Selecting the best college to meet your needs and fulfill your ambitions has always been a challenging and arduous process. There is a lot at stake and thousands of colleges to choose from in the United States alone.

Families use a number of criteria to help narrow their choices to a manageable level. These include school location, availability of a desired academic major, and school reputation. Cost is another important factor. While residents of some states (Georgia residents, for example, can attend any Georgia state school tuition free, if their GPA is 3.0 or above) have a relatively straightforward calculation, we find many families eliminate private schools from consideration due to misinformation about how the financial aid process works.

Cost of Attendance

The first number you need to consider in your calculation is Cost of Attendance, or COA. For instance, Harvard University is a private Ivy League school, and the University of Virginia (UVA) is one of the top five public colleges (also known as a “public Ivy”). For 2019-2020, Harvard University’s COA was about $72,500 and the University of Virginia’s COA was about $32,900 (in-state residency).

Expected Family Contribution

The second number to include is Expected Family Contribution, or EFC. By employing the services of a competent financial planner, you can determine how much of your income and assets are necessary for your college contribution. If, for example, a family in Virginia has an EFC of $10,000, their need at UVA will be $22,900. Their need at Harvard will be $62,500.

“Need” is the amount that remains to cover attendance after the family’s contribution is considered.

If Harvard uses its large endowment to cover 90 percent of the family’s need, the true cost for attendance is $16,420 per year at Harvard. If UVA only covers 20 percent of the need (because of its more limited financial resources), the true cost of attending UVA will be $28,320. The family actually saves $12,070 a year by sending a child to Harvard instead of UVA.

Harvard Virginia
Cost of Attendance $72,500 $32,900
Less: Expected Family Contribution <10,000> <10,000>
Remaining Need $62,500 $22,900
Less: Aid (% of Remaining Need) <56,250> <4,580>
True Cost of Attendance $16,250 $28,320

This example is not as far fetched as it may at first appear to be. Many private schools have large endowments that allow them to fund a large portion of the unmet need through “free money” scholarships and grants.

Years in College

In addition to saving money each year on college, families need to consider how many years each child may be in school. Ivy League schools such as Harvard are renowned for helping their students stay on track to graduate in four years. If, for example, you discover you need a class to graduate this course will often be added to your schedule to maintain your timeline for four-year graduation. Public schools, however, are much more likely to expect you to fit your requirements into your schedule. If you need to take particular classes, you may have to wait another year, turning your four-year graduation track into a five- or even six-year timeline.

Make Your Decision

Great reasons exist for attending a public college instead of a private college or university. Saving costs, however, is not necessarily one of them. Make sure you consider all your options before you fill out your applications.

– The general public has been using tax accountants for years to legally minimize their tax liabilities. Call us at 1.800.809.0800 if you are interested in talking with a licensed financial advisor who can best guide you through the college financial planning process and ensure your EFC is as low as legally possible!

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