I wish I could say that if you followed everything we suggest you would never have a problem paying for college – then we’d be a national hero! Though we can’t solve all the problems with college admissions and rising tuitions, there’s a good chance we can help you avoid some debt and anxiety over paying for college. Follow the 10 tips below for helping parents pay for college AND start early to become an educated consumer of higher ed.
Here’s some quick and dirty advice for helping parents pay for college……
1) As soon as possible, find out your EFC (Expected Family Contribution), as shocking as it may be.
2) At the start of high school, explain to your child that doing well academically in high school will help in many ways. Grades in each year of high school contribute equally towards creating their GPA. So, getting higher grades in 11th grade doesn’t override not such good grades in 9th. Best to give it their all from the beginning.
3) Although more colleges are going test-optional, a lot of schools (even test optional ones) still give merit scholarships based on test scores. So doing well on the PSAT, SAT, and ACT isn’t just for increasing their chances of admissions, it’s also for trying to get more merit money to put towards tuition.
4) Learn everything you can about financial aid – how the EFC is calculated, what year will be your FAFSA base year, possible strategies for shifting income, when to maximize retirement contributions and when not to, how much to put in a 529 plan in your name vs. a grandparent’s name, and more.
5) Research, research, research and target colleges that are more generous with need and merit aid BEFORE your student applies. There’s lots of data to help with this: % of financial need met, % of students receiving financial need, % of students without need receiving grants, avg grant size, and more.
6) Have a serious conversation about money and how much you can afford to pay towards college BEFORE your student starts the college search process.
7) Use each school’s net price calculator to see what your family’s net price will be for all the schools your student is interested in. College Abacus is a great site to use when comparing colleges net prices. At College Abacus you can enter your information once for several schools and the site accesses the net price calculators. It makes is much easier to get net price information and compare it across multiple schools.
8) Make sure your student applies to several “financial safety” schools, where you know you can afford the tuition based on the school’s net price calculator.
9) Stick to the idea that the only loans your student will take out are the Direct student loans from the government, which total $31,000 after four years of school. This should limit their debt to a manageable amount after they graduate.
10) As much as you’d like to be able to pay for more, DON’T co-sign on a student loan, DON’T take out a Parent Plus loan, DON’T take out a home equity loan, and DON’T touch your retirement savings.
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If you’ve read this far, consider taking our upcoming online course……
Michelle Kretzschmar of DIYCollegeRankings and I offer a 3 week course (once a week webinars) that will show you step by step the process for how to target schools for financial aid. This includes both need-based and merit-based aid. We’ll explain how understanding the financial aid process and different factors (such as college rankings, location, supply & demand) can affect your financial aid award.
We’ll also walk you through our specially designed tool to show you how to do your own personalized college search based on your specific needs and situation.
We think about this as a Moneyball approach to paying for college. If you want to figure out how to pay less for a quality college education, this class is for you.
Use the R2CSave50 coupon, you’ll save $50.