An important conversation that needs to happen between college-bound students and their parents is about finances. And, the conversation needs to happen sooner, rather than later. Unfortunately, many new college students have arrived on college campuses throughout the country this fall with large balances and many do not know how they are going to pay for it. There could be many reasons for these unexpected large balances, but for many students, it is because they did not discuss finances before committing to a college.
The Free Application For Federal Student Aid (FAFSA) is something that students and parents are told to fill out. To be eligible for federal financial aid, students must submit the FAFSA. However, many colleges also require the FAFSA because it determines the Expected Family Contribution (EFC). A common misconception, however, is that financial aid will cover everything after the EFC. While there are some colleges that meet full need (everything after EFC), many do not.
As students start researching colleges, it is important to take cost into consideration. While it is amazing when students are admitted to any college, it can be quite disappointing to find out they cannot attend because financially it just will not work. Luckily, a few years ago, it became required for colleges to be a little more transparent about financial aid. Colleges do not have to publish their financial aid methodology, but prospective students can get a good idea of what their financial aid might look like if they are admitted to the institution. The net price calculator will calculate the estimated financial aid students will receive if they were to attend the college.
As students are researching colleges and building their college list, it is important for parents to play a part in this process as well. Students should still drive the search, but parents must be informed about the cost of the colleges their students are considering and be upfront about what the family can and cannot contribute towards the cost of college. While it may disappoint students when their families say they cannot afford a certain college, it is probably best they hear this information early before they apply versus a week before school is supposed to start.
Some tips for parents during their child’s college search process:
- Get to know your EFC. While students and families cannot fill out the FAFSA until January of the year they will attend college, they can get an idea about their EFC. Check out FAFSA4Caster to learn about your family’s EFC.
- Fill out the Net Price Calculators. As your child shows interest in a college, visit the institution’s net price calculator. Get an idea of the financial aid your child might receive if they attend the college.
- Don’t dismiss high price tag colleges. While private colleges might have high price tags, many students do not pay that price. Some students might even find out that a private college could be less expensive out-of-pocket than a public institution.
- Be honest with your child. It can be hard to disappoint your child, but you have to be honest with what you can afford.
- Be realistic about loans. Student loans are common and should not be discounted when considering paying for college. However, parents need to educate their children about loans and loan amounts that are manageable. Remember, college will be at least four years and the amount owed will probably be the same (or more) every year.
- Encourage your child to apply for scholarships. There are no guarantees students will win outside scholarships. However, millions of dollars in outside scholarships are awarded every year. Winning a scholarship could help pay for college.