Paying for college

Sticker price and net price

A college charging $60,000 that awards you $40,000 in grants costs you less than one charging $30,000 that awards you nothing. Comparing sticker prices tells you almost nothing about which you can afford.

Aid is not all the same thing

Grants

Money you do not repay, usually awarded on financial need. The federal Pell Grant is the largest source for most students.

Scholarships

Also not repaid, usually awarded on merit or on something specific about you. Can come from the college itself or from outside.

Work-study

A part-time job, subsidised by the federal government. Earned rather than granted, and limited by the hours you actually work.

Loans

Not aid. A loan does not reduce what college costs; it moves the cost later and adds interest. Aid letters often list loans alongside grants under a single “total aid” figure, which makes an offer look better than it is. Read which lines are repaid.

How much is too much to borrow

Two rules of thumb are widely repeated, and both are rules of thumb rather than regulations: keep total borrowing under what you expect to earn in your first year of work, and keep monthly payments under about 10% of gross income.

Federal undergraduate borrowing is capped at $31,000 in total for most dependent students, and $5,500 in the first year. Borrowing beyond those limits means private loans, which generally carry higher rates and fewer protections.

The cost calculator shows what a given gap costs per month and in total interest, which is usually more persuasive than the headline figure.