Everyone should make sure the numbers are correct and that the college FA office did not make a mistake, you did not make a mistake. If you don’t understand how they fit the numbers- though precise formulas often not shared, you are not getting the full picture. So a sit down and go over the numbers with the fin aid Director is in order here. Have the NPC numbers right in front of you too and have the FA director explain the difference.
You ask how people are supposed to be able to pay for college. You and your student are expected to pay with past, present and future earnings. Like the 3 Ghosts of Christmas visiting Ebenezer Scrooge, so do the financial aid formulas often work.
Both you and your student should have been saving. When I was a kid, lower middle income family as we were, I got savings bonds for all sorts of things and when the piggy bank got full, it was emptied into a bank account. A certain. % of gift money, babysitting and chore money, award money went into the college fund. My parents also put a bit away too.
When my kids were born, my niece and nephew, we gave money as well as a gift. We knew college was something we wanted to afford for them in the future.
Then you have present earnings. Your student may have to work. Part time during the school year, full time summers. Most college students work fir personal ventures, help out on college costs, and because they have to do so to meet the college bills. Parents have to take austerity measures those years. Vacations might be to visit college kid. Not the time for major spending. It’s like buying a Mercedes or whatever car each year and driving it off a cliff.
Then there are the student and parent loans. You borrow if you have to do do. If you’ve saved enough, can pay enough out current income, you borrow less or none. Kid can borrow $27k over 4 years, maybe you parents borrow $50-60k., more. $320k of college cost, you save a third, pay a third, borrow a third. You shuffle those numbers the way you can work them if a private school is what you think is a priority.
But most students commute to college, work full or part time. Going to sleep away college is a luxury. State schools cost far less, and there are sometimes merit awards in the mix.
That’s how people afford college, if they can.