Stuck in the Middle: How to Manage Financial Aid “No Man’s Land”

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Stuck in the Middle: How to Manage Financial Aid “No Man’s Land”

Published July 10, 2020 | Last Updated September 10th, 2023 at 10:53 am

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Some folks find themselves in college’s “golden land” – they have plenty of financial assets to send their child to school.

Other families are on the other extreme – with very low income and assets, they will receive a lot of need-based aid.

But what if you’re in the middle?

If you are a middle-class family from a generally well-off area of the country, but you’re not wealthy, it’s likely your Expected Family Contribution (EFC) will be higher than you expect.

You may also be outside the range of need-based aid. In addition, you probably have a lot of responsibilities that make it hard to find extra money to pay for college expenses.

In general, these families – which constitute a large percentage of America – struggle to pay for college.

They often find themselves facing gaps between what they can afford and the cost of college.

If you’ve ever wondered, “Who are these people?’ read this impassioned post from Cyndi F., a real parent in our Paying For College 101 Facebook group:

“I am seriously struggling…how do these kids pay for these schools if they have to do it in their own? I struggle to understand where the average person gets this $ if their parents aren’t paying, or doesn’t have the credit to pay/loan?

If you have a student who has decent grades, gets 15,000 in merit, and receives the 5,500 in federal loans, where does the rest of the money come from when these universities are charging $30-70,000!! They aren’t 18 yet, or just 18 and can’t just take out loans themselves?

Am I missing something?

How does this work?

Please help.”

This parent and so many others who are in “no man’s land,” need a solid strategy.

How Do Middle-Class Families Afford College?

There are some things a middle-class family can do to hopefully lessen the sting of paying for college.

A lot of that includes proper planning and research. And having those “money talks” with your kids can help as well.

Here are some suggestions…

Determine Your Budget

Before your child begins to apply for schools, decide what your budget is for college.

Money You Have Available

Start by looking at how much money you have saved, including college savings by you and other relatives. Are there 529 accounts? Investments meant to fund school? Do you have non-retirement savings that can help pay for college? Also – how much can your student save between now and when school starts?

Next, look at how much you have in your monthly budget that could go for college expenses. Do you get an annual bonus that you could use for college needs? Don’t forget to estimate how much your child might earn working during the summers. They can also work part-time during school, but you may want to leave space for a work-study that will help pay tuition.

It can also be helpful to learn from parents who have gone before you. One parent in our Paying for College 101 Facebook group said this:

“Here’s what we did— if you have a 529 or any other college account split the $$ in there by 4 or 5 years depending on your student’s plan. Assume you may get zero financial aid (if you do, great). Assume you can take the $5500 loan.

“Add $5500 loan and one year if the split 529/savings account (if you have it)— add together. Then figure out what if anything you can do out of pocket. Add that in there. Then start looking for schools where you can get merit money to cover the gap amount.

“I know kids that got $5k merit money at a $22k school and I know kids who got $25k merit from a $60k school. It’s all relative. We did up an excel spreadsheet for the three schools my son applied to and was accepted to. Several of the columns in it dealt with money. Another thing to consider is school costs going up! Son decided to go to the least expensive school, had a fifth year add on master program, had a price lock-in for five years and gave him merit money.”

Figure Out How Much You’re Expected to Pay

Use College Board’s EFC Calculator to find out what your Expected Family Contribution (EFC) is likely to be. It may cause some sticker shock.

Many families that are stuck in the middle have a relatively high EFC and may not qualify for anything other than federal student loans and work-study.

Finally, use the Net Price Calculators (NPC) on target schools to determine the real costs of attendance. Compare that to your savings and income. You can also decide how much debt your family is comfortable with to close the gap.

From there, you’ll have a realistic idea whether you can afford a school. Create a short list based on this information, and let your child know that these are the schools they can choose from.

One family in our Paying For College 101 Facebook group approached their student this way:

For us our daughter could apply to schools where our net price should be $x and under. Everyone has a different $x they are willing to spend.

I ran net price calculators on the weekend like a crazy person & kept the info on a sheet. This gave our daughter an idea of where the schools she was interested in fell.

Is FAFSA a Waste of Time?

Even if the NPCs say that you won’t receive aid, don’t skip the FAFSA. You never know what the actual financial award letter will hold.

In addition, some schools won’t offer merit aid unless they see the FAFSA. I know, that’s odd, but it’s true. You also gain access to unsubsidized student loans through the FAFSA, which have a lower interest rate than most private loans.

Set Your Student Up for Merit Aid

The next step is to set your student up for as much merit aid as possible. What’s their GPA? How does their SAT or ACT look?  Both of these numbers are crucial when it comes to standing out.

From there, think about your student from the college’s perspective. What is interesting or unique about him or her? Are there unique talents? An unusual major?

Are they a female going into a male-dominated program? Do they have leadership experience?

Compile all of this information and keep it handy. It will be useful as you focus on finding colleges that offer the most merit aid.

Finally, consider focusing applications on schools where your student would be in the top tier of the freshman class.

Many high-performing students are tempted to turn up their nose at a less-competitive school, but that’s exactly where the most merit is likely to be.

Consider Your Student’s Non-Negotiables

Many students will have specific things they are looking for as they search for a college. The most important of these is the college major.

You want to choose a school that’s as strong as possible in your student’s chosen major.

After that, your child may have strong feelings about school size, location, or available activities. Some students simply don’t do well at large schools, while others would struggle in a small setting.

Make sure these elements are considered during the application process.

Keep your communication with your student strong. You can also help them understand the college application process and why there are limits on what school options they have.

Be careful during this part of the process – you only want your child to eliminate schools based on true must-haves.

Preferences matter, but they should be considered last.

College visits to your short list of schools can help your student sort out whether they feel comfortable with a particular campus.

If they want to attend school far away, make sure to factor travel costs into your college budget.

Find the Right College

At this point, you’ve done a lot of work and you haven’t even selected any colleges for your student to apply to. However, that’s great – it means that the colleges your family focuses on will be the right ones.

Focus on schools that offer merit scholarships and where your student’s GPA and test scores are in the top 25th percentile. This will make him/her very attractive, academically, to those schools.

Our R2C Insights tool can help you filter schools to create a list of schools where your student’s stats are in the top quartile.

Once you have that list, you’ll need to focus on the percent of students, not receiving needs based aid, who are awarded merit scholarships. In addition, you should look at the average merit award amount.

In our R2C Insights tool you can sort the schools based on both these values to find colleges that offer a large percent of students merit scholarships and the average amount is also high.

Once you and your student narrow their list to a reasonable size, then it’s time to work on applying. As parents in our group pointed out, the earlier a student applies (as long as its not early decision), the better the chances of receiving merit scholarships. Money for merit is not unlimited and it may run out.

Making it Through No-Man’s Land

Being stuck in the middle financially is very frustrating. When it comes to paying for college, it seems the schools expect you to have far more extra cash laying around than is reasonable.

Still, you can make it through.

By focusing your college search on schools your family and student can afford, you’ve already taken a big step forward.

From there, find schools that are generous with merit aid and position your student to be attractive to them.

Finally, make sure your student is comfortable with the choice. Many times, once they get on campus, they realize they love it.

And, not having crushing debt after graduation is even more incredible!

Other Articles You Might Like:

How to Avoid Student Loans: How Parents Can Help

Are Interest-Free Student Loans Available?

College Countdown Gift Ideas for Parents of Seniors





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