Predicting the Cost of College: Each family can predict very closely what college will cost them.

Parents that have been through the college process know about the FAFSA. FAFSA stands for Free Application for Federal Student Aid. If you want funding for college, you will file the FAFSA. This is not something you sit down and do quickly. It is a complete financial statement and many of the figures are from the 1040. If you have a senior bound for college, either make arrangements to file your income tax in January or make a close estimate and get the FAFSA filed. Waiting too long can disqualify you from funding.

Deadlines

Each college has a financial aid deadline. Find out what each college lists for a deadline. DO NOT miss this deadline. Financial aid may be a disaster if you let this deadline lapse.

Need-Blind

The majority of colleges are need-blind. This means that they do not look at the financial needs of a student before they accept them as a student to the institution. Some schools are beginning to look at the financial needs of a student before they accept them. They may decide to not accept a student that would require large amounts of financial aid from their institution. You may ask a college if they are need-blind or look for this in the literature.

The EFC

When you file the FAFSA, the processed results come in the form of a Student Aid Report. At the top of the report are three little letters -- EFC followed by some numbers. You may not even notice these numbers but they are the most valuable piece of information on the SAR. EFC is the Expected Family Contribution. An EFC of 2000 means that the family will be expected to spend $2000 for college. EFC of 20000 means that the family will be expected to pay $20,000 for college.

Preview

If you are parents of a junior, you do not need to wait until your child is a senior to find out what college will probably cost you. Have financial information ready and go to www.act.org. On this site is a "calculator" that will give you a preview of your EFC. How accurate it is? If you are close to estimating your true income, it will be quite accurate.

The Fine Print

Do colleges have to honor the EFC? No, and that is where the college search gets sticky. Colleges vary greatly in how they honor the EFC. If a family has an EFC of $3000, they may receive offers from colleges ranging from $3500 to $10,000. The trick is to find a college that has what you want and that is generous. You don't select a college based on where a girlfriend is going, or where all the kids are going. You select a college based on what is in your best interests academically and financially.

The Goal

No one wants to pay three times more for college than they can afford. Do your homework. Investigage colleges. Find out how generous they have been in the past. Apply at schools more likely to be generous.

Mar 16, 2009 8:03 PM

MFallon :

When families plan for college, they face two problems regardless of their income. They can’t determine if they are eligible for any of the $144 billion in available student aid, AND they have no idea about the out-of-pocket costs before their child starts applying to colleges.

Most families are eligible for at least one or more of the 8,000 student aid programs. But, they have no idea how student aid can impact their choice of college. Consequently, students and families today select a college without a good feel for how they are going to pay for it.

The Student Aid Planning Report from StudentAid.com is the first custom net-cost comparison service to help parents and students plan, select, and pay for college.

It provides insight not available elsewhere to allow parents to weigh college options when their child begins high school, instead of waiting until the student is in 12th grade as most families do.

The Student Aid Planning Report is personalized specifically to a family’s economic circumstances and a student’s college choices. This service identifies on a college-by-college basis the amount of federal and state aid a student is eligible to receive and a family’s out-of-pocket costs, and then provides a clear, side-by-side summary of how to pay the cost of attendance even down to calculating a student’s expected student loan repayments on a monthly basis after graduation.

It also provides critical information about a student’s top 10 colleges under consideration such as graduation rates and cost of room and board and books etc. to help inform their decision.

This new service for the first time gives early insight into the true net cost of college. It enables families to make informed decisions about one of the largest financial decisions they will make in their lives. This service lets us predict future college costs with a high degree of precision for families who want to start comparing college costs early – even when their child is a high school freshman.

Predicting the Cost of College

Each family can predict very closely what college will cost them.