Do you know all you should about
your child’s college tuition?
The average cost of attending a private college has gone up over 50% over the last six years according to a recent College Board study. This is really no surprise because tuition increases have always outpaced inflation by at least two fold, and there is no end in sight. College officials have all kinds of explanations and justifications for the increase, but the only practical question for parents is: How will you pay the bill?
Most parents are aware of the financial aid process for possible help, but few understand it as thoroughly as they should. Consequently, misinformation and misconceptions prevent many parents from helping their student make the correct choice. They settle for a college or university because the college selection criteria is based on price, not what it actually could cost them. Many feel that they could afford a state school or a low cost public university. Yet if they qualify, a high price college or university could cost less then these schools. Hard to believe, but true!
When the financial aid forms are filled out, they are sent to a central processor who will come up with your Estimated Family Contribution. (EFC). This is the dollar amount that a national standardized formula determines that you could pay for college each year. However, let’s say
that your EFC is $15,000. It’s $15,000 whether the school costs $55,000 or $35,000. So when the school subtracts your EFC from it’s costs, your need is established at the school (i.e. Cost of School - EFC = Need). The school then determines how and if they are going to meet all or any part of that need. They will use state funds, federal funds, and their own funds to accomplish this. Consequently, a well endowed school, no matter how costly, can meet all of your needs more readily than a school that costs much less but is poorly endowed. Ironically, it could cost you more to go to the so called cheaper school than the more expensive school. Hard to believe, but true!
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Another major misconception, is that parents believe that they will not qualify for aid because they make too much money. These thoughts could be so wrong. Many schools will even show you the financial aid summary of the present freshman class and how those high-income parents received substantial financial aid packages.
The key to this whole process is to start early. The fall of the junior year would be ideal, but anytime prior to the spring of the junior year should give the parents enough time to do their homework. Fall is always a good because January of the junior year starts the income tax year that the schools are going to scrutinize. If anything has to be done to plan a more "favorable" financial profile for the parent to receive aid, this is the best time.
Of course the other part of the equation is not only to find a school that will not cost a lot, but also a school that will be compatible academically. A good rule of thumb is to have about 20 potential colleges in January of the junior year, 15 by spring, 10 by the end of the summer and 7 or 8 when it is time to apply in November of the senior year. This is another reason to start early to talk to a guidance counselor, to look at college resources like Barron’s and The Princeton Review and talk to a college financial aid specialist who could help tie everything together.
In summary, instead of experiencing a lot of tension and anxiety, the entire college selection process could, and should be a fun time for both the parent and student alike. It would really be a shame to have a student come home in the fall of the freshman year because he or she chose the wrong
school or even worse to stay four years and be miserable. Parents are always urging students to do their homework, now it is their turn to do the same.