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The tuition and fees you see listed on a school’s website may seem steep, but that cost of attendance is an estimate of the most you can expect to pay to attend that school in any given year, and the good news is that there are ways to shave down those costs. Merit and athletic scholarships are out there for high-achieving students, but any student with financial need can qualify for federal financial aid. In fact, your application for financial aid, which considers your family’s financial situation, will indicate what the government thinks you could afford to pay upfront for one year of education. You’ll see this “estimated family contribution” expressed as a dollar figure, and if it’s lower than a school’s cost of attendance (e.g., $10,000 but next year’s cost of attendance at your dream school is $45,000), the school may choose to meet some or all of your financial need by awarding need-based scholarships. It may sound confusing, but calculating your potential out-of-pocket costs at any one school will be easy once you know how to estimate your family contribution and learn where to locate information about a school’s cost of attendance and the percentage of financial need it promises to meet.

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What are out-of-pocket costs?

First things first. In the world of higher education, out-of-pocket costs are what you have to pay upfront for your education each year. They are what you still owe (or what’s left to pay) toward tuition, fees, and other living/educational expenses after you subtract all of the scholarships you’ve earned and the federal grants and loans for which you qualify. Here’s the general idea:

Total cost of attendance at a specific school
(tuition, fees, living expenses, etc.)

minus (-)

All sources of financial aid available to you at that school
(scholarships, grants, loans, etc.)

equals (=)

Your out-of-pocket costs for one year

Let’s look at an example. A specific school has a total cost of attendance (tuition, fees, other expenses) of $40,000 a year. A student with a $30,000 financial aid package at that school will still need to pay $10,000 upfront this year. Those $10,000 are out-of-pocket costs. Similarly, another student at the same school who doesn’t qualify for any need-based financial aid will need to pay the full $40,000 upfront, unless she can win any merit or athletic scholarships to put toward her education.

Because the cost of tuition, fees, and other expenses depends on the school you choose—and since your financial aid package does too—your out-of-pocket costs will differ from school to school. If you are hoping to make a wise financial choice when it comes to your education, it is crucial to estimate what your out-of-pocket costs would be at any school you’re considering ahead of time. Not only will this will give you an idea of your most affordable college options, but it will also give you time to prepare for the costs of your education, wherever you decide to go.

This article will teach you how to estimate what your out-of-pocket costs would look like at any school and provide examples to help you see how these calculations work. If you have a few schools in mind, or if you have the list of schools to which you’ve applied handy, you may decide to calculate your out-of-pocket cost estimates as we go. If you do want to follow along, you will be prompted to seek specific information from a school’s website or admissions counselor and do some simple calculations. Don’t worry. It’s easy and worth it.

1. Identify a school’s total cost of attendance.

A school’s total cost of attendance is the sticker price of one year of education at a particular school. It is the price of tuition and fees for that year plus the costs of room and board and a year’s worth of health insurance premiums. It may include an estimate for personal expenses (books, supplies, entertainment, and transportation) as well. In other words, cost of attendance is what your education and associated expenses will total in any given year if you don’t secure any funding via federal financial aid, outside scholarships, or state/regional sources.

Costs of attendance tend to rise each year (in fact, once you decide on a school, its cost of attendance may increase dramatically between your freshman and senior years), but remember that cost of attendance and out-of-pocket costs are not one and the same. You will only have to pay a school’s cost of attendance in its entirety if you don’t receive any federal financial aid or win other scholarships.

A school’s total cost of attendance is usually available on its website, but do recognize that some figures, like the cost of books and transportation, are estimates. Room and board is usually calculated using the price of the standard meal plan and on-campus housing, which means that your housing and meal plan choices could affect the estimated cost of attendance you see on a website (e.g., choosing an enhanced meal plan or electing to live off campus). Tuition and fees are usually fixed, however, at public universities, in-state students may receive a tuition break which makes their total cost of attendance significantly cheaper than an out-of-state student’s. Because of these variables, your total cost of attendance at a specific school may not be the same as another student’s at the same school.

If you’re following along, go ahead and look up the total cost of attendance at the school(s) of your choice. To keep your information together and to prepare for calculations later on, you may decide to include the information you find in a spreadsheet or table like the one below.

If you are concerned by the numbers you see, remember that because there is so much funding out there available to students, there are ways to pay less than a school’s total cost of attendance. Remember, it all comes down to out-of-pocket costs. In fact, the school on your list with the lowest cost of attendance is not necessarily your cheapest option. Similarly, the school with the highest cost of attendance is not necessarily your most expensive option. Don’t write off any “expensive” schools just yet.

2. Look up which forms you must complete to apply for federal and institutional financial aid at each school on your list.

Generally speaking, financial aid is any economic help from an outside source that can be put toward the costs of your higher education. And for most students, applying for it is a no-brainer: The more financial aid you receive, the lower your out-of-pocket costs.

While there are many sources of financial aid out there, the largest provider in the country is the federal government. Each year it administers billions of dollars in financial aid to students who are U.S. citizens, residents, or eligible noncitizens. (Please note that students without authorized immigration documents are ineligible for federal financial but can find more information about affording college here.)

Federal financial aid is need-based, which means that it intends to help students who demonstrate financial need by awarding them grants (free money) and low-interest loans (money you’ll need to pay back) and recommending them for work-study positions (money you earn by working). Everything you’ve ever wanted to know about financial aid is in our Afford section, but as you begin calculating your anticipated out-of-pocket costs, the most important thing you need to know is that your financial aid application helps the government and your college determine how much you could reasonably afford to pay for one year of school. That’s why it’s so important to apply for federal financial aid. (Students who do not have authorized immigration documents and students whose families have not filed federal and/or state taxes may want to talk to a lawyer first.)

To apply for federal financial aid, you must fill out the Free Application for Federal Student Aid (FAFSA) and you may also need to fill out the CSS Profile, which is an additional requirement to receive financial aid at some schools. Both forms require you to input information about your family and its financial situation. Based on the values you enter, these forms will calculate how much your family could afford to put toward your education for one year. This information is called your Estimated Family Contribution (EFC), which is expressed as a dollar figure. You will automatically receive your EFC upon submission of your FAFSA or CSS Profile.

The FAFSA and the CSS Profile each use their own formulas which consider different aspects of your family’s financial situation, so you may see a little variation between your FAFSA and CSS Profile results. Both consider your family’s income, assets, and benefits, but the CSS Profile considers much more; it asks more invasive questions about your family’s financial situation, including your family’s medical expenses and debts. When you submit the FAFSA and/or CSS Profile forms, you can send your EFC results to every college to which you will apply. These colleges will use your EFC as calculated by the form they prefer to determine how much need-based financial aid to award you.

As an example, let’s say that the FAFSA tells a student that her EFC is $21,000, while the CSS Profile tells her that her EFC is $18,000. So, which does she use in her calculations? Both! Schools that rely solely on the FAFSA will only receive the EFC that was calculated by the FAFSA, and they will disregard the EFC that was calculated by the CSS Profile. On the other hand, schools that require the CSS Profile will often view that student’s EFC as $18,000, though some schools may calculate her EFC as somewhere between those two figures. It should also be noted that some schools create their own formulas to exclude certain information from the FAFSA if they don’t think it’s relevant (e.g., one school might exclude the home equity of a primary residence while another may include it).

Because we are estimating, however, let’s not get caught up in the details at this time, so let’s instead look at the general ways a school determines financial aid. If you’re following along, take a moment to search the school website(s) for information on financial aid application requirements. Schools will specify if you need to send them the CSS Profile or not (you will always need to send the FAFSA if you hope to apply for financial aid). If you do not want to search school websites, you can find a complete list of schools that use the CSS Profile to administer financial aid to some or all applicants here.

3. Use online resources to estimate your family contribution (EFC) for college.

If you will be applying for college and financial aid for the coming school year, you can find out your EFC automatically upon submitting your FAFSA and/or CSS Profile. If you are not ready to apply for college or financial aid this year or right at this second, however, and just want to plan ahead, you can still estimate your future EFC with a few helpful tools. For the most accurate results, you will need information from your family’s tax return (and your tax return too, if you filed). Use 2017 returns for the 2019–2020 school year; 2018 returns for the 2020–2021 school year; and so on.

• Do note that an EFC will change year to year to mimic changes to your and your family’s financial situation. Inheriting money, losing a source of income, getting a raise, having another immediate family member enroll in college, and obtaining a new property are some of the many factors that can cause your EFC to change dramatically between one year and the next.
• Unless you are an independent student (over 24, married, in graduate school, and/or someone who meets another very specific requirement), the FAFSA and/or CSS Profile will always consider your family’s financial situation when calculating your EFC. This means that your family’s financial information will help determine your EFC, even if your family refuses to give you any money for college. That’s because the government believes that you and your family should take primary financial responsibility when it comes to your higher education. In the unfortunate event in which your family is unwilling to help you pay for college at all despite being able, encourage them to fill out the FAFSA and possibly the CSS Profile anyway. It in no way obligates them to pay for any part of your education, but it is the only way you can apply for need-based grants and loans, which could decrease your out-of-pocket costs (if a parent is undocumented or has not filed taxes, they may want to talk to a lawyer first).

When you have talked to your family and gathered relevant financial documents, you can use the FAFSA4Caster, an online resource, to estimate your EFC as determined by the FAFSA. You may find the College Board calculator to be more helpful, however, because you can use it to calculate your EFC based on both federal (FAFSA) and institutional (CSS Profile) methodologies.

Once you have your EFC(s) calculated, take pause to make sure you understand what it really means. The EFC you see is a dollar figure, and it won’t change college to college. It is the government’s (FAFSA) or College Board’s (CSS Profile) way to express what you could afford to pay to attend any institution for one year. In other words, your EFC serves to tell each school to which you will send your results what you could realistically afford to pay for one year of higher education. In theory, the higher your EFC, the more you should be able to pay out of pocket for one year of college.

• An EFC of 0 indicates that a family could not afford to put any money toward a student’s education.
• An EFC of $60,000+ indicates that a family could afford to pay the total cost of attendance at almost any college. These students are unlikely to qualify for any need-based financial aid, and unless they receive merit or athletic scholarships, their cheapest college options are the colleges with the lowest sticker prices: community colleges and public universities in their states of residency.

EFC results are rarely as generous as students and their families want them to be (and there are very few chances to make a special circumstance EFC appeal). That’s because the government feels that your choice to continue your education, like your choice to buy a car, house, or anything else, requires some sacrifice on your part. The truth is, college is expensive, even with financial aid, and so the earlier you can plan for your potential EFC, the better. Knowing your EFC, or an estimate of your future EFC, is important because you’ll have an idea of the minimum amount of money you’d be expected to come up with for school per year. Plus, for our purposes, once you have an idea of what your EFC will look like, you can start calculating your financial need.

In the meantime, however, if you are following along, go ahead and add your EFC to your table. Remember to use your EFC from the CSS Profile if a college on your list requires the CSS Profile. If a college does not require the CSS Profile, use your EFC as determined by the FAFSA.

4. Subtract your EFC from the cost of attendance to find your financial need.

You might notice a gap between your EFC and a school’s total cost of attendance. In the example that we’ve been using, for instance, the College Board believes the student could afford to pay $12,000 for the given year, but School A costs $40,000. The difference between those figures is the student’s financial need. This is an easy calculation to do.

Total cost of attendance at a specific school

minus (-)

Your EFC

(as determined by the financial aid form the school prefers)

equals (=)

Your financial need

Financial need is an official calculation that indicates how much financial help you would need to afford one year of costs at a specific school.

If your financial need is 0 at any one school, like at School E in the example we’re using above:

• You will not qualify for any need-based financial aid (like federal or institutional grants, federal loans, or work-study) at that school. This means that your out-of-pocket costs will equal the school’s total cost of attendance unless you win merit or athletic scholarships. So, in the example above, the student would need to pay $9,000 to attend School E for the year, but if she won an institutional merit scholarship (usually awarded to incoming students with high GPAs and test scores) of $5,000, for example, she’d only need to pay $4,000 to attend. She could further whittle down her out-of-pocket costs by continuing to apply for private scholarships.
• There is a chance that you could apply for a campus work-study position after students on financial aid receive priority, and you can use that income however you like (putting it toward out-of-pocket costs, saving it, etc.). If you’d like to work but all on-campus positions are filled, consider finding a part-time job off campus.

5. Inquire about the percentage of financial need that each school is committed to meeting.

When you fill out the FAFSA and/or CSS Profile, you have the opportunity to list the schools to which you’d like to send your EFC results. (You should always send your results to the schools to which you are applying as it is the only way to apply for financial aid.) Once these schools receive your results, they will be able to calculate your financial need.

• Some schools, often called need-aware schools, will look at your financial need along with the components of your application for admission. That means that your ability to pay for college might factor into your acceptance or rejection. On the other hand, need-blind schools accept students regardless of their financial need, and they will only use this information to determine a student’s financial aid package once he or she has been offered admission. You may want to keep a school’s status as need-blind or need-aware in mind as you apply, especially if you have high financial need.

Regardless of whether a school looks at your EFC when it’s reviewing your application for admission or after you receive an acceptance, it will eventually calculate your financial need. But, for the most part, every school can use its discretion when it comes to meeting your need.

Schools administer federal financial aid for the federal government, and they have to follow the law when doing so. There are rules about federal grants (like the maximum amount a student can receive per year), federal loans (like the maximum amount a student can take out per year), and federal work-study (like the maximum number of hours a student can work per week). Because of these restrictions, a school can’t just send the government a bill for all of a student’s financial need; usually a school will need to offer the student need-based institutional scholarships to meet (or get closer to meeting) all of their financial need.

Some schools will offer generous need-based scholarships that combine with federal financial aid to meet every student’s full financial need. In other words, some schools are committed to meeting 100% of every student’s financial need by offering a combination of federal grants, federal loans, federal work-study positions, and need-based institutional scholarships (sometimes schools will include need-based institutional loans as well). These schools will likely advertise this commitment proudly on their websites. Other schools commit to a lesser percentage, like 60% or 93%.

If you cannot find the percentage of financial need on a school’s website, call its financial aid office or an admissions counselor and ask, “Are you committed to meeting a certain percentage of every student’s financial need? If so, what is that percentage?” Ideally they will give you the exact percentage, or at least a range (e.g., “70–80%, but it fluctuates each year”). Be wary of departments that are not transparent (“we try to help every student who demonstrates financial need” or “in the past, students have received excellent financial aid packages”). How do they help students who demonstrate financial need? What do they consider an excellent financial aid package (and are they referring to need-based financial aid)? Look for concrete answers.

6. Use all of your findings thus far to calculate your out-of-pocket costs.

The good news is that you now have everything you need to calculate your out-of-pocket costs—or at least realistically estimate what they would be—at every school on your list. Here’s the formula we’ll use:

TCOA - (NM x FN) = Out-of-Pocket Costs

In this equation:

• TCOA is total cost of attendance.
• NM is “need met,” or the percentage of financial need that a school agrees to meet for every student. If a school meets 100% of a student’s need, use 1.0; for 80%, use 0.80; for 53%, use 0.53; for 0%, use 0.0; etc. If a school provided you with a range, like 80–90%, use the lower figure (the 80%) to prepare for the worst case scenario.
• FN is financial need.
• Note that you must follow the order of operations to successfully solve your equations (i.e., attend to the calculation in parenthesis first).

If you’ve been following along, you should have estimates of your out-of-pocket costs at every school you investigated. If you haven’t, refer to our example, where you’ll notice the range of out-of-pocket costs. Many families would consider the difference between paying $9,000 a year and $27,800 a year very significant. You’ll also notice that School A, the school with the second highest cost of attendance, is actually one of the student’s most affordable options. Similarly, School B, despite having a higher cost of attendance than School D, is actually more affordable when we calculate out-of-pocket costs.

7. Consider scholarships.

Now that we’ve gone over the basics, it’s time to address scholarships, whose effect on your financial aid package isn’t always straightforward. In fact, the way your scholarship winnings help you afford college depends on your financial aid situation, so let’s consider every scenario:

• If you do not demonstrate any financial need: As we’ve learned, you will not receive any need-based financial aid, and you will be responsible for paying the entire cost of attendance out of pocket. If you win a merit or athletic scholarship, however, the amount can go directly toward your out-of-pocket costs (i.e. subtract your private scholarship award from your out-of-pocket costs). This situation is the most straightforward.
  • For example, you do not demonstrate financial need at an in-state public university. Your out-of-pocket costs equal the total cost of attendance of $12,000. Since you do not have a need-based financial aid package, any merit or athletic scholarship you receive can be applied directly toward your out-of-pocket costs. Winning $500 by, say, coming in third place in the Stuck at Prom Scholarship Contest means you can put all of your award on your costs ($12,000 - $500 = only $11,500 more that you need to come up with).
• If 100% of your financial need has been met: Your scholarship situation is tricky. By law, your need-based financial aid package (composed of federal grants, federal loans, institutional scholarships, and private scholarships) cannot total more than $300 over your financial need. If your need is already met but you win an outside scholarship(s) that exceeds $300, your college is required to reduce your need-based award. It may not immediately seem fair, but in these situations, it’s most common for schools to reduce your loan amounts before cutting back your grants or institutional scholarships. Talk to your school’s financial aid office for more information about how your scholarship will affect your need-based aid.
  • For example, let’s say your school is meeting 100% of your $30,000 in financial need with a Pell grant, two federal loans, and an institutional scholarship to cover the rest. When you win Unigo’s $10,000 Scholarship, you must put that money toward your financial need, not your out-of-pocket costs. Because your financial aid package now exceeds your financial need by $10,000, your college is legally required to adjust your financial aid offer. The best case scenario is that the school will reduce your federal loans by the full $10,000, but it may reduce your grants or institutional scholarships instead (or reduce all three in tandem). Communicate with your school to learn its policy.
• If you have unmet financial need: If you have financial need, but a school is only meeting 50% or 70% or even 99% of it, you still have what is called unmet financial need. If you were to win an outside scholarship, your award could be applied to your unmet financial need (the amount of which would otherwise increase your out-of-pocket costs).
  • For example, if your financial need is $25,000 but a school will only meet $15,000, you still have $10,000 in unmet need. Without any additional scholarships, that $10,000 would mount onto your out-of-pocket costs, but let’s say you win Niche’s $2,000 “No Essay” Scholarship. Some schools will let you apply that $2,000 directly to your unmet need, making your unmet need $8,000 instead of $10,000. You’ll need to talk to your financial aid office, however, to discover its policy.

In sum, depending on your circumstances, your outside scholarship could reduce your out-of-pocket costs, your unmet need, the amount of federal loans you need to take out, or any other component of your need-based financial aid package. To get the most accurate information for your situation, talk to your school’s financial aid office—you’ll be making a call anyway; you are required to report any outside scholarship winnings.

8. Think ahead.

If you have just done the math for the schools to which you want to apply, remember that the calculations you have in front of you are based on estimates—realistic estimates, but estimates nonetheless. Your financial aid letters, which you will receive from all schools that have accepted you, will detail your official financial aid packages offered to you at every school. In the meantime, the calculations you have just performed can help in one of a few ways depending on where you are in the college application process.

• If you’re still in the midst of your college search: Getting an idea of what your EFC would look like at the schools that interest you can help you decide if you want to apply to them or not. You may decide you don’t want to waste application fees on schools whose out-of-pocket costs are not within your budget. If you’re conducting a budget-conscious college search, you probably also have a better idea of the kinds of schools where your out-of-pocket costs would be the lowest: community colleges, in-state public universities, colleges committed to meeting 100% (or a very high percentage) of your financial need.
• If you’ve applied to school and are waiting to receive an admissions decision: As soon as you have an estimate of the out-of-pocket costs you can expect at the colleges to which you applied, make a plan. Plan for the most expensive out-of-pocket costs, just in case that school ends up offering you your only acceptance. Talk to your family about the contributions they’d like to make to your education, your savings, summer employment, etc. These options can help you pay those out-of-pocket costs when the time comes.

It’s probably too late in the game to change the schools to which you’ve applied, but if you’re worried because you didn’t think to calculate out-of-pocket costs before you applied, remember that the numbers you see now are just estimates. Your official offers will come with your financial aid letters. When that day comes, if you still can’t afford any of your college offers after talking to your family about your options, you may consider applying to every private scholarship you’re qualified for, taking a gap year to work, or applying to an affordable community college with rolling admissions before reapplying to more affordable schools next year.

Do be careful if you decide to pay your out-of-pocket costs with private loans. You may already be expected to take out federal loans, and adding private loans will add to your debt. Plus, their interest rates are usually higher. You can learn more about private loans here.

Page last updated: 05/2019