3 Simple Steps to Save on College Cost
Searching for the right college can be tough. Paying for college can be even tougher! Parents must understand that the college application process is a series of calculated steps. A misstep could cost you greatly. Applying to either expensive colleges or colleges that don’t offer the best financial aid incentives isn’t the best use of your time and resources. Hoping, wishing, and crossing your fingers usually doesn’t get you very far in the arena of college admissions. Once your child has created a college list, do your homework. Below are three simple steps that can essentially save you both time and money.
Step 1: Know what your Estimated Family Contribution (EFC) is—knowledge is power
Expected Family Contribution (EFC) is the amount expected to be paid for your child to attend college. This amount is not covered by grants or scholarships. Some colleges will however allow you to take out a parent loan to cover the EFC amount. The EFC number is determined by various factors including but not limited to adjusted gross income of parents, assets, marital status, family size, and number of children in college. Your EFC alone will not reveal your eligibility for financial aid, but it will show how much you are expected to contribute toward your child’s college costs. It is definitely wise to know your family’s number by the time your child enters their freshman year of high school. Remember, this number could increase or decrease whenever your variables like income, marital status, etc. change.
Visit the College Board’s BigFuture website to get your EFC.
Step 2: Use a Net Price calculator—time is money so don’t waste it applying to schools that aren’t affordable
Each college or university will have a Net Price calculator on their website. The net price is the difference between the “sticker” price (full cost) to attend, minus any grants and scholarships for which a student may be eligible. The sticker price or cost of attendance (COA) includes direct charges (tuition and fees & room and board) and indirect costs (books and supplies, transportation, and personal expenses). Most calculators will also include your EFC in their formula.
Fill out the Net Price calculator for all colleges and universities that are on your child’s college list. Remember, the Net Price calculator is only going to give you an estimate of what grants, scholarships, and loans are available to help offset the COA. This will tell you if this school is a potential good fit based on your EFC and how much the school is projected to award in merit or need-based financial aid.
Once you have determined what is affordable for your family situation, then you can adjust your child’s college list accordingly, allowing you to have a targeted list of colleges that are truly a good fit.
Below is an example of a middle-income family with an EFC of 15,000 a year. They used a net price calculator for XYZZ College to get an estimate of the cost of sending their son to this college on his list.
Some colleges offer grants and scholarships that meet and cover 100% of a student’s need. Most colleges, however, only meet a percentage of a student’s need. To cover the difference, they might offer loans and work-study. Remember, the benefit of using the Net Price calculator is to get a projection or estimation of the cost in sending your child to a particular college or university on their list. This is only a projection since you are self-reporting your own financial information that has not been reviewed or verified by a financial aid professional. Students won’t know what exactly they are receiving until getting their award letter from that school.
Step 3: There isn’t a magic cut off number for financial aid—therefore apply
People always want to know what the cut off range is for receiving financial aid benefits. The truth: there really isn’t a magic cut off number. The best thing any parent can do is apply for financial aid and be an informed consumer. There are so many variables in receiving merit or need-based financial aid. If your child is young, start saving now for college. This will only give you more options in the future when college cost becomes a real issue. A 529 plan is a great way of setting aside as little as $25.00 and then watch it add up over time in savings. It is also recommended that students apply to colleges that are a good fit in every way. If you are a high-income family, you child’s list should really focus on schools that give out generous amounts of merit aid. However, if you are coming from a low-income household, you can focus on schools that give out more need-based aid. There so many factors to cover when talking about finding the right college fit for your child. It really is a personalized process, and the experience is unique for every person, even when talking about siblings in the same home because they might have different college needs.
Financial aid does have yearly deadlines. If you want to be considered, don’t forget to fill out the Free Application for Student Aid (FAFSA). Visit these websites to learn more information about timelines and deadlines:
Angel Hearn is an educational consultant who has experience both in financial aid and student services within the California state university system. Her specialty is helping high school students find the right college fit. She possesses a certificate in College Admissions Counseling and is a professional member of The Higher Education Consultant Association. She is also the founder of My College Bound Consulting, based out of Riverside, CA. My College Bound Consulting uses the latest technologies in communications and database research to offer students her expertise and academic advice in both the college application process as well as financial aid consultation.
For more college related resources, please visit www.mycollegeboundconsulting.net
|Tags: College cost, EFC, Financial aid, Paying for college|