Guess-timating how much financial aid you'll get for college is super hard. In fact, most people are way off in their guesses, as we'll explain in a minute. But when your financial future is on the line, it's important to be as accurate as possible.
So if you're looking for some hard numbers to work with, here's your cheat sheet: The average financial aid amount was about $8,500 for students who filed the FAFSA in the 2015-16 academic year. Let's take a closer at how financial aid shakes out for most people.
Financial aid amounts from different sources
As CNBC reports, in 2016-17, the average undergraduate received $8,440 in grants. That includes grants from sources including the federal and state government, the institution itself, and private sources.
Most undergrads also received $4,620 in federal loans and $1,340 in other aid, such as tax credits and deductions, and work study.
As CNBC reports, access to much of that aid is triggered by filling out the FAFSA. That means you should fill out the FAFSA no matter how much your family makes.
By completing the FAFSA, you enable colleges to use your family's financial information to determine how much federal and non-federal aid you're eligible to receive. This means the amount of financial aid you've given also depends on the institution.
Calculating the real cost of college
As we stated above, most people aren't correct in their assumptions about college costs. New data in a study by the National Center for Education Statistics suggests that only around 10% of high school freshmen were correct in their estimations of college fees and tuition.
One reason for the over- and under-estimations is that parents and students are likely to forget to take financial aid, such as scholarships and grants, into account when working out the costs. This matters, ultimately, because you need to understand how much you're eligible to receive in order to budget for out-of-pocket costs.
Look at the net price, not the sticker price
One big mistake many parents and students make? Only looking at a school's sticker price—or the total price per year, not including financial aid. This is a mistake because it's not the amount you'll actually pay to attend.
Rather, take need-based aid, as well as grants and scholarships into account. This is called the net price, and it will give you a more accurate estimate when looking at schools.
CNBC suggests the following tip, once you know the net price of a potential school, to determine affordability:
- Divide the net price for one year at the college by your family's total income (the sum of your adjusted gross income and untaxed income).
- If the ratio is less than 25%, the school is affordable.
Or, an easier option is to use our NitroScore calculator, which will give you an easy visual breakdown of college costs for schools across the country.
Review each college's financial aid package
Of course, as we noted above, your financial aid amount—and thus, the expected out-of-pocket cost—will depend on the school. That's because while some federal aid (like Pell Grants) remains constant no matter where you go to school, each institution also offers its own aid, some of which is need-based and some based on achievement.
Each school that you're accepted to will send you a financial aid award letter. These letters detail the cost of attendance, your expected family contribution, and the aid available to you.
Take a look at our blog post, How to Read Your Financial Aid Award Letter: 5 Examples, in which we explain how to read a financial aid award letter. The most important figures are:
- Yearly cost of attending the university
- Free money, such as grants and work-study
- Financial aid that you'll need to pay back, like federal loans
- Remaining amount that you'll need to pay out-of-pocket or with private student loans