College Planning

College Costs - Numbers that Might Surprise You

Your child has gone through 13 years of schooling, and your 17 or 18 year old is about to enroll in four more years of higher education. These are all comfortable, familiar numbers that capture an important rite of passage your family is about to experience.

But, does the number $50,000 per year for college expenses scare you? For many people, that figure is a frightening prospect. And there are others just as alarming:
•    Prices for New England colleges have risen 374 % in the last 25 years, while family income has only risen 127 %.
•    Twenty years ago, the average college graduate had $9,000 in loans, but today, that figure is in excess of $27,000.
•    Financial aid forms have 225 questions spanning three taxable years.

However, before you get too overwhelmed by those numbers, don’t despair. Consider these figures instead, which may surprise you – and inspire you.

•    Many families I work with are able to slice 25 percent off per year of their child’s college tuition bill. That could be as much as $10,000 to $12,000 per year.
•    Our clients routinely receive $15,000 to $40,000 in scholarship money each year. This is free money, which is, in effect, a financial windfall.
•    There is $46 billion in free scholarship money awarded each year by the US Department of Education  and colleges.
•    There is another $35 million in scholarship given out through private companies, foundations and civic groups.

So before you let the high cost of a college education muddle your mind and keep you up at night with worry, consider the many ways there are to capitalize on the help that is available to you and how you might secure that support to realize the dream of an affordable college education for your child.

Photo by Tracy O via Flickr.

Saving for College 101

In 2016, elite college tuition is projected to be $281,101 for four years. If that number doesn't shock your socks off, consider that you must save $1,737 per month at a 4 percent interest rate return to meet that tuition obligation.

That might be doable for some families, but for those who may tend to find a target of nearly $300,000 a struggle to meet, there's still hope. Of course, it's common sense that the longer you save, the more you'll have in the bank. That's true because you're saving money over a longer period of time, but it's also true because any interest you're earning has a chance to compound over time — giving you a bigger bang for your buck.

But what about those families who have already missed years of saving opportunity? Or the families who have saved routinely but haven't come close to their target, in spite of their best efforts? And what of the families whose savings strategy has been upended by unemployment, job loss or a medical crisis? How can they possibly catch up?

There is much research that can be done independently to find workable strategies for college financial planning, but sometimes the best course is the simplest one: to get the best teacher. If that's your choice, look for a professional who can offer a comprehensive service — someone who can analyze your financial status to determine your family contribution, knows how to reduce your expected contribution, is available to assist with complicated financial aid forms and can answer your questions knowledgeably and accurately.

Photo By California Cthulhu (Will Hart) via Flickr.

The ABCs of the FAFSA

FAFSA? What’s Thatsa? Yes, it may sound like the latest influenza, but, for the uninitiated, FAFSA is actually the acronym for the Free Application for Federal Student Aid, the official application used by all colleges to determine eligibility for federal aid.

It sounds scarier than it really is. FAFSA is the universal application used by American colleges and universities each year to gauge a family’s financial resources and their ability to contribute to a child’s college education. I say family because it is not only the parent’s income and assets that are reviewed, but also the child’s.

The FAFSA application can be completed online and submitted directly via the web for consideration for federal aid. There is a portion that asks for the student’s financial information and another section that surveys the parents’ financial information. To submit the FAFSA online does require a PIN (personal identification number) which can also be applied for online but takes several days to process.

The FAFSA website is user-friendly and the process of filling out the questionnaire can be as easy as A, B, C. The information can be saved online, which streamlines the process for the following year, particularly helpful since it’s an exercise that has to be done each year with up to date financial information. High school seniors have to submit their FAFSA application for regular decision by the end of January of the student’s senior year and those applying early decision should be submitting forms between November 1 and December 1 of the student’s senior year.

However, parents who feel confused or intimidated should try and find professional help since even though the website is designed to be easy to follow, mistakes can be literally costly.

Photo by joshuaheller via Flickr.

Searching for College Scholarships and the Pot of Gold

  


Your child has worked hard in school, prepared for his SATs, written his essay, done the college visits, narrowed his school search, but now the big question: how to pay for it? Scholarships are a welcomed answer because they are free and unlike a loan, don't require any obligation to pay them back.

But where are these elusive scholarships? And how to obtain them?

Fortunately, for the families of college-bound kids, there is a lot of help available no further than your computer keyboard. Log in and there at your fingertips are several websites that are virtual directories of thousands of scholarships, many of which go unclaimed because no one knows where to find them.

Take, for example, FastWeb, which claims that 50 million members have benefited by its services. According to FastWeb, 1 in 3 college-bound high school seniors use the website to search for $3.4 billion in possible scholarships. It's free, easy to navigate and there are sections devoted to high school students, college students, parents and educators.

Two other websites are the National Merit Scholarship Corporation, an independent nonprofit organization that offers Merit Scholarships  to the top scholars out of 1.5 million entrants, and the Scholarship Research Network Express,which offers a searchable database with 1,000 links to scholarships totalling $9,769,283,403.

So, college financing can get a whole lot easier if parents use the help available literally at their fingertips.

Photo by RambergMedialImages via Flickr.