Worried about how you are going to afford college? You are not alone and I am here to share with you the first steps in making the process as painless as possible. Can it be painfree? No, I cannot guarantee you that, but I can provide you with a checklist of steps that will ensure that you are ready to make better decisions for your student and your family.
By the way, if you have an unlimited college fund for your teen, then don’t bother reading any further. This blog post is not for you.
If you are concerned about how much this is all going to cost you, then read on.
But first, let’s cover some important terms
Let’s get some common terms out of the way so you know what these things are:
- Cost of Attendance. This refers to the total cost that an institution has estimated for one academic year that includes tuition, fees (an estimate only), room, board, books/supplies (an estimate only), and travel (an estimate only).
- Tuition and Fees Calculator. This is web-based calculator that resides on an institution’s website that provides you with a current estimate of the charges for tuition, fees, room, and board. The easiest way to find this calculator is to type the name of your institution and “tuition and fees calculator” into a search engine.
- Net Price Calculator. This is a really important web-based calculator that allows you to put in specific information about you and your student’s income and assets as well as your student’s academic achievements. The calculation will allow you to see what the “net price” may be for your family.
- Sticker Price. This is what I refer to as the published tuition, fees, room, and board costs. Whatever you do, don’t assume that the sticker price is the final price that your student will pay.
- Net Price. This is the estimated costs after any financial aid is factored into the equation. The net price results will usually include Federal grants and loans.
- Merit Aid. This is financial aid (usually grants or scholarships) that is based on your student’s merit, meaning their achievements or involvement in certain activities.
- Need-Based Aid. This is financial aid (usually grants or scholarships) that are based on your ability to pay the costs of college.
Now, here’s what you can do
Here is how you put a plan into motion. This process takes some time—although it is not too late even if your student is a high school senior—and takes a willingness to talk honestly at each step.
STEP 1: Review your current financial situation. Talk with a financial advisor, if needed. Be honest with yourself and others about where you are financially and how having a student in college will change your financial picture. Don’t skip this step or else you will have to come back to it at a time that may be more stressful for you.
STEP 2: Talk with your student about how much the family will be able to contribute to their education. This may be a difficult or awkward conversation, but it is necessary to avoid misunderstandings and added stress during the process. Also, it is a great time to teach your student about how much investments such as education cost, what the expected return will be (they get a job after graduation and can make it on their own!), and how they can learn to manage their own finances.
STEP 3: Use the Tuition and Fees Calculator. Make a list of potential colleges and universities your student is interested in and check out their Tuition and Fees Calculator for an estimate of the current tuition, fees, room, and board rates. Make a note that those amounts may increase before your student enrolls. Use this information to get an estimate of the total amount before financial aid. Very important: Don’t pass out at this stage.
STEP 4: Use the Net Price Calculator. Each institution that receives Federal financial aid are required to have a Net Price Calculator on their website. Use it to make a preliminary determination of how much aid your student may qualify for. Each institution may ask slightly different questions that serve to determine eligibility for their financial aid options. Remember: This is an estimate of your potential net price. It will give you a starting point to determine what other aid you may want to search for.
STEP 5: Review the results together. Once you have gathered all of this information, sit down with your student and review the results. This is a good time to go back to the discussion about how much the family can or will contribute. It is also an opportunity to discuss other means of paying for college: finding additional scholarships, getting a job, or using other methods of reducing costs.
STEP 6: Apply to college. The next step in this process is to determine to which colleges your student will apply. I suggest widening your net so that your student has multiple options to consider. Keep the information that you have gathered about costs and net price and compare your homework to the financial aid and scholarship awards that come in.
Now, take a deep breath. If you follow the steps above, you will be better informed about the process and how to manage it. In my next post, I will share some ways you can maximize your chances of getting more financial aid. Here’s a hint: Your student will have to do some work.