As our teens grow taller, seemingly overnight, so, too, can the stress and need for information about paying for college soar, especially as families start the college admissions process. Parents have a good reason to be concerned.
The average annual expense for tuition, fees, room and board in 2017-18 was calculated to be $20,770 for public schools and $46,950 for private nonprofit colleges. In addition, the average debt after college for students receiving bachelor’s degrees was $30,301 (2015-16.) With such significant financial stakes in paying for college, it is no wonder that parents have more questions than answers when they begin to think about how to make college affordable for their family.
FAQs: Financial Aid and Paying for College
1. How does my family know if we can afford college for our kids and, if so, how do we determine how much we can spend?
The cost for tuition, room and board that colleges publish are the “sticker prices” and many families find they are required to pay far less. Financial aid, merit aid, and scholarships can bring down the price tag and, in some cases, dramatically so. The first step in determining what a more realistic cost estimate will be for your family is to find the Net Price Calculator (NPC) on each college’s website, usually under the Financial Aid section. This is an online tool that provides parents with an estimate of what the out-of-pocket expenses might be for their student, should they apply and be admitted.
Parents are asked to provide top line information about their income, assets, number of children, and marital status. The calculator will estimate the cost of attendance – tuition, fees, room and board, along with books, supplies, transportation, etc. – minus the family’s Expected Family Contribution (EFC.) The NPC will then show how that cost can be paid for by an award package that might include scholarships, financial aid, work-study, grants and loans.
Once parents have more clarity around the net costs for the particular colleges their teens might be interested in, they can begin to crunch the numbers. Families should consider any future savings from current income and assets they may already have from 529 (college savings plans that have special tax benefits) or other savings accounts.
2. How do parents and students find colleges that offer generous merit aid? Are those schools looking for a certain minimum SAT/ACT score to be eligible?
One of the best tools to search for merit aid is the Domestic Undergraduate Need-Based and Merit Aid tool created by Jeff Levy of Personal College Admissions.Com and Jennie Kent of Educate Abroad. This tool lists over 400 colleges along with the merit aid they offer, and it allows parents to sort and compare using the criteria that matter most to them. Levy and Kent suggest that parents pay close attention to the column that shows the percentage of students at a particular school who are granted merit aid, when considering the likelihood of their own student earning an award.
Parents can also search for merit aid awards for specific schools using the Common Data Set. They simply search for the words “Common Data Set” along with the name of the college to find the information. Although there is much that is interesting to read in the Common Data Set, skip to Schedule H for the information on merit aid.
Another tool to search for data on merit and need-based aid for specific schools can be found using College Navigator; families can filter by school and the financial aid information they seek. College Navigator is part of IPEDS (Integrated Postsecondary Education Data System), which is publicly available from the US government.
If merit aid is important for a family to pay for college, Susan Dabbar, CEO of AdmissionSmarts, urges parents and students to think strategically and look for those colleges that offer merit aid, AND where a student tips the odds of being awarded merit aid. Dabbar explains,
Find colleges where your student is on the upper end of a school’s academic criteria in terms of GPA and SAT/ACT scores. This will greatly increase the chance that your student will be considered for an award.
She says that, in many cases, students will increase their chance of receiving merit money if they are well above the 50th percentile in GPA and test scores for accepted applicants and preferably above the 75th percentile. A few colleges, mostly public institutions, will list their merit aid award guidelines, including test scores, on their website. For most private universities, there is no specific score that a school looks for to give merit aid because there are many other factors that are considered.
3. What are the important things I should look for around financial aid as my teen begins to create their college list?
An important number to look at is the percent of students at any given university who receive need-based financial aid. Check to see which colleges meet 100% of demonstrated need because many meet a much smaller percentage. Parents can consult the Common Data Set in advance of applying to see how generous each school is with their financial aid.
However, Levy cautions them to check the data carefully
Too often freshmen awards are higher than sophomore, junior and senior year awards, so when parents are comparing colleges and awards it is important to focus on the line that says “all undergraduates” not just “freshmen.”
Levy also recommends
If you believe that your family will qualify for need-based aid, it is important to learn your eligibility early in the process when your student is a high school sophomore or junior. If you are eligible, then they should be populating their college list with schools that are generous with need-based aid. A good source to learn what your EFC is likely to be is the College Board EFC Calculator.
4. Should my family fill out the FAFSA (Free Application for Federal student Aid) even if I don’t think my student will get financial aid?
The short answer is yes. While some families know in advance that they will be unlikely to qualify for financial aid, most families should still complete the FAFSA. Why? Because if family circumstances were to change, because of a job loss, marital or health change, or other unforeseen events and if a student needs funds during any of the four years, the school will have noted that they were admitted without applying for aid and could disqualify them on that basis.
In addition, Levy tells parents, there are a small number of schools that require the FAFSA, even if your student is only looking for merit aid, because they want to make certain that your family is not eligible for need-based aid before they award merit aid. But again, this is not a hard and fast rule.
In cases where a student’s academic performance is on the cusp of the admissions criteria (towards the bottom of what the school normally admits) and the school considers requests for financial aid in their admissions process, there could be a slight advantage to not submitting a FAFSA. Parents can determine this from the Common Data Set of each school to which their student is applying.
5. If we think our family is eligible for need-based financial aid, how do we estimate the amount of aid we might receive?
Beginning October 1st of a teen’s senior year in high school, families seeking need-based aid should complete and file the FASFA, and within a few days they will learn the amount of their EFC. This is an indication of what the federal government calculates a family can afford to contribute toward college expenses.
According to Michelle Kretzschmar, founder of DIY College Rankings,
If you are looking for need-based aid, the sooner you get your FAFSA in the better your chances are at qualifying for federal, state and college distributed funds. Those funds could include Pell grants, state financial aid-awards, and need-based grants from private and public schools. There are also college and state-specific deadlines to be aware of. You never know what the circumstances are that could help your student with aid, so it is better to get the FAFSA in as soon as possible after October 1 to try to quality for those potential awards.
6. I’ve heard that we may also have to fill out a CSS Profile. How do we know if it is required for the colleges my teen wants to apply to?
There are approximately 300 colleges and universities that require families to complete this additional form that is found on the College Board website. Submitting it in October of a student’s senior year helps to determine if they will be eligible for need-based aid. Here is the list of institutions for 2018-19 that will require your family to take this extra step.
7. The acceptance rate at many colleges is higher in the Early Decision (ED) pool than it is for Regular Decision (RD). However, our family can’t afford colleges that will not offer need-based financial aid. Should my student still apply ED and hope for the best?
The simple answer is that Early Decision may not be the best option. Because Early Decision is binding, as opposed to Early Action, where students leave all of their options open, ED applicants will not have the opportunity to compare financial aid awards between schools. There are often big differences in the offers made and students will want to compare these before committing to a college, which Early Decision will not allow.
Technically, students can withdraw from an Early Decision commitment if their family’s financial needs are not met. But if this happens, a student is left in mid-December scrambling to finish their applications or to appeal the financial aid offer over the holiday break before the January 1 Regular Decision deadline. Not an ideal situation and one that families should avoid, if possible.
By applying Regular Decision, students and parents can consider all of their options at once, allowing the student to select the college that fits them best. There are no firm rules. Families need to consider how much aid a school is likely to offer and what the acceptance rate looks like in the ED round and the RD round (here is a tool for Early Decision and Regular Decision Acceptance Rates, August 2017) because if a family is relying on financial aid, this needs to be considered carefully.
Jeff Levy, CEP, is an educational consultant based in Santa Monica, California. He works with students locally, regionally, and internationally on their college search and application process, and with parents on college affordability and financial aid. He can be reached through his website here.