COLLEGE AND BEYOND

Applying to College? Financial Factors to Consider

If you know the difference between dream, target, and likely schools, you’re almost ready to apply! Before you start, read this article for helpful info about college financial planning.

What is financial aid?

Financial aid is money that you can receive from postsecondary educational institutions as well as local, state, and federal government agencies to help pay for college or career schooling.

Since each school has different offerings—including scholarships, grants, and work-study programs—the best way to start determining how much aid you could receive is to visit each prospective institution’s official website. Look up whether the institution is need-blind (meaning that admission decisions are unrelated to prospective financial need), and look up the school’s average aid awards (you might be pleasantly surprised!).

That said, you won’t know what the actual cost of college will be until you’ve filled out the Free Application for Federal Student Aid (FAFSA^®) form and received financial aid offers from schools you’ve been admitted to.

Which type of school is the best option for you financially?

Every prospective student and school is different. It’s possible that your dream school’s tuition could be less than your target school’s. It’s also possible that your likely school could cost as much as or more than your dream school.

• Pro tip: Not everyone pays the “sticker price”! A school’s published tuition and fees may be significantly higher than what you’d end up paying.

Generally (and unfortunately), the cost of college keeps rising. According to The Princeton Review^® 2025 College Hopes & Worries Survey Report, 98 percent of respondents expressed that they’ll need financial aid—with 48 percent noting that it would be extremely necessary.

Since you don’t know what your aid award could be (our financial aid advice: apply, apply, apply!), one strategy is to disregard cost during the application process and wait to see what your admission and financial aid offers will be—or at least, don’t take the published expenses at face value.

Cutting cost out of the equation could spike your (or your family’s) anxiety levels. That’s why we also recommend applying to at least one likely school that you could comfortably pay for if you didn’t receive any aid. This helps increase the likelihood that you will (1) be accepted to a school that you like and (2) be able to afford it.

What are some sample college costs?

Below is a financial breakdown based on a fictional list of schools for an in-state applicant. Only tuition (excluding financial aid) has been accounted for:

Dream School

Attending a top-tier private research university like Stanford may be the dream. These schools likely have lower admission rates, rigorous academic requirements, and higher annual fees. Currently, the yearly tuition cost for a full-time student would exceed $65,000 without financial aid, on top of which you might add about $34,000 in housing and other fees. That said, a top-tier university may also practice need-blind admissions and offer generous financial aid packages with high proportions of gift aid.

Target School

Generally, target schools may cost less to attend, but that isn’t guaranteed. Let's say the target school is a prestigious public research university within a state system like the University of California Berkeley. Yearly tuition costs for in-state students would be around $17,000. With housing and additional fees, the cost triples.

Likely School

Likely schools will probably be on the lower end in terms of price. If applying to a school within a large university system that focuses on career preparedness like California State University Monterey Bay, yearly tuition would be just over $8,000, with an additional $22,000 in housing and additional fees.

Average Costs

If you’re looking at the total annual cost of U.S. four-year postsecondary institutions, there’s a good chance you may pay around $38,000 on average, according to a December 2024 report from the Education Data Initiative.

We highly encourage you to conduct thorough research and determine which universities best align with your needs and budget.

Want more information about college financing? Explore the Financial Aid for College Insights Center!

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