The cost of college has become one of the most emotionally charged financial decisions families face. Sticker prices can exceed $100,000 a year, and headlines about student debt only heighten anxiety. Yet according to Kalman Chany, Founder of Campus Consultants Inc., the biggest mistake families make is assuming the listed cost of attendance is what they will actually pay.
The State School Assumption
One of the most common misconceptions, Chany explains, is that public universities are always less expensive than private colleges.
“That’s simply not true,” he says. “Private colleges often offer more merit and institutional aid than public universities give to out-of-state students. While in-state public options can be less expensive for those who don’t qualify for much aid, out-of-state students typically pay near full price. Private colleges compete aggressively for strong applicants with more generous aid packages.”
Borrowing Has Limits
Another dangerous assumption is that parents can borrow whatever they need through the federal Parent PLUS loan program. That will no longer be the case for students starting a program of study after July 1, 2026, and/or who have their first federal originated after that date. The new rules will limit annual borrowing for a student to $20,000 with a $65,000 aggregate cap. “However, those who have a student currently enrolled may be able to be grandfathered under the old rules with higher borrowing amounts permitted – provided they plan now to qualify,” Chany explains. “If families wait too long to act or do not understand all the potential pitfalls in the fine print they could miss out on being grandfathered. ”
Merit, Need and Custom Strategy
Financial aid can consist of merit scholarships, need-based grants, work-study jobs and student loans. Each college will determine your eligibility for such aid.
Be aware that colleges do not use merit money to reward academic achievement”, Chany says. “They do this to attract students who will improve their profile who might otherwise go to a higher-ranked school with a higher net price for the family”
He cautions families against relying too much on college’s online net price calculators.
“They’re often inaccurate by a large margin and can lead to erroneous assumptions” Chany says.”
Start Earlier Than You Think
“Aid planning should ideally begin before January 1 of tenth grade,” Chany says. First year eligibility is normally based in part on “prior-prior year income” (e.g. 2026 income for a student starting college in the Fall of 2028). By 12th grade some opportunities to boost aid eligibility are gone.”
He frequently sees families overestimate their ability to navigate the process independently.
“They assume non-profit colleges act like charities,” Chany says. “But colleges are businesses. Revenue and rankings influence their decisions.”
529 Plans and non-federal Alternate Loans
Savings tools such as 529 plans remain valuable, but families subject to the new borrowing limits on PLUS loans will need to be more strategic with distributions.
The long-term conventional wisdom to completely liquidate the 529 plan before taking out any education loans may no longer be applicable given the $20,000 per year per student PLUS loan limit, Chany says. “The conventional wisdom to first use federal loans may not make sense for some families. PLUS loans have a soft credit test that does not use FICO scores with all borrowers getting the same rate. For those who will need to borrow more than the PLUS loan aggregate limit, it may make sense to borrow some money from a non-federal education loan program sooner, before one’s FICO score used for such debt is affected by past PLUS loan borrowing.”
Knowledge Is Leverage
For Chany, the bottom line is simple: information creates leverage.
“College is likely the second-biggest financial decision a family will make,” he says. “The families who plan early, understand the rules and challenge assumptions consistently pay less.”