, and loans. A POA allows another person, such as a parent, to manage these financial affairs.
  • Medical Decisions: In critical health scenarios where students can’t make their own medical decisions, a POA grants authority to a designated person to promptly address their healthcare needs.
  • Academic Records Access: It may be hard to believe, but even if you are paying for college, you may not be allowed to see how your child is doing in school. A POA may allow parents or guardians to access academic records, facilitating open communication and support from parents when needed.

Having the correct type of POA in place may ease anxiety for both you and your child. Knowing you have the required documentation to help address unexpected circumstances is a step toward independence without immediately jumping into the deep end.

Setting up 529 Withdrawals to Pay Expenses

Suppose you have invested in a 529 plan to pay for your child’s education. In that case, it’s time to consider using those assets to pay for qualified expenses, including tuition, fees, books, supplies and equipment, computers, and room and board. In some instances, parents can make 529 withdrawals by completing a withdrawal request form online. Some plans also allow 529 plan account owners to download a withdrawal request form to be mailed in or make a withdrawal request by telephone. The withdrawal request form will typically ask for information such as:

• 529 plan account number
• Your name and Social Security number or Taxpayer Identification Number
• The beneficiary’s name and Social Security number or Taxpayer Identification Number
• Phone number

A college saving plan allows individuals to save for college on a tax-advantaged basis. The state tax treatment of 529 accounts is only one factor to consider before committing to this savings plan. You should also consider any fees and expenses associated with a particular plan. Whether or not a state tax deduction is available depends on your state of residence. State tax laws and treatment may vary, and state tax laws may differ from federal ones. Earnings on nonqualified distributions will be subject to income tax and a 10 percent federal penalty tax.

Requesting payment directly to your college is also an option to consider, but always check the school’s policy regarding funds received directly from a 529 plan first.⁸

Understanding Deposit Deadlines

Once you and your child decide on the school they plan to attend, you might be required to pay a deposit to confirm acceptance and reserve a place in the incoming freshman class. This deposit is typically nonrefundable and is applied to tuition for the first year. The deposit is usually due by National College Decision Day, May 1. Still, it could vary if your child was admitted under an early decision plan, rolling admissions, or received an extension from the college for financial aid reasons. Deposits are typically between $100 and $400 but can be higher based on the institution.¹¹

Making the Final College Decision

Even if you are in a position to write the college check regardless of the price, you might want to have a talk with your child about the value of a school versus its cost.

The average tuition costs at 4-year public in-state and private non-profit schools are $9,377 and $37,641, respectively. On the other hand, the amount can climb to $59,985 at Ivy League institutions. Including room and board and other college-related expenses, the cost of attendance at an Ivy League school can be as high as $83,000. As a general rule of thumb, the more prestigious the college, the more expensive the tuition.⁹

The payoff to attending any college is how it impacts your prospects going forward. While a prestigious university can make a resume stand out, what your child did in school may be more important than where they graduated.

Research on the relationship between college rankings and career success is mixed. Some studies suggest a strong link, while others find that the effect of college prestige diminishes over time.¹⁰

A well-known study by economists Alan Krueger and Stacy Dale found that students accepted to highly selective colleges but chose to attend less selective schools had similar earnings to those who attended the more selective institutions. This suggests that student characteristics may be more important than college selectivity in determining career success.¹⁰

However, other research has found advantages for graduates of highly ranked schools. A 2024 study published in Contemporary Economic Policy found that attending a top-ranked liberal arts college was associated with higher earnings, even after controlling for student characteristics.¹⁰

Employers and hiring managers often reveal a nuanced view of college rankings. While some admit to being influenced by school prestige, many emphasize other factors as more important, including internships, employment during college, college major, volunteer experience, and extracurricular activities.¹⁰

Many employers also stress the importance of “soft skills” like communication, teamwork, and problem-solving skills that can be developed at any college, regardless of their ranking.¹⁰

So, keep that all in mind while making the final college decision.

Congratulations!

For those going through this now, it’s an exciting time for you and the soon-to-be college student, and we congratulate you all on reaching this life milestone. As you make final preparations, please contact us if we can help in any way.

1. U.S. Department of Education, January 20, 2025   https://www.ed.gov/media/document/fy-2025-26-annotated-college-financing-plan-undergraduate

2. Bankrate, December 7, 2024  https://www.bankrate.com/loans/student-loans/types-of-student-loans/#private

3. Finmasters, December 5, 2023  https://finmasters.com/hidden-costs-of-college/

4. Edvisors, May 24, 2024 https://www.edvisors.com/blog/uncovering-hidden-costs-beyond-tuition/

5. Go Overseas, November 3, 2024 https://www.gooverseas.com/blog/cost-to-study-abroad

6. U.S. News & World Report, August 6, 2024  https://money.usnews.com/credit-cards/articles/should-college-students-have-credit-cards

7. BlueNotary, November 22, 2024 https://bluenotary.us/power-of-attorney-college-student/

8. Saving For College, February 22, 2024   https://www.savingforcollege.com/article/how-to-withdraw-money-from-your-529-plan

9. College Reality Check, December 10, 2023  https://collegerealitycheck.com/is-going-to-a-prestigious-college-ivy-league-worth-it/

10. College Rank, January 2025  https://www.collegerank.net/college-rankings/job-prospects-after-graduation/

Disclosure

Legacy Capital Wealth Partners, LLC (“Legacy Capital”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Legacy Capital and its representatives are properly licensed or exempt from licensure.

The information provided is for educational and informational purposes only and does not constitute investment advice, nor should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult with your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

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