Would you start shopping for a home without a sense of what the mortgage will be?
Yet, due to the confusing nature of the process, most families START SHOPPING for colleges (which, next to a home, may be the largest expense you ever face), WITHOUT a sense of what the college in question WILL ACTUALLY COST them.
To keep yourself from overpaying and/or massive debt you REALLY want to go into college admissions as an informed consumer!
In fact, your starting point SHOULD BE an understanding of the college financial aid process, both its pitfalls AND its' OPPORTUNITIES (yes, even for wealthy families).
I’ve written more in depth posts about college costs but want to post a few basics here to get you started.
1. There are 2 kinds of financial aid: NEED-BASED aid and MERIT-BASED aid. Need-based aid is based on a government formula that will determine how much you can afford, based on your family’s income and assets.
2. The Free Application for Federal Student Aid (FAFSA) is the first step towards applying for need-based financial aid. When you fill out the FAFSA, you’ll get a reply within a few days which will tell you the result of the formula, which is called your Expected Family Contribution (EFC). This is the amount you are expected to contribute towards your child’s education EACH YEAR.
Don’t be surprised if this number seems way beyond what actually is feasible for your family! And, don’t immediately decide to limit your options too soon, because colleges give a lot of the two kinds of aid mentioned above, so you may get help!
3. You can get an ESTIMATE for what your EFC might be by using this practice calculator on the College Board’s website. The real FAFSA should take you less than an hour.
5. About 400 colleges require an additional document called the CSS Profile, which probes more deeply into your family’s financial situation. Your EFC at colleges that require the CSS Profile MAY BE HIGHER than at colleges that use only the FAFSA. You can check to see if any of the colleges on your list require the CSS Profile here.
6. Your financial need will be different at different colleges, because your need is the total cost of attending a college (the "Cost of Attendance" - which is tuition + room & board + transportation + books + other expenses), minus your EFC.
You may NOT have a demonstrated financial need at one college (at an in-state public college, for example), but you MAY HAVE demonstrated need at another.
So yes, this stuff can get confusing. Ugh.
AND, paying attention to it at the START your college search process reaps huge benefits, such as shaving tens of thousands OFF the cost you pay for college!
If you have questions about any part (or all!) of this, and about how I can help you navigate it all, I’m happy to chat. You can book a free call here.
Or, consider my course The Tuition Markdown Method™