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Financial Aid Reality Check (That Won’t Cost Your Checkbook)

Submitted by Jill Yoshikawa, Ed M, Partner of Creative Marbles Consultancy on November 8th, 2012

We’re hearing from parents of seniors, who’re looking through their check registers and not seeing $30,000 to $60,000 available for next year’s college expenses, nor in their savings or investments.   Actually, we’re hearing from parents of juniors, parents of sophomores, parents of freshmen and parents of pre-schoolers about the continued rise in costs and how to afford the expenses, especially with multiple children in the same family.

Okay, here’s what we suggest to help calm the panic, and then channel that energy strategically:

  • Think of paying for college as a multi-year endeavor.  Dividing the total over several years can give a more realistic understanding of the total amount needed to be raised per year–NOT ALL AT ONCE.    “Need-blind” admissions policies require that colleges admit students on the information in their application, NOT their ability to pay for college or potential financial need.
  • Students (and families) will REAPPLY EACH SCHOOL YEAR for financial aid.  If there’s a change in income or other financial circumstances, colleges will respond accordingly with financial aid.  Also, if there’s a change mid-school year in your family’s finances, call the college’s financial aid office for a revised financial aid award.
  • Politics does effect financial aid.  California’s Proposition 30 and last summer’s debates about raising the student loan interest rates are two recent examples.
  • Planning late is better than not planning at all, though the earlier you start the more opportunity to modify the plan.  The savings can help reduce the out-of-pocket costs of college.  There is no sure-fire way to avoid paying anything for college, just as there’s no sure fire way to avoid paying taxes.  (Even students who’s parents report little income and zero assets, end up borrowing loans that must be repaid later.)  College is an investment, of time and hard-earned dollars over years of effort.  Planning will help families be confident they’re making a valuable investment for their children’s future, as they’ll investigate the range of possibilities.
  • Review your monthly budget for cost-savings over time.  Tightening your belt slowly, over years, rather than months can free cash for investment (which can be used to reduce a family’s out-of-pocket expenses), as well as decrease the “pain” of scrimping during college years.
  • There’s lots of financial aid gimmicks for increasing a family’s supposed “financial need” through a lower Expected Family Contribution.  Since the Expected Family Contribution is set by a Federal formula, know that any seeming fraudulence will be the responsibility of the student and the family.  As my momma told me, “If its too good to be true, it probably is.

For more tips and advice about affording rising college costs, as well as finding value in a college through the selection process, feel free to contact us.    Our 35 years of collective experience as educators can help your family know the questions to ask and point out the next steps to take–and rest (more) easily at night.

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