Pay “Wholesale” for College Success Bulletin
Fall is an exciting time because of “back to school,” football season and foliage, but what really makes this time of year thrilling is that it represents the kickoff to financial aid “season!”
In the off chance that you do not agree, I want you to know that I took it as a personal challenge to write the most boring article you’ve read in in the past year. 🙂
What follows is a list of “to-do’s” that, although dull to a normal, well-rounded person, has important implications for parents who are worried about how to afford college.
Research priority financial aid deadlines for each college. Students and parents are usually aware of application deadlines for colleges, but many overlook when financial aid applications must be filed. This is a problem if a college has limited endowment resources and awards financial aid on a first-come, first served basis. Example: if a student is applying “Early Action” or “Early Decision,” there’s a strong likelihood that the financial aid priority deadline for the CSS Profile coincides with the EA or ED deadline (November 1 or November 15th). If the student is not applying early, the priority financial aid deadline for the FAFSA and Profile could be February 1, February 15th or March 1st or later – they vary by school. Which brings me to:
Research financial aid forms required by each college. Every college requires the FAFSA (Free Application for Federal Student Aid), but approximately 200 institutions require the CSS Profile as well. The latter group consist mostly of private institutions that have large endowments (but University of Michigan, University of Virginia and University of North Carolina are public universities that mandate the Profile), Some Profile schools require a Non-Custodial Parent Profile in the case of divorced or separated families. Most Profile schools want self-employed parents to complete a Business/Farm Supplement. Last, some colleges require their own institutional forms, too. (I warned you that this wasn’t exactly fascinating, fun stuff!)
Research the generosity of each school. Some colleges are generous, some “not so much.” The good news is that this information is publicly available, because colleges must disclose statistics such as “Average Percentage of Financial Need Met” to the Department of Education. They must also publish information on what the average financial aid award consists of, i.e. what percentage is free stuff (grants and scholarships), what percentage is “self-help” (loans and work-study.) The best way to gather this and other important information (such as average graduation rates, average financial aid award of Freshman vs. undergraduate students) is through the “Common Data Set.” Example: if a student is interested in Syracuse University, google “Syracuse University Common Data Set.”
Estimate financial aid awards BEFORE getting “you-know-who’s” hopes up. This is more of a parent, not a counselor action item, but the earlier the parent starts, the better expectations they and their child will have about whether a college is affordable. Most families don’t look at college costs until Senior Year, but they’d be better off doing so in the Junior or even Sophomore Year, long before finalizing a college list. The easiest way to do this is by using the “Net Price Calculators” that the Department of Education mandates each college publish on its website. These calculators frequently show that the net price is significantly lower than the “sticker price,” which should give hope to families who might otherwise assume that a particular college is unaffordable. One flaw is that they do not all ask for the same information. Another is that they do not tell a parent how to improve eligibility.
Learn strategies to improve eligibility. The financial aid regulations are overly complex and counterintuitive, but it can literally pay to slog through them if you learn how to increase the likelihood of grants and scholarships. Briefly, child “stuff’ penalizes a family in the financial aid formulas more than parent “stuff.” Meaning, savings in a child’s name will “count” almost 400% more against a family more than parent assets (20% vs. 5.64%). And some assets are completely off the “financial aid balance sheet” – they do not penalize a family AT ALL (insurance and annuities are usually exempt from the financial aid formulas). Finaid.org is a comprehensive source of information. I wrote a book on this topic, How to Pay “Wholesale” for College, which your families can download for free if you become a charter member of my College Planning “Guru” membership (details below).
Be strategic. The average discount given by private colleges is a whopping 45%, according to the National Association of College and University Business Officers! How can a family get almost half off? My top recommendation is to think STRATEGICALLY about the college list, instead of applying only to schools represented by stickers plastered on rear windows of cars in the neighborhood or that feature football teams on TV each Saturday.
An example of strategic college list selection is applying to schools where the student is in the top 25% of admitted freshmen by GPA and standardized test scores.
Another is looking at scholarships awarded for certain majors (such as Computer Science, Environmental Studies, even Classics.)
A third – and my personal favorite – tactic is applying to a college or two that have historically competed against EACH OTHER. In other words, many kids are busy doing things to “chase” after the colleges they want (engaging in extracurricular activities that “look good” for college, enrolling in 17 AP classes, taking the SAT five times). But colleges want students just as badly, maybe even worse. This is a big clue why kids get dozens of glossy direct mail pieces each week from schools they never heard of! If a student receives scholarship offers from rival schools, he might be able to improve his award by playing them off against each other!
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Andrew Lockwood is an attorney-turned “late stage” college finance consultant and publisher of the Pay “Wholesale” for College Success Bulletin.