STEP 1: FORECASTING COSTS
Step one in the process is forecasting cost. Everybody needs to understand that the cost of attendance over time has increased approximately 6% to 8%.
If you look back 10 years back in 2000 to 2001, colleges like the UCs were half the cost that they are today. What you want to understand is that it's been increasing about $1,000 per year. I know that everyone says 6% to 8% but at some point, the compounding on the 6% to 8% would just seem a little bit ridiculous.
To define cost of attendance a little bit more, it actually includes tuition, fees, room and board, books, transportation, and some personal expense money.
Every single university has a cost of attendance unique to itself. So that's something that you're going to want to look into. What you can do is go to the financial aid section of any university or college's website and they should be able to tell you exactly what the total cost of attendance is per year for their university.
The current cost that the Cal State University here in California is approximately $25,000 per year. Some of the universities, the Cal states at least, are little more, little bit less. Usually, it's just due to the fact that maybe the cost of living might be a little bit different or their amount that they allocate for personal expenses might be a little bit different. But, usually, they're about within $1,000 of each other.
The UCs on the other hand are about $33,000 to $34,000 per year. And, I've seen both these types of universities go up about $1,000 per year.
Private schools can range significantly. Here in California their average is probably about $54,000 to $58,000 per year. Some of your top two schools like USC are over $60,000 right now. But then some of the private Christian colleges might be somewhere like around $47,000 so it does average out anywhere between about $54,000 to $58,000 per year.
Check on that in advance.
Now, that you understand the term cost of attendance and what your projective cost of attendance would be for your children, the next step is to look at financial aid.