Newbie Q about college costs

[Lori D.]

 

But I would not limit my kid to only colleges that we could "afford" because at some colleges there is an abundance of merit and need-based aid available.

 

Not filling out the FAFSA may close doors.

 

 

 

This is absolutely the info I just heard at the college financial aid session I went to. They said that (financially) there is no reason NOT to fill out the FAFSA.

 

For one thing, many colleges require the FAFSA as their form for awarding any type of aid -- including MERIT scholarships. So you will definitely shut yourself off from some free money offers by not doing the FAFSA.

 

For another thing, by working with someone who knows all the ins-and-outs of how the government looks at assets and earnings etc., you can sometimes drastically reduce your EFC number, which ups your perceived financial need, which ups your financial aid package -- which often includes increased scholarships and grants. And of course you don't have to take the loan portion, but can pay it out of funds you may already have set aside for that purpose. In this case, FAFSA works in your favor.

 

BEST of luck, Quill, in your college financial aid adventures! Warmest regards, Lori D.

[Jane in NC]

Not filling out the FAFSA in the first place is one possibility I have been considering. Then, Margaret in CO response about how her family's assets inhibited need-based aid spurred me into posting.

 

It should have been, from the outset, a separate post that started something like this:

"I'm considering avoiding the FAFSA altogether. Is this insane? Idiotic? Something that no one in their right mind ever does?"

 

I may start a thread like that if I get around to it.

 

Two things: I hope that you follow some of the links provided in this thread. They could help you understand how financial aid, including merit aid, works.

 

Secondly, FAFSA may be required before a school provides merit aid. "8" once mentioned how she did not fill out FAFSA because of their assets. Her son lost out on an engineering merit scholarship because of it. She said that is one mistake she is not going to repeat.

 

But again schools are different. Your daughter may attend a college that does not require FAFSA for merit aid. There are no broad brushes when we discuss the college admissions or funding process. That is why I would not dismiss something based on one person's experience.

[QueenCat]

 

 

How does this work in practical terms, though? How do you apply to colleges with no idea if you can go? How many colleges do you choose to apply for it you have no idea what the offerings in aid will be? Also, if we were talking strictly about grants, not loans, then - awesome. Let's see what you've got. But that's not what happens. Loans are not free money. They are debt.

 

If my child got an incredible merit scholarship, then sure, I would fill out the FAFSA. It's not the bother of a form that I want to avoid. It's the one-down position. "Look - here's all the money you can consider available for college." That's what I don't want. Those resource avenues are not sitting there just waiting to be spent on college. They are there for other reasons. If they were giving my kid a huge amount of money that practically pays her whole way, then sure - I'll fill out the form.

 

Ds' school does not award MERIT scholarships to students who dont fill out the Fafsa. The scholarship dept doesnt see the student's file until admisions has received all paperwork, including the fafsa.

[*LC]

Hi L.C.

You may already know all this and have tried it, but just hate to see your very bright and talented DD is such a financial crunch for college, so below are some ideas, FWIW! BEST of luck in your college journey! Warmly, Lori D.

 

Schools vary on how much of a percent of the cost of attendance they can offer -- some only offer about 50-60%, so right off the top you'll be paying more out of pocket, and receive less overall from the financial aid package. You might check into school profiles and see which can offer financial aid packages (loans grants scholarships) of 80%. Here is a step-by-step of how to find schools that meet 80% or more of financial need. Here's a list of the 62 "most generous" schools in meeting financial need. And, here's a list of schools that go the extra mile to make it financially possible to attend.

 

....

 

Small schools and lower-tier schools may very well offer your DD more scholarship monies, as her GPA and test scores would raise their statistics favorably. Check college profiles and see what the average ACT score is -- and then look for schools where her ACT score 35 would place her in the top 5-10% of students at that college. That makes her a "big fish in a small pond", which can be a very favorable financial proposition for your DD! I don't know the profile of the schools DD has applied to, but it's very possible that the average ACT score may be very high -- like 32, which means 35 is not statistically significant enough to be offering your DD significant merit aid. She would really have to stand out in *other* ways at such a school. Just something to consider!

 

.....

Another option -- but one to do under the guidance of a knowledgeable professional -- is to remove as many assets as possible from the student's name and your names to a family member not attending college, and submit changes to the FAFSA for a recalculated EFC, which would then give you a higher financial aid package, showing more need, which might result in DD being offered more merit aid. The HEFAR Group gives free college financial aid planning consultation, with the hope that you will remember them at a later time when you need other types of financial planning; they specialize in helping you find ways to lower your EFC. (In no way promoting them or work for them -- I just heard a financial aid session given by them, and found their info helpful and wanted to pass it on.)

 

 

Lori,

 

Thanks for all the great information. I appreciate it, because I am trying to understand the process. The good thing is this daughter isn't interested in either of these schools, so it is easy to share this financial info since no receiving any aid didn't change anything. No one is heartbroken or upset. We don't have any skin in the game, because she wasn't going to either one no matter what. She only wants to go to a particular OOS state school. She received nearly $20,000 merit scholarship there, but it will still cost more than a highly-ranked in-state school where she would pay no tuition. Luckily, she will qualify for in-state tuition at the OOS school after a year there, which with the scholarship will bring her total cost to under what the in-state would cost. So, she is good, no worries.

 

However, I have other kids coming behind her. So, if you don't mind I'm going to ask some questions to figure out what to do differently next time around.

 

You said, "Here is a step-by-step of how to find schools that meet 80% or more of financial need." Drexel didn't report information, but I was able to do this for the other school that gave her mainly loans as financial aid. That school is said to have 86 percent of financial need met with 75 percent scholarships and 25 percent loans. My daughter was offered a merit scholarship of $20,000, a grant, and loans equal to the total cost of attendance. So, would they be able to say they met 100 percent of her need since they offered loans? The loans were bit more than the scholarship/grant, so it definitely wasn't 75 percent scholarship and 25 percent loan. There average aid package is $30,000+, and she received higher than that if you count the loans,

 

Both of the schools are private schools. Neither is a LAC. One has nearly 20,000 students and the other has 2,000. The endowments look big to me. The average ACT scores are 25 and 27, so she is definitely above that. In looking for the averages, I found the acceted/waitlist/reject student breakdown and it looks like she would be the top or at the top for both schools. (Is each dot 1 student or a group of students?)

 

You said, "for a recalculated EFC, which would then give you a higher financial aid package, showing more need, which might result in DD being offered more merit aid." Her EFC is already 2 to 3 times less than what the schools want her to pay out of pocket or with loans. How much less would it need to be for need-based scolarships, 4x, 5x? Is there a magic EFC where scholarships are offerred?

 

Thanks again for all the great information. I am trying to figure out how to put it to work to do things differently next time around.

[*LC]

 

Just one data point for what it is worth (sharing this with permission)

I have a student this year who was accepted to Drexel along with seven other schools - a mix of private and out of state publics. Drexel was a last minute add on to his list because he was intrigued by the co-op and it was a free application. His merit package is a bit less than what you are describing making it the most expensive of the options he has to choose from. Not just the most expensive but radically more expensive than his other options. It was a very easy decision to take it off the list.

That goes to show...

1. With those targeted free applications Drexel is doing exactly the right thing to raise their ranking. They are getting high scoring kids to apply. That doesn't mean it is a good choice for merit aid.

2. It is really important to apply to enough schools. This student can drop Drexel off the list without a hesitation because he's got other options. His most affordable schools do not have the lowest sticker prices. They are schools that gave him the most money because they really wanted him. Had he just gone with sticker price he'd be looking at a totally different set of options at this point.

 

Thanks for sharing. It sounds like it may be the school rather than my kid's issue. Since she was never interested, it was just an experiment to see how other schools do things. She applied to five school, the same mix as your student. I'm pretty sure Drexel will be the most expensive here also, but we have not heard anything at all about money from the 3rd private school. I will let you know what happens.

Lessons learned:

1. Offering the largest merit aid award doesn't mean the most affordable school.

2. The family's EFC may have no relation to what the school expect the family to pay (I guess I knew this, but was still a bit surprised at how having a relatively low EFC (less than 1/2 or 1/3 of tuition alone to these private schools) had no impact at all on the scholarships offered.

 

Thanks again for the information.

[creekland]

 

Lessons learned:

1. Offering the largest merit aid award doesn't mean the most affordable school.

2. The family's EFC may have no relation to what the school expect the family to pay (I guess I knew this, but was still a bit surprised at how having a relatively low EFC (less than 1/2 or 1/3 of tuition alone to these private schools) had no impact at all on the scholarships offered.

 

Thanks again for the information.

 

 

Good lessons. IME it takes some digging to find schools that are likely to provide good aid as the vast majority gap students. Then it takes more than one application (one school) as nothing is really guaranteed. With my top stat guy the amount we were expected to pay varied by 26K per year and this was after searching for likely "good" schools. All schools we tried have loans, but the only ones my guys have taken have been the basic federal loans - none for us parents nor did we co-sign any. There are a few loan-free schools, but they are really tough to get accepted to AND they may recalculate need by their own formula, so it might not match the EFC. We did look at some, but my guy didn't particularly like them compared to where he is now (and oldest wouldn't have been able to get in).

 

Just being in the top 10% of students guarantees nothing. It can make decent aid more likely, but it guarantees nothing other than some schools with merit aid. (eg UAlabama guarantees free tuition with certain scores and GPA, but that did NOT make it the least expensive option for my high stat guy. They came in third for him.)

[Jane in NC]

Thanks for all the great information. I appreciate it, because I am trying to understand the process. The good thing is this daughter isn't interested in either of these schools, so it is easy to share this financial info since no receiving any aid didn't change anything. No one is heartbroken or upset. We don't have any skin in the game, because she wasn't going to either one no matter what. She only wants to go to a particular OOS state school. She received nearly $20,000 merit scholarship there, but it will still cost more than a highly-ranked in-state school where she would pay no tuition. Luckily, she will qualify for in-state tuition at the OOS school after a year there, which with the scholarship will bring her total cost to under what the in-state would cost. So, she is good, no worries.

 

For the newbies reading this thread, I would like to point out that this is not the norm. Once upon a time, students moved to another state, worked for a year to establish residency, and then applied to college there. Universities seem to be on the look out for this now and will not necessarily grant in state status. YMMV, of course.

 

Glad to hear that things are working out for your daughter, LC!

[Lori D.]

My daughter was offered a merit scholarship of $20,000, a grant, and loans equal to the total cost of attendance. So, would they be able to say they met 100 percent of her need since they offered loans? The loans were bit more than the scholarship/grant, so it definitely wasn't 75 percent scholarship and 25 percent loan. There average aid package is $30,000+, and she received higher than that if you count the loans...

 

You said, "for a recalculated EFC, which would then give you a higher financial aid package, showing more need, which might result in DD being offered more merit aid." Her EFC is already 2 to 3 times less than what the schools want her to pay out of pocket or with loans. How much less would it need to be for need-based scolarships, 4x, 5x? Is there a magic EFC where scholarships are offerred?

 

My understanding is:

1. Yes, based on those figures, the school is now meeting 100% of need with a financial aid package.

2. A financial aid package always consists of LOANS, grants and scholarships.

3. The lower the EFC, the more perceived need there is, so a larger financial aid package will be offered; it is HOPED that more of that package will be scholarships and grants due to the larger need, but there is no guarantee. (Just curious: where did the 75% = scholarship/25% = loan figure come from?)

4. No, I don't know of a "break point" for the EFC that causes the university to offer a full scholarship due to need.

 

So the good part is that your student is being offered free money! The bad part is that college costs have shot up so significantly in the past 8 years that there has been no balancing by donations, gov't funding or other revenue sources to keep up to be able to offer students equally large free merit or need aid. So, unfortunately, if the expectation is that ALL your financial need met with ONLY the free money by getting your EFC really low, then you will be disappointed. Loans ARE part of the package. Note: you don't have to accept the loans in order to accept the scholarships and grants.

 

 

At this point, what you want to do is compare the financial aid packages that have been offered to:

1. Compare costs and figure out which college ultimately costs more when the free money is subtracted.

 

2. Figure out which really are the best scholarships:

- are they renewable?

- can they be reinstated if your student flubs a semester?

- do the qualifications for keeping them get more difficult each year?

- do they allow the student to "stack" up and use other scholarships, too?

 

For full scholarships, in addition to the above questions:

- do they cover ONLY tuition, or fees as well?

- do they adjust with tuition hikes or are they a set amount?

 

3. Are there ways you can cut costs so you don't need so much of the loans:

- does DD have to live in a dorm/buy a meal plan, or can she live off-campus?

- since she'll be out of state, is there a relative or family friend she could live with, do a little housework in exchange for room and board?

- could your family invest in a house as a rental and have DD be the property manager and rent rooms to several other students and their rent would pay the monthly mortgage and utilities?

 

4. Sit down with DD and together figure out what she is getting her degree in, and what the average salary of the resulting job would be. Learn more about student loans. Figure out how much debt is reasonable for this job. Think of the debt as an investment for her future career; debt of $25,000 for 4 years of college would not be unreasonable to pay back. Debt of $100,000 would likely be back-breaking. Use a debt calculator to figure out what the monthly repayment will look like.

 

 

 

 

I am trying to figure out how to put it to work to do things differently next time around.

 

Actually, it sounds like you have done things very well! I think we ALL just have to be realistic and realize we are living in a very different economic time, and going to college is going to be an expensive choice. We just have to weight the pros and cons of ANY choice. And we have to be realistic; only 5% of all scholarship money comes from "outside" sources, so most of us will get the most $$ offers from the actual university/college being applied to.

 

For your future students, here are some ideas:

 

During high school:

 

1. Do lots of community service. Many scholarships are based on volunteer hours.

 

2. Get involved in extracurriculars that are well-recognized, esp. for leadership, and may even offer scholarships to students who participate (junior military cadet groups such as Civil Air Patrol; YMCA Youth & Government; national speech/debate groups; DECA (business); etc.).

 

3. Do dual enrollment at the community college and CLEP testing while in high school to knock out a lot of college credit in advance, possibly shaving off an entire year at the university. Bonus: some areas have free dual enrollment for high school students! (Note: use care, as not all universities/colleges accept all community college credits, or CLEP tests -- do some research in advance.)

 

4. Start applying for "outside" scholarships even in middle school. Stack up as many outside $$ as possible. ("Outside" money is NOT given by the specific university, usually from a community source.) Pick up lists of local scholarships at the guidance office at your local high school. Learn tips for how to win scholarships; practice those essays. NOTE: the outside scholarships can also be a detriment to getting "inside" scholarships directly from the university the student wants to attend; some "inside" scholarship awards go down as the student brings in "outside" money. And some "inside" scholarships cannot be combined with any other scholarship award.

 

 

Post high school options:

 

1. If you have a quality community college and it costs less than the universities/colleges, knock out the first 2 years of gen. ed. coursework there, transfer, and complete the 4-year degree at the university.

 

2. Upon high school graduation, go to a community college, get an AS or AAS (2-year degree), or a vocational school for a 6-month or 1-year certificate, start working at a skilled trade right away at a higher way, live at home, sock away every $$, and then go to the university after working/saving for a few years.

 

3. Are you a STEM student? Consider the SMART Scholarship -- your tuition is paid for by the Department of Defense, and upon graduation you go to work as a civilian engineer, researcher, etc. for the DoD.... Interested in medical occupations or the business field? Look for other work-reimbursement tuition-repayment options at local hospitals, or large corporations in your area.

 

4. Consider doing an all-distance-and-clepping college degree at home (like what College Plus supervises for you). Much cheaper, at about $7000 for a do-it-yourself Bachelor's degree, or about $12,000-13,000 through College Plus. Downside: it is a degree with no GPA, and may not be accepted by all future employers or post-graduate programs.

 

5. Go to a tuition-free university. (Note: be careful; some schools market themselves as tuition-free or low-tuition, but then charge exorbitant fees, which raises the cost of attendance back up with everyone else.)

 

6. Consider going abroad to school. For example, many Canadian schools cost a lot less. Bonus: great exposure to a different culture!

 

7. Military. It's much harder to get in these days, but for some students, this is a great way to earn money and benefits right away, learn skills and vocational work that may easily transfer to civilian work -- and also have the GI Bill option to pay for college upon completion of tour of duty.

 

8. Volunteer with AmeriCorps (like a domestic Peace Corps) full time for a year, they pay your room and board, you learn skills, and you come back to several thousand dollars for college tuition.

 

 

 

More ideas in this past thread: s/o Cautionary Tale/High College Costs -- a Brainstorm $$ Ideas Thread! BEST of luck! Warmly, Lori D.

[*LC]

Once upon a time, students moved to another state, worked for a year to establish residency, and then applied to college there. Universities seem to be on the look out for this now and will not necessarily grant in state status. YMMV, of course.

 

 

Jane is absolutely correct. This is how I went to school many years ago, and it (usually) isn't that easy anymore.

 

However, there are some schools that still allow this. In addition, there are schools that try to attract high-scoring out-of-state students by offering them in-state tuition if their scores are higher than X.

 

There are also agreements between states that allow one state's students to receive lower tuition at a partner state's schools. These programs seem to vary widely, some are open to anyone and others are open only to those in majors not offered in their home states. At http://www.nasfaa.org/students/State___Regional_College_Tuition_Discounts.aspx I found this information.

State & Regional College Tuition Discounts

 

Many states have programs that allow residents to attend university in another state, without having to pay out-of-state tuition. Check with your state, or with universities that you're interested in, about available tuition exchange or reciprocity programs, and ask about how to sign up. The FAFSA is not required for these programs, generally.

Some larger programs include:

Southern Region

• The Southern Regional Education Board Academic Common Market provides tuition discounts for more than 1900 academic programs in Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

• The Regional Contract Program enables students to pursue a professional health degree at out-of-state institutions, but pay in-state tuition at public institutions or reduced tuition at private institutions.

 

Midwestern Region

• Students from Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin may be eligible for tuition reductions at certain Midwest public and private schools through the Midwest Student Exchange.

 

Western Region

• The Western Interstate Commission for Higher Education offers the Western Undergraduate Exchange for students in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.

• The Western Regional Graduate Program enables residents to enroll in available graduate programs outside of their home state at resident tuition rates.

• The Professional Student Exchange Program enables students majoring in the health care professions to enroll in selected out-of-state professional programs.

 

New England

• The New England Regional Student Program enables New England residents to enroll at out-of-state New England public colleges and universities at a discount. Students are eligible when they enroll in an approved major that is not offered by the public colleges and universities in their home-state. More than 700 undergraduate and graduate degree programs are offered. Participating states are Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

 

[*LC]

My understanding is:

1. Yes, based on those figures, the school is now meeting 100% of need with a financial aid package.

2. A financial aid package always consists of LOANS, grants and scholarships.

3. The lower the EFC, the more perceived need there is, so a larger financial aid package will be offered; it is HOPED that more of that package will be scholarships and grants due to the larger need, but there is no guarantee. (Just curious: where did the 75% = scholarship/$25 = loan figure come from?)

4. No, I don't know of a "break point" for the EFC that causes the university to offer a full scholarship due to need.

 

So the good part is that your student is being offered free money! The bad part is that college costs have shot up so significantly in the past 8 years that there has been no balancing by donations, gov't funding or other revenue sources to keep up to be able to offer students equally large free merit or need aid. So, unfortunately, if the expectation is that ALL your financial need met with ONLY the free money by getting your EFC really low, then you will be disappointed. Loans ARE part of the package. Note: you don't have to accept the loans in order to accept the scholarships and grants.

...

 

Warmly, Lori D.

 

Lori,

 

Sometimes I look at things strangely, so I appreciate you taking the time to confirm that I was seeing it correctly.

 

We weren't looking for a full scholarship, but it was just surprising (a bit) that almost everything from this school was loans except the merit aid, which was awarded upon admission in the fall. It was even stranger after I looked at the websites you linked. The 75 scholarship/25 loan percentages came from the college board entry for this school. Looking at it now, my kid's award package is nothing like they listed as the average for the school. They say the average loan is less than $5,000, and my daughter was offered more than 5x that. It says the average need-based scholarship/grant is around $20,000, and my daughter was offered less than 1/10 of that. This is all with an EFC way less than the cost of the school remaining after her merit scholarship. On the other hand, she was awarded a merit award higher than that listed at the website.

 

...At this point, what you want to do is compare the financial aid packages that have been offered to:

1. Compare costs and figure out which college ultimately costs more when the free money is subtracted.

2. Figure out which really are the best scholarships:

3. Are there ways you can cut costs so you don't need so much of the loans:

4. Sit down with DD and together figure out what she is getting her degree in, and what the average salary of the resulting job would be. Learn more about student loans. Figure out how much debt is reasonable for this job.

...

Warmly, Lori D.

 

That is absolutely wonderful advice for everyone. Well, I could easily quote the rest of your email and say absolutely wonderful advice. I appreciate you taking the time to share your thoughts.

 

I think we ALL just have to be realistic and realize we are living in a very different economic time, and going to college is going to be an expensive choice.

Warmly, Lori D.

 

As things change, it may be the expected outcomes are changing also. They may even change differently for different schools.

 

At this point, it looks like my kid's least expensive option will be an OOS national university. I always heard flagship OOS schools were some of the most-expensive options. Actually, for my kid it will even be cheaper than the in-state school which would be tuition free. Yesterday, she received an additional scholarship offer from an OOS school. Her total scholarships there will pay for her complete tuition and some housing. It will also give her a few more thousand for living expenses or food. She has not received their financial aid package, but there isn't much more to offer.

 

Unfortunately, this isn't for the school she wants to attend. We are still awaiting their final package. However, in a strange turn of events, I spoke to someone today who works in fundraising for this university. (A mutual friend gave her my number as someone to talk to about something going on in her personal life.) After we talked about her situation for a long time, we talked about us affording the university and what scholarships my daughter had received. This lady said she thought we would be pleased with the financial aid package. She said the university knows they are competing with free rides for high-scoring OOS kids as many of the nearby states offer free tuition to keep their students in-state. It will be great if she is right.

 

Thanks again for all the wonderful advice; we will definitely put it to use.