College Funding: A Step-by-Step Guide: How much does College cost?

Navigating the College Price Tag: A Step-by-Step Guide: How much does college cost?

I help families gain financial confidence to take control of their lives, and let’s be honest—nothing tests that confidence quite like looking at college tuition and cost numbers!

How much does college cost? It can feel completely overwhelming. I admit I am overwhelmed by it too. But just like any other big financial goal, you just need a plan and the right tools.

Here are the steps we found most helpful during our own recent college search.

1. Look Broadly: Public, Private, In-State, and Out

When you start your search, don’t let the initial “sticker price” scare you off. You should look at a mix of everything: in-state public universities, out-of-state options, and even small private colleges.

You know what we found? In our recent search in Virginia, we discovered that some small private colleges were actually comparable in price to our big state schools. Once you factor in merit scholarships and the Virginia Tuition Assistance Grant (VTAG)—which is a great benefit for VA residents attending private schools in the state—the final cost was much lower than we expected.

Always run the numbers before you cross a school off your list—but just as importantly, run them before you fall in love with a school, too! It’s so easy to get swept up in the ‘dream school’ excitement, but the last thing you want is to pick a college that your family simply can’t afford. Do the math early so your heart doesn’t outpace your wallet!”

2. Find the “True” Cost (COA)

Don’t just look at tuition. You need to search for the Cost of Attendance (COA). This is the “all-in” number that includes:

• Tuition
• Fees
• Housing and Food (Room and Board)
• Books, Supplies, and even Transportation

To do this do a website search for the school and Cost of Attandance or COA.

3. Use the Net Price Calculator (NPC)

Every college has a Net Price Calculator on their website. Go find it! By plugging in your info, you’ll get an estimate of what your family might actually pay after merit and financial aid. This gives you a much better “reality check” than the sticker price.

To do this do a website search for the school and Net Price Calculator.

4. Crunch the Yearly Numbers

Once you have those NPC results, look at the yearly costs. It’s easier to plan when you’re looking at one year at a time rather than a giant four-year total. Focus on the “Direct Costs” (what the school bills you) vs. the “Indirect Costs” (like travel or extra supplies).

One thing to keep in mind: that ‘sticker price’ isn’t static. In the real world, costs go up almost every year! As you’re crunching the numbers for freshman year, do a little digging to see what that specific school’s history of increases looks like. You might see a 3% to 5% jump—or even more—each year. It’s much better to plan for that ‘inflation’ now than to be surprised when the bill arrives for sophomore year!

5. What Do You Have Saved?

Inventory your resources! Look at your 529 plans, savings, and investments.

A quick tip: Leave your retirement accounts alone. You can borrow for college, but you can’t borrow for retirement! Be realistic about what you can actually contribute from your savings without hurting your future self.

6. Create Your Plan: Federal Loans

After you see what you can contribute, look at federal student loans.

For the 2025-2026 school year, the interest rate is 6.39% with a 1.057% fee taken out upfront. (This can change.)

What’s the difference between Subsidized and Unsubsidized?

• Subsidized: The government pays the interest while the student is in school. (Based on need).
• Unsubsidized: Interest starts growing right away. (Available to everyone).

2025-2026 Federal Loan Limits

Year	Max Subsidized	Total Borrowing Limit
Freshman	$3,500	$5,500
Sophomore	$4,500	$6,500
Junior/Senior	$5,500	$7,500

Source: Studentaid.gov

7. Parent PLUS Loans

If there is still a gap, you might look at Parent PLUS Loans.

For 2025-2026, the rate is 8.94% with a much higher fee of 4.228%.

Note: There were some big changes in 2025! For many new borrowers, there is now a cap of $20,000 per year (or $65,000 lifetime), so you can’t necessarily borrow the full “gap” anymore.

Source: Bankrate.com and Studentaid.gov

8. Private Loans: The Last Resort

We generally view private loans as the last option. They can help cover the final remaining costs, but they come with trade-offs.

• Advantages: Can cover costs beyond federal limits; potentially lower rates if you have perfect credit.
• Disadvantages: Rates are often variable (they can go up!); no federal protections like loan forgiveness or income-based repayment. The loan has to be co-signed by a parent so if the child doesn’t pay it off the parent has to repay it. 
• Source and resource: thecollegeinvestor.com

9. The FAFSA: A 2-Year Look Back

When your child is applying, you’ll fill out the FAFSA (Free Application for Federal Student Aid). This is how the government determines if they think you have enough assets to help pay for college.

How does it work?

• The 2-Year Look Back: The FAFSA uses your tax information from two years ago. For the 2026-2027 school year, they’ll be looking at your 2024 income.

• The “Assets” Catch: It looks at your income and non-retirement assets.

• The “Blind Spots”: It doesn’t account for your monthly or yearly expenses or your debt (like credit cards or car payments).

• The Good News: It specifically subtracts your retirement accounts from the calculation. Your 401k and IRA are protected in the government’s eyes!

• Source: FASFA Studentaid.com

10. Stay Educated: Resources for the Road

This is a long process, but you don’t have to go through it alone. Here are the resources I highly recommend to help you navigate the noise:

• Virginia 529 Plans: Look up the Virginia 529 plan (or the plan in your own state). Save early and often! Even while your child is in school, it’s not too late to contribute and get those tax benefits.

  • Just a heads up: Be careful not to be too aggressive with the investments when you are close to needing that money!

• Community Support: Join the Paying for College 101 Facebook Group. It is full of parents going through the exact same thing.

• Expert Insights: Check out the Road 2 College blog. They have amazing tools like “R2C Insights” to help you find schools that actually offer merit aid.

• Deep Debt Strategy: If you already have high student loans or are looking at borrowing a significant amount, I highly suggest Student Loan Planner. Their team has a mountain of information on both federal and private loans and can give you real insight into what you’re signing up for. In additional The College Investor.com has a wealth of information and calculators too.

What is your next step? Whether it’s opening a 529 or running a Net Price Calculator, just start with one thing today!