Back in 2016, in a huge shift to make it easier to fill out financial aid forms and get financial aid decisions back from colleges earlier, yearly FAFSA forms became available on October 1st instead of January 1st.

In addition, families then had to use tax information from two years prior to when their student started college.

These changes allowed families the chance to get financial aid information earlier from colleges and in turn have earlier conversations with their student about where to attend and how much college will cost.

The changes made a difference, but, the real key to determining college affordability is to start doing research and having conversations much earlier than senior year.

Ideally families should begin the process of understanding college costs and financial aid at the start of high school.

Here are some tips for starting the process of understanding financial aid and how much college will cost your family…

Know Your Expected Family Contribution

Your EFC is the magic number the federal government generates when you fill out the FAFSA.

This is the key to knowing the amount you will be expected to contribute to your child’s education. The amount will probably seem unrealistically high to you (and it could conceivably be even higher), so it’s important to know early what you’ll be on the hook for so you can prepare.

[How FAFSA Calculates Your EFC]

If your income and assets don’t change from year to year, it’s easy to predict early with the College Board’s EFC calculator, which will also calculate your “institutional EFC” for private colleges. Use the federally generated EFC as a guideline, not the final word, because many colleges will charge you more than your EFC.

Your initial EFC will be based on tax return informationfrom two years prior to the year your child begins college. Essentially, the tax year ending with December of your student’s high school junior year, is the tax year information that will be used to determine your EFC and financial aid eligibility for when your child applies to college.

As you know these timelines, you’d be prudent to start understanding financial aid,

AT LEAST when you student is in 10th grade and starting 9th grade would be even better.

Learn more…

How is Your FAFSA EFC Calculated?

Understand How the FAFSA Is Used

It’s not just the federal government who uses the form for financial aid.

Many states, institutions, and scholarship programs use the FAFSA to determine financial aid eligibility for state and institutional awards, too.

Even if your student doesn’t qualify for a federal Pell grant or work-study at a public university, he may qualify for institutional aid and work-study at a private college as determined by the FAFSA.

Keep yourself on track with the financial aid process by knowing what you need to do and when…

Understand Need Versus Merit Aid

There are basically two types of financial aid for college: Need-based aid and Merit Aid, which translates into Merit Scholarships, and itis important to understand their differences.

Need-based aid is aid that is predicated on a EFC, which relies heavy on a family’s adjusted gross income.

Your family may qualify for need aid at a private college but not at a public university, or you may qualify for aid at both. Each college is different.

Merit-based aid is typically awarded for top academic performance, but also for less obvious attributes, such as leadership, community service, music, geographic diversity, and sports.

Colleges want to improve their reputation and national ranking, and one way to do that is to attract exceptional students.

Some colleges award automatic scholarships for a top GPA range.

Families of all income levels who have students who excel in academics, sports or the arts should look for merit scholarships.

Families whose income levels will not cover college costs should look at colleges that give good need-based aid.

Learn more:

Using Data To Find Merit Scholarships

Quick report to help you compare up to 3 schools on the important statistics you should be looking at for either need or merit-based aid.

How to Help Your Child Prepare for the ACT/SAT

Becoming familiar with the ACT or SAT is key to your child increasing his/her test scores and chances of acceptance to the college of their choice.

It also opens doors for scholarships and grant money. Test prep strategy plays a huge part in how well students do on college entrance exams.

Some kids are able to prep well on their own with sample tests and books, while others will do better taking a prep class.

Of course, we want our students to score well for the chance of increased college money, but keep in mind that too much pressure on a child to perform well can backfire with increased anxiety. Keep your own anxiety about money in check.

Learn more:

How to Plan Your Studying: SAT/ACT Prep Calendar

Map Out Financial Aid Deadlines

Begin looking at application deadlines in late summer or early fall to map them out on a calendar or spreadsheet, and check each college’s financial aid forms it requires.

Most colleges will only require the FAFSA, but if your child applies to a selective CSS Profile college either “early decision” or “early action” (offered by a few schools), additional financial aid forms will be due—all at different times.

Help your child make a calendar of deadlines, both applications and all financial aid forms. The fall of senior year is busy and it’s easy to miss things.

Learn About the Loan Process

When colleges return their financial aid letters to your student, it will likely include two types of federal loans, federal direct subsidized and unsubsidized loans.

Sometimes the loans are called Stafford Loans.

There’s also the Federal PLUS loan for parents and graduate students.

If you need to go into deep debt to send your child to college, it’s worth considering another college or another avenue altogether.

And, ifyou need more than what the federal loans offer, you’re veering into private loan territory. In that case, it’s worth reading up so you know what you’re getting into.

This article will tell you everything you need to know about private loans.Another possibility for financing college is ahome equity loan.

Learning all you can about the financial aid process and all the “characters” involved, and learning about them BEFORE you really need to make some decisions, will alleviate a lot of the stress when that time comes.

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