Personal Finance

Just how affordable is that college education?

True cost of college
True cost of college

As college acceptance letters start making their way to mailboxes and inboxes, families' next big dilemma is figuring out which offers are affordable based on the financial aid award letter. That's not as easy as you might think.

"Prepare to be confused," said Mark Kantrowitz, senior vice president at "These letters are sales and marketing documents. They're designed to make you think you can afford this school."

Financial aid letters also use a variety of formats, requiring some number crunching on the recipient's part to make an apples-to-apples comparison of different college offers. (Check out the video above for tips to calculate your real cost based on aid letter offers.)

Read MoreWhy I may not send my kids to college

When in doubt, call the college to ask what a particular line item means, said Jodi Then, an education advisor with American Student Assistance's College Planning Center. A variety of acronyms, abbreviations and terms can make it tough to decipher what's being offered—and more importantly, whether it's a grant that doesn't have to be paid back, or a loan that does. "It's really important for families to ask those questions," she said.

High school students attend Cash for College, a college and career convention, in Los Angeles.
Getty Images

Dig into the conditions, too. Some awards may only be offered to freshmen, or require a minimum GPA to continue receiving them. There are also so-called groans, which are grants that must be paid back if the recipient can't fulfill a list of requirements. "It's not a grant, it's not a loan, it's a hybrid," said Then.

Read More"Boomerang" kids are ruining their parents' retirement

Don't forget to consider how costs will change over the duration of your student's education—as charges rise, aid is likely to cover a smaller portion, said Kantrowitz.

For the 2014-15 academic year, the average cost (tuition, fees, and room and board) at a private four-year college was $42,419, up 1.6 percent from the year before, according to The College Board. At public four-year colleges, the average cost was $18,943, up 1 percent. Some colleges also "front load" grants, offering less such aid for upperclassmen, he said. (How to tell? Compare financial aid figures for beginning students and all undergrads at the college on to see if there's a significant difference, he said.)

Once you've boiled down the bill to what you're responsible for paying each year, consider how much is too much. "Is it worth it to pay more to attend that, quote unquote, better school?" said Kantrowitz.

Parents should avoid taking on more debt than they can pay off in 10 years or by the time they retire, whichever comes first, he said. For students, the total debt accrued shouldn't be more than their anticipated starting salary.