On Tuesday, September 4th , my kids got on the bus and went back to school after a summer break that went by way too fast. Just two short years from now we will mark my oldest daughter’s “last first day” as she starts her senior year of high school. Cue the tears.
Going to college, a vague idea that once seemed light years into the future, is now very real. Although she doesn’t think much beyond the next few months, where she will go to school, what it will cost and how it will get paid for rest top of mind for her parents.
Maybe you are in that place now.
To get on track with your college planning check out this 10 point back to school checklist for parents who want to pay less for college.
1. Create a Top Ten list of potential schools. By their senior year of high school students should have a short list of “Top 10 Schools” that includes some stretch schools as well as at least two or three schools that are less selective but more affordable.
Ideally, schools on this list should meet have been vetted by Mom and Dad, approved of by the student, and be both a good financial fit as well as a good academic fit for your student.
The list doesn’t have to be written in stone. Feel free to add or delete schools as necessary. No decisions have to be made until later in the school year, but having a short list of schools to focus on will save you both time and money. Waiting until the very last moment to make a decision is almost always a mistake.
2. Research college application and financial aid deadlines. Some of the schools on your short list may have college application and financial aid deadlines that expire as early as October.
With each passing month more deadlines will come and go. Make sure your short list includes specific deadlines of when these opportunities expire at each school and get them on your calendar by the end of September. Missing them could cost you or your student thousands of dollars in lost scholarships or other opportunities.
3. Reposition assets before submitting the FAFSA form. Certain assets have a big impact on financial aid. Assets held in the student’s name and non-retirement, financial assets (including those earmarked for other students) owned by the parents reduce your eligibility to receive financial aid the most. Other assets such as retirement plans and some types of real estate may have no effect on financial aid at all.
The FAFSA looks at your previous years’ income (2017, in this case) as well as the value of your assets as of the day you fill out the form. If you are a possible candidate for need-based financial aid, consider repositioning assets as soon as possible and always prior to completing the FAFSA form. Doing so could increase your eligibility for need-based financial aid.
Even if you don’t believe you stand a chance at getting financial aid, fill out the form anyway. The FAFSA is often required for many types of financial aid including merit-based institutional scholarships as well as student loans.
4. Determine if your schools will have their own financial aid forms. Some schools claim to meet a family’s financial need 100%. That’s welcome news for some families as it means the school may pick up a significant portion of the tab. However, they will want to know as much as possible about your financial situation before they make a commitment to your student.
Often these schools have their own financial aid forms known as the CSS Profile form. The CSS Profile form may look at assets other than just those that are listed on the FAFSA form. What’s more, they can view these assets differently. For example, the equity in your home is normally exempt on the FAFSA form, but it may not be at some private colleges or universities that use the CSS Profile form.
When it comes to the CSS Profile form and how schools dole out their scholarship dollars, every school is different. If your schools ask for the CSS Profile form, ask them how they use this information and what types of assets affect your financial aid eligibility at their school.
For a list of schools that use the CSS Profile form, click here.
5. Submit the FAFSA form by October 1 (or as soon as possible thereafter). One reason why you need a short list of preferred colleges is that the FAFSA form (the Free Application for Federal Student Aid) can be submitted as soon as October 1 of your student’s senior year of high school. When you complete this form it asks which schools should receive your FAFSA information.
In fact, completing the FAFSA is a requirement for many scholarships, student loans and other financial aid opportunities – even if you don’t qualify for financial need. Not having a list of schools is one reason families delay the FAFSA form. Unfortunately, delaying the FAFSA form can also reduce your chances for receiving both need-based as well as merit-based financial aid.
6. Get real on costs. The University of MN Twin Cities now lists a total cost of attendance (room, board, tuition, fees, etc.) of over $27,000. Out of state universities and private schools can be double that amount or more.
In addition to the sticker price you will have to take into consideration any scholarships or other financial aid you may qualify for. The net price your family can expect to pay is often much lower than the price listed on the school’s website.
To determine the net price for the schools you are considering, look up the Net Price Calculator at each school’s website. This useful tool will help you figure out how much you and your student may be expected to pay to attend a particular school. It takes into consideration financial assets, income, grades and ACT/SAT scores and other information to calculate a “net price” that is unique to you and your family.
You may have to use the website’s tool bar to find this information, but knowing how much you will be expected to pay is key to finding schools that are a good financial fit for your student. The last thing you want is to find out next spring that your dream school is going to cost you $50,000 a year that you don’t have.
By the end of October, know the total cost of attendance and your net price at each of the schools on your list.
7. Estimate your Expected Family Contribution or EFC. Your EFC is the amount of money that the Department of Education believes you can afford to pay for your student’s college education. Your EFC will get updated each year, but it stays consistent at each school. For example, if your EFC is $20,000 at the University of MN, it will also be $20,000 at Bethel University, M.I.T, Normandale Community College and every other school on your list.
Your financial need, however, will vary at each school. Financial need is the difference between Total Cost of Attendance and your Expected Family Contribution or EFC. It is your financial need that determines what type and how much financial aid you may qualify for.
To estimate your EFC you will need to know basic information regarding your income and assets, as well as your student’s income and assets. Since the FAFSA is based on last year’s income and today’s asset values you will need your 2017 tax return and current statements from any investment or bank accounts owned by you and/or your student.
Once you have your financial information pulled together, you can calculate an estimate of your EFC at the College Board website. Do this before you fill out the FAFSA form. One benefit of calculating the EFC now is that you can experiment with your numbers to see if you can decrease your EFC by repositioning or spending down assets. For example, if you hope to maximize your eligibility to receive more need-based financial aid, you may want to reposition assets and consider other strategies to decrease your EFC, thereby increasing your financial need and possibly your financial aid award.
8. Invest in ACT or SAT prep. Students with higher than average ACT or SAT scores are good candidates for merit-based scholarships. These scholarships are offered to students without regard to their financial need.
The higher the score, the bigger the scholarship award may be. Adding just a point or two to your score could increase your award by thousands of dollars per year and make your student eligible for additional scholarship opportunities.
When you go online to research the schools for your Top Ten list, look for information regarding merit-based financial aid. Frequently schools will list a range of awards based on academic merit, things like grades, class rank and ACT or SAT scores. There you will see what a difference it can make to have the best score possible.
If you would like to take a deeper dive into how much of a difference these scores make, read this post by one of the country’s top experts on paying for college.
9. Have “the talk”. Before you choose a college you all interested parties (Mom, Dad, the student, ex-spouses, possibly grandparents, etc.) should know what college will cost, who will pay for what and where will all this money come from.
Will the parents pay for everything? Nothing? How much should the student expect to take out in loans? Are there any savings earmarked for college? Will the student work while in school? What about the grandparents? Have they promised to chip in? How much?
There is so much to go over during the talk and it doesn’t have to be done at one sitting. Ideally this is an ongoing conversation that you have been having for a long time.
The 3 main financial questions you must answer before you make a final college selection are…
- How much will this college cost?
- Who is going to pay for what?
- Where will the money come from? (Cash flow, savings, loans, financial aid, etc.)
10. Become a smart consumer of a college education. When was the last time you spent $250,000? How about $100,000? $10,000? $1,000?
Odds are if you spent a big chunk of money recently, you did a lot of research before you made your purchase. College planning is no different.
Probably the surest way to pay less for college is to educate yourself and become a smart consumer of a college education before you make promises to your kids. To get started read this book, and this one, subscribe to this blog, and download this spreadsheet.
Don’t stop there. Attend my live college planning workshop, Pay less For College at your local high school. A list of schools, dates and times is found at the top of this page. Or you can just click here.
Pay less For College is a free, 90-minute live presentation that I do at local high schools in the Twin Cities. You do not have to be enrolled in the district to attend. This presentation helps parents of college bound high school students maximize their eligibility to receive financial aid, identify their best opportunities to receive financial aid, and find ways to pay less for their student’s college education.
To schedule Pay less For College at your school, please contact me at 651.379.3935.