Students and parents who make a plan to pay for college have more success making college affordable. It begins with a conversation during the junior year of high school, or early on in the senior year, to determine who is going to pay for college and which components. Through this discussion, parents can set the ground rules and give students realistic expectations.
That’s why college planning calculators are vital to the college planning process. These tools provide a pretty accurate estimate on college costs, potential financial aid packages, and your Student Aid Index (SAI) , which is ultimately determined on the FAFSA. Understanding your SAI is a key to understanding your eligibility for federal student aid.
The best way to determine your estimated financial aid package is:
COA – SAI = Financial Need
COA stands for Cost of Attendance, and SAI stands for Student Aid Index. The cost of attendance can be found on any college website under the Financial Aid section. Filing the Free Application for Federal Student Aid, or FAFSA, determines the SAI. The above equation informs you of your Financial Need for college.
Once the FAFSA is processed, colleges and universities use the financial need figure to try and bridge the gap between what your family can contribute and the total cost of college. They may offer grants (which do not need to be repaid) and/or work-study programs. However, their financial aid package may also include student loans. Understanding the different types of financial aid is crucial. An SAI calculator can help you estimate your expected family contribution (EFC), now known as the SAI, towards college tuition and other costs. This is a valuable tool to use during your junior or even sophomore year of high school for early college planning.
As you confront the realities of paying for higher education, you might discover that the combination of your family’s contribution and your financial aid awards still falls short of covering the full cost of attendance.
Your remaining option might be to consider student loans to bridge the college funding gap. While the prospect of student debt can be daunting for many students and parents, it doesn’t have to be. By adhering to a few fundamental borrowing principles, you can manage student loan debt effectively:
Finally, you may find that there are a plethora of student loan options out there – so how do you decide which is right for you? Before you decide, compare student loans through a Loan Comparison Calculator.
Best Financial Aid and Loan Calculators
To help you start the conversation – and to assist you in your college funding plan – we’re highlighting our favorite student calculators from our sister site, FinAid. These calculators are tried and true and should be utilized by students and their parents or guardians to make the most informed higher education finance decisions.Student Aid Index (SAI) Calculator
Loan Payment Calculator
- Never borrow more than your annual salary after graduation. Research annual salaries of jobs that interest you – or find the average starting salary for all college graduates. That will give you a limit on how much to borrow.
- Borrow federal first, then seek out private loans. Federal student loans have the lowest interest rates. By borrowing federal first, you save more money over time on your student loan payments.
- Estimate loan payments before borrowing. To help you make the wisest student loan decisions, it’s vital to estimate your monthly payments after graduation. Before you even borrow, you’ll have a big picture view of how student loans will impact your life after graduation.
Loan Comparison Calculator
