Paying for College (When you haven’t saved enough) – Steve Cohen – Admissions – Forbes

Paying for College (When you haven’t saved enough) – Steve Cohen – Admissions – Forbes

Financial Aid is Available

It absolutely helps to befriend a live person in the financial aid office early in the process.

The Relationship Between Admissions and Financial Aid

Admission decision is completely separate from the family’s ability to pay for it — the process is known as need-blind admissions.  Look for that phrase on the college’s admissions web page.  Every school is candid about its process.  If a school is not need-blind – wealthier schools typically are – asking for financial aid can have a small negative impact on a kid’s chances of admission.

“Expected Family Contribution”

Let’s say you earn $150,000 and have $150,000 in non-real estate assets.  Your expected family contribution will be $19,500 per year/child for private college; and $25,400 per year/per child for public universities.

Colleges “Meet the Need”

Read on a college’s website – that the school tries to meet all demonstrated need.  Or you’ll see a statistic about the percentage of need met.

The Financial Aid “Package”

The financial aid package is typically comprised of three things: scholarships (or grants;) loans; and work study.  Work-study is typically less than 10% of the overall tuition charge, and involves Sam taking a campus job – in the dining room, the library, etc.

Merit scholarships – to attract academically-talented kids to their campus

Scholarships are outright grants and do not have to be repaid. It is essentially a discount off the college’s list price.

The loans come in a variety of forms and sources, with many emanating from the Federal government.  Stafford, Perkins, subsidized, unsubsidized.

The Process

There are four basic steps:

  1. Tell each college you want to apply for financial aid.  Typically the admissions application has a box to check off.
  2. Submit whatever college-specific forms the school demands.
  3. Complete the on government’s online FAFSA form.
  4. Complete the College Board’s CSS Profile forms.  (Most private colleges require this special application to be eligible for financial aid from that school.)  One submission to the College Board covers multiple colleges; but a separate fee has to be paid for each.

Your kid has to complete her own FAFSA; you will have to get multiple passwords and PIN numbers; and you’ll be navigating through several look-alike, non-communicating government websites.   And make sure you have every tax document you submitted last year when you complete the forms.

Meeting the Expected Family Contribution: Parent Loans

Parent Plus loans are government-backed, moderate-interest rate loans that are made to the parents while Sam is in college.  They don’t have to be repaid while she is in college.

Private Counselors

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