College Cost 101: Key Terms to Understand

Understanding key terms can help decipher the true cost of college.

Finding a college that is a good financial fit is important, but deciphering the true cost of college can be challenging. Understanding these key terms can help:

  • Cost of Attendance (or “Sticker Price”): The cost of attendance includes all of the different types of expenses you need to cover to enroll, and stay enrolled, in college. It includes tuition and fees that are set by the college, the cost of books and supplies, as well as living expenses like food, housing, and transportation. It’s often referred to as the “sticker price” because it doesn’t reflect any grant or scholarship aid that reduces the price you actually pay.
  • Tuition and Fees: Tuition and fees are one part of the cost of attendance. Tuition and fees are charged by your college at the beginning of the semester, though many colleges offer tuition payment plans that allow you to make tuition payments throughout the year. 
  • Direct Costs: Expenses you pay directly to the college, like tuition and fees, are called “direct costs.” These costs are fixed (not estimates) and can also include things like on-campus housing and campus meal plans. 
  • Indirect Costs: Ongoing expenses that don’t get paid directly to the college are called “indirect costs.” Colleges provide estimates of these costs, and estimates can vary depending on your living situation (e.g. living off campus or living at home with family). Your actual living expenses may be different than colleges’ estimates.
  • Financial Aid: Financial aid is a key resource that reduces the sticker price of college, sometimes by a lot. There are different types of financial aid — including in the form of scholarships, loans, and work-study — and financial aid can come from different sources. 
  • Net Price (or “Net Cost”): Net prices help you look past sticker prices to determine actual out-of-pocket costs. Unlike cost of attendance, net price factors in grant and scholarship aid, and tells you how much you will need to pay through savings, earnings, or loans. 

College Cost Tips

  • Costs are often listed for just one year — make sure you consider costs for the entire length of the program, not just a single year, and remember that tuition and other expenses often change from year to year.

  • At public institutions, students from out of state typically face higher tuition charges than those attending schools in the same state where they live. 

  • College costs more than just tuition and fees. Take time to consider all of the different types of expenses you’ll encounter throughout your time in college.

  • Because different states and schools offer different grants and scholarships, comparing colleges’ net price is the only way to get an apples-to-apples comparison of your actual expected college costs. In many cases, colleges with a high sticker price can actually have lower net prices than those with lower sticker prices.

A resource from the Peter G. Peterson Foundation, created with support from The Institute for College Access and Success (TICAS)