“I make too much to qualify for financial aid, but not enough to pay full for college!”
“I can’t believe these colleges cost so much!”
“I don’t want to limit my child’s choice in college, we’ll figure it out”
These are a few quotes that I have heard over and over in my 20 years helping people navigate the college financial landscape. There is no question that college brings with it a life-changing price tag that creates the potential for long-term impact to parents trying to reach their goals or students as they absorb debt. But what if it didn’t have to be that way?
There are 6 different ways that people should fully investigate to try to make an impact on this expense. Take the time to determine which avenues are possibilities for you based on your financial situation and family goals.
- Planning, Budgeting and Communicating – One of the great myths of the financial aid process is that savings, including in a college savings plan such as a 529 plan, will negate your chances for financial aid. The impact is actually minimal. Saving early and right up until the first bill is due is a good idea. The alternative is costly debt.
As the student begins their college search, it is a smart time to establish a budget and communicate it to the student. Would you start your new drivers’ search for their first car at a high-end dealership and risk them falling in love? These colleges do amazing marketing and it is easy for a 17-year old to lose sight of the financial considerations. Having the conversation up front can help.
- Pursue Need-based Financial Aid – Depending on your financial situation AND the college that your student is pursuing, you may be able to access tens of thousands of dollars. The formula is complicated with different types of income and assets varying in how much they are weighted. Take the time to learn if you will qualify at your student’s target school and apply on time.
- Identify Merit Scholarships – One of the growing trends in college admissions is for colleges to discount the tuition to attract the students that will help meet their goals. Think if it as a targeted sale. Generally speaking, the higher a student’s grades and test scores, the more money the college will award. With the exception of the elite colleges, most will award scholarships over 4 years regardless of your financial situation. This is a great way to make a dent if need-based aid won’t get you to your budget.
- Perform an Effective College Search – A hidden cost of college is not finishing within four years. Transferring because you aren’t happy or changing majors may mean a fifth year which means additional tuition, room and board. By taking the time to understand what is important to you and how well your target colleges will be able to deliver can save you this hidden cost.
- Appeal for More Financial Aid – Colleges will consider extenuating circumstances such as job loss, medical expenses or unusual expenses for other family members. These often can’t be adequately conveyed on the financial aid applications but may be reviewed. Also, remember colleges are a business. Their first offer may not be their best, and it’s possible they could award more as they try to reach their enrollment goals.
- Be Thoughtful on How You Pay for College – When the bill comes there are alternatives for how to pay. There may be tax or financial aid implications from using certain savings or receiving help from a family member. If you are borrowing, lenders terms can vary greatly so you will want to shop around.
By taking the time to understand and pursue the possibilities, you may be able to ease the financial burden and open up the colleges that your student can attend.