Everything a Parent Wants to Know About Financial Aid,
but Is Too Overwhelmed to Ask
by Dr. Barbara Austin, PhD
Blog #3 in a series
The more money you make, the more difficult it is to pay for college using the institutional methodology, the PROFILE.
Why is this helpful to know?
Because one quick way to find a college where you can position your story so that you can have more financial ‘Need’ is to choose one that only uses the federal methodology (FAFSA) and not the institutional methodology (PROFILE) because you will be under less scrutiny.
Always keep in mind though–you don’t pay sticker price, you pay your EFC. And the PROFILE that select and/or pricey colleges use, often will give you a higher EFC than the FASFA because they count everything they can, including assessing your child at a higher rate than the FAFSA does (at 25% instead of FAFSA’S 20%).
These colleges are money machines, and, trust me, they have the man and woman power to go after every last dime, unless you have a strong financial story why they shouldn’t.
Remember, however, we are only talking about 250 colleges (www.collegeboard.org). The vast majority of private colleges in the U.S. use only the FASFA and, sometimes, their own financial aid application.
This brings up the second quick way to pay less for college: for many families, private colleges and universities are a better buy than public universities, even though on the surface public universities have a lower sticker price.
This is because:
–The more expensive a college, the more financial NEED you will qualify for so it will be easier to pay for;
–Private schools are not as impacted as public universities so you can actually get out in 4 years, instead of 5 or 6, which is the average of many public universities;
–Private colleges also have larger endowments and more scholarship money since they are not funded by the vicissitudes of tax dollars.
–Public schools, on other hand, cannot guarantee that they will pay for any “Unmet Need’ you might have (also called Gapping which we will get into later);
–Bottom line, public universities in every state in the nation have already given you a tuition discount because they cost less than private universities. But that doesn’t mean they are a good buy.
Two Quick Strategies for Reducing your EFC
Okay. I have given you two quick ideas about reducing the college sticker price–
1. If you can, focus on the colleges that only use the FASFA because there are more legal loopholes in it than the PROFILE, where rich private schools have the money to track down every loophole. And most often, do.
2. Besides the 250+ colleges who use the PROFILE and are filling up the loopholes with cement, there are 3000+ private colleges and universities that are a much better buy than public colleges because they have much more merit money and you will get through them in 4 years instead of 5 or 6. They also tend to guarantee that they will pay more of your ‘Unmet Need’ than public universities.
This is why it is so important that you understand down to your toes that you don’t ever pay sticker price for college, you pay your EFC.
Remember this means that even if Private College looks on the surface outrageously more expensive that Public U, it is not, because you will never pay sticker price. You will always pay your EFC.
This is why it is crucial that you know AHEAD OF TIME your EFC from FAFSA’s point of view and the PROFILE’s point of view (if you want to apply to any of those colleges) so that you can use some good strategies to reduce it.
Find Out Your EFC Right Now!
Now it’s time for you to find your EFC so that you can begin to lower it before your child goes to college or even if he/she are in college (your EFC is always based on the previous year; so if your child is a college freshman now, he/she will look at the year 2012 finances to calculate your EFC for paying your child’s sophomore year (2013). It is never too late to apply for financial aid now that you know you are eligible, depending on the sticker price of the college.
To calculate your EFC for the FASFA:
–Go to www.finaid.org and hit the link that says Calculators. Use the Quick estimator first. It is very easy and will give you an idea.
–Or, go to the FAFSA4CASTER at www.fafsa4caster.ed.gov which is the fed’s estimator.
To calculate your EFC for the PROFILE:
–Go to www.collegeboard.org and hit Paying for College. Go to the Net Price Calculator (www.studentnpc.collegeboard.org) and hit participating schools and pick one to estimate what you’d have to pay if you had to use the PROFILE in conjunction with the FAFSA (all 250+ participating schools use both forms).
This is your first step in never paying sticker price for the college of your dreams.
Stay tuned for blog # 4 “Don’t Go Breaking a Child’s Heart” which is a thumbnail sketch of the key ideas I have given you so far. Check out my website a www.college-quest.com. Leave a comment for me on this blog. Or, ask me a question by email. I can’t promise I will answer every one but I will carefully read them all. Thanks for listening!