Why your college costs could jump after freshman year

(InvestigateTV) — About 80 percent of colleges award more financial aid to freshmen than they do in future years, according to The College Investor.

Robert Farrington, the founder of The College Investor, said this process is called frontloading financial aid.

Farrington said parents need to realize they could be getting more help in the first year than they will in subsequent years, which means future years may be more expensive out of pocket.

“The important thing for families to remember is that the first year is always the cheapest,” Farrington said. “Beyond frontloading, which can reduce your financial aid in future years by an average of about $1,000 or more. Prices are rising as well. Average tuition and room and board are going up 3 to 8 percent per year for college. So, you just need to do the math.”

He encouraged families to plan for prices to rise at least 10 percent every single year to build in a buffer. He said it’s important to read the fine print of any financial aid letter you get.

“When you actually get to the financial aid award portion, such as Pell Grants scholarships, you want to understand the terms and conditions and how you can get those renewed in future years,” Farrington said. “For example, Pell Grants are federal grants, and they’re based on your FAFSA and your income and your assets. So, if those don’t change very much year to year, you can probably count on that.”

When it comes to university grants and scholarships, you need to understand the terms and conditions and whether any scholarships are hard to renew after the first year. It could require something very hard for a freshman to get such as a 4.0 GPA.