Today’s episode is a discussion about “financial need” and the colleges that meet that for you. This term means different things to different people. To you, it may mean the total amount you will be responsible for in terms of college costs or expenses. To a college or university, financial need means the balance left after your EFC (expected family contribution) has been applied against the NET PRICE.
We call it – “THE GAP”.
Having a basic understanding of how colleges arrive at your need is critical. Here are the formulas that are important to note:
TUITION + ROOM/BOARD + FEES= NET PRICE
NET PRICE – EFC (Expected Family Contribution)= FINANCIAL NEED
The blog – College Greenlight – has a list of the college that I mention in this episode that meet financial need.
This is the second and final part of our series on The College Money Puzzle. In this episode, we focus on the fundamentals of financial aid and scholarships.
Mostly, this will give you the last two pieces of the puzzle to gain a thorough baseline understanding of all of the money factors with getting into and paying for college.
Financial aid can be awarded in the form of State Aid or Federal Aid. The most important first step is understanding that completing the FAFSA is the only way to find out if you qualify for any type of financial aid and even some institutional scholarships. Here are our best suggestions about money, financial aid and scholarships:
Complete the FAFSA entirely, correctly and timely (or early starting in October 2016).
Be consistent with your information from year to year. Your money situation may change for any number of reasons. If so, be honest and clear and provide supplemental documentation if necessary.
Find out if the school(s) you are interested in are also requiring you to complete the CSS PROFILE. This is an additional financial form which asks more specific questions about assets, investments and household income or resources.
The Common Application is a great way to say money by avoiding the additional application fees when applying to multiple schools. You pay one fee and apply up to about 10 schools at the same time (saves money) with only one or two essays to complete. Now high school juniors can create an account, save their data and update it when they are ready.
For Scholarships, start early and local. There are many private foundation, local clubs and organizations that offer scholarships. Search where you live first.
Have your student develop a close relationship with their guidance counselor who is often the gatekeeper in the high school when it comes to scholarships. They often recommend students for local scholarships for various reasons.
Check with your employer, especially if you work in corporate that may offer scholarship money to the community and to the children of their employees.
If you are not a member of a fraternal organization, I am sure you know someone who is. Minority Greek-letter organizations focus on education and offer scholarships to youth.
Do a general search on the internet by topic (Math, Biology, English, etc…). Use a major search engine to narrow down the focus.
Try not to disqualify your scholarship application by not filling it out completely, answer all of the questions.
Do not go over the word count. Have someone else review the essay.
Finally, commit to at least 1 hour each day or time on the weekend to search and complete scholarship applications. Act like it’s a PT JOB!
The College Money “PUZZLE” consists of four pieces – EFC (expected family contribution), Net Price Calculator, Financial Aid and Scholarships that when used “strategically” can help you figure out how to pay for college. This begins our two-part series to talk in depth about these pieces of the puzzle that are uniquely intertwined and interconnected. We will begin with Expected Family Contribution and Net Price Calculator.
According to this January 31, 2014 Forbes article by Tony Onink, you
can have a household income up to $425,000 and still qualify for some financial aid. It is just a matter of the number of dependents and type of school that you apply to, either public/private as well as two-year vs four-year college or university.
In this episode, we discuss why you should know your EFC (expected family contribution) and use the Net Price Calculator to find out the “true cost” of the college that you are looking at. Every college and university has some sort of calculator on their website, you just have to find it. They don’t really want you to know what it will cost. The “real cost” consists of tuition + room & board+ fees – EFC- Merit Aid/scholarships= balance or gap. This gap is what you have to be worried about.
Your EFC will usually not change from year to year. If you have more than one child in college, your EFC is split between the children. That is a good thing because you will likely receive more financial aid as a result. Stay tuned for Part 2 next week: Scholarships & Financial Aid.
Today’s episode is the final part of the series and looks closely at YOUR FAFSA Application. We take a closer look into the FAFSA application, whom would fill out each section, what types of questions to expect in each section and how to avoid common mistakes.
If you have not listed to the other 3 episodes in this series, they are listed below for your reference. We will continue in future episodes to talk about the FAFSA application and all of its’ complexity with additional guests and would love to hear YOUR FEEDBACK with completing this form online or by snail mail.
This episode is part two of the four part FAFSA Series: EFC & CSS. The EFC is the acronym for Expected Family Contribution. This is the minimum amount of money that colleges expect you (the parent or student) to pay toward college costs. Colleges use a formula to calculate the EFC for every student that is seeking need-based financial aid. You submit your FAFSA (Free Application for Federal Student Aid) which contains details about your income and assets, colleges use that information to determine your EFC and if you qualify for need-based federal aid (and some state aid as well).
The CSS Profile is an additional form that some colleges require along with the FAFSA to determine if you qualify for institutional aid. There are about 300 hundred colleges that require this form and consider themselves very selective. This form goes into greater detail about family assets, extended family assets, student assets etc…
We provide concrete examples of how to calculate financial need as well. That is result of taking the total cost of attendance (tuition, room & board, fees, expenses, travel), subtract your EFC (expected family contribution) and the sum is the students financial need.
$28,000 Total Cost of College A
$13, 500 is the EFC
$14, 500 is the students financial need
Most financial aid offices attempt to meet as much the students financial need (not your portion) as possible for those that they choose to admit into the school. There is often a gap at this point. The gap is the balance of the financial need that remains UNMET. The student would often consider taking out a student loan. Oftentimes, part of the financial aid package would contain subsidized or unsubsidized parent or student loans.
We are suggesting you supplement or replace the gap with SCHOLARSHIPS.