An article for families of rising high school juniors and seniors.

How to understand financial aid

What to do when you aren’t eligible for Financial Aid?

I just saved $300 on my car insurance!

Well, not really. I haven’t had that euphoric feeling recently, but I know there are some families who have been shouting for joy in recent weeks, due to the fact that they understood the financial aid process at the higher education institutions in the United States, BEFORE their student was applying.

Their excitement doesn’t come from a savings of ”$300″ but rather from a number that could be closer to $100,000!

Yes, you read that right.

Families that have students heading off to college this coming fall, which prepared a GAMEPlan for their college search, are finding success and happiness in knowing that over the next four years, they will have a financially sound ability to continue to live within their financial parameters. A financial plan that they chose for themselves. Not what the schools have imposed upon them.

High School Juniors (soon to be seniors) – Know this… your “base year” for financial aid began five months ago. You are smack in the middle of what the colleges will see when you apply for financial aid in January 2011. Take advantage of this knowledge and prepare yourselves and your families for the inevitable “sticker shock” that will occur when the acceptance letters and financial aid awards start pouring in next spring.

NOW is the time to start planning for YOUR college success plan. It is important to consider the Money Factor, competitiveness of the Admission process, and the Family Priorities when putting together your college search GAME Plan.

Other material to read: Financial Aid 101: How to Get More.

While this article contains some good information on both short and long-term strategies for saving and paying for college, the underlying point that needs to be repeated over and over is that waiting to figure out how to pay for college AFTER your student has been accepted is WAY TOO LATE! Get yourself prepared and educated on the process when your high school student is finishing up sophomore year! By the time your student is a junior, you’re already “IN” the financial aid “base year.” You’ll thank yourself later!

Where do I go from here?

A story in KJRH, Tulsa, by Leanna Landsmann recounts just such a tale, in which a reader recounts that her daughter “doesn’t want to go to the colleges she applied to for regular decision” – “She has her heart set on her first choice (early decision).”

Ms. Landsmann provides solid information and advice, and we will take it a step further.

Mitigate this situation with a viable college search plan …

Avoid Unnecessary Pain … Keep an Open Mind

Beware of the strategic difference between being single minded versus tough-minded. Everyone admires the latter. Healthy persistence can achieve many worthwhile goals.

But being obsessively single-minded in the college search and selection process all too often results in self inflicted pain.

This usually occurs when parents or students fail to embrace a goal with a range of potentially successful outcomes. They ascribe abnormal value to a single college or university due to the school’s popularity or reputation for academics, athletics etc.

They allow themselves to obsess on the merits of only one institution due to legend, myth or, even, misinformation. Unfortunately early decision policies foster this mindset.

Students believe they will gain an admissions edge by showing a strong desire to attend early in the game. They also see early decision as a way to bring the whole process to an end. It is indeed very tempting.

Admittedly, if counseled, they will prepare additional applications, but they are just “phantom apps”, because in their hearts they have no intention of attending anywhere but their first choice.

Worse yet, competitive reality is usually ignored.

Any analysis of a college’s admission track record is usually unwanted or, at best, only tolerated during the early stages of the college search and application process.

Look beyond reputation

These applicants and, often, their most trusted advisors do not want to hear about potential obstacles.

Many simply want to know what they can do to guarantee the path to their “dream” college.

Some Hard College Admissions Facts

• Competition for admission in the freshman class at selective and highly selective colleges is grossly underestimated
• The opportunity for significant financial assistance from a “dream” college is grossly overestimated
• The radar screen of a student in the top 10% of their high school class and with 1400 on their SATs does not even sense that they could be only at the mid-range of the applicant pool at these schools

Sad but true …

After twenty years counseling families in public and private high schools as well as in an independent practice that has been active in over a dozen states, I can honestly say this set of circumstances is a real bummer…

It’s like a virus!

And the cruelest cut of all might be the assignment to the infamous waitlist.

It prolongs the agony for everyone with statistically little hope of a favorable change of status.

What Can We Do?

Parents, try to inoculate your family from it from the outset. Recognize that we are blessed in the United States with hundreds if not thousands of excellent post secondary colleges and universities, any one of which can provide a challenging and wholesome educational experience.

Some have even had the good fortune to rise to the surface in popular magazine rankings!

However with that popularity have come tens of thousands of applicants from the USA and all over the world with outrageously competitive credentials. Admissions personnel have an extremely tough set of decisions to make and some very capable students will be denied.

Some College Planning Elements To Help

• Parents, get involved in the college search process early (no later than Sophomore year)
• Approach this as a family team, with parents as coaches and cheerleaders
• Build your college search campaign with a solid foundation
• Assess your student’s competitive position with a thorough look at the available stats for your candidate colleges. This includes:

1. The number of applications
2. The percent of applicants admitted
3. The 25th percentile test scores and high school GPAs of last year’s admitted class tells a lot … not everything, but a lot
4. Include your top choice in your final list but find 4-6 quality alternatives that you evaluate and determine are a good fit
5. Then visit, apply and embrace them if the need occurs

In other sections of this blog, we explain how the college admissions process is largely data driven, certainly from the perspective of the colleges. We encourage students and their families to adopt a similar attitude, while understanding the high levels of emotions that are in play.

We cannot guarantee an emotion/stress free experience with the above approach, but it will give you a strong opportunity to avoid the heartache of the student in Ms. Landsmann’s story.

“If it weren’t for the last minute, I wouldn’t get anything done.”
~Author Unknown

The admissions applications are submitted! Now what? Wait until April 1st. to see if you were accepted?

Not quite. The second round of applications (for Student Financial Aid) begins now. And now is the time to submit your Free Application for Federal Student Aid (FAFSA).

The (In)Famous FAFSA

Typically, families are scrambling to gather their financial data for the 2009 tax year so that they can prepare the FAFSA for submission. While many of us would like to forget about the financial ups and downs of the last few years, colleges and universities are ready to use that information to the fullest extent of the law!

The FAFSA form for the 2010-2011 school year is now available online. It is with this form that students apply for need-based financial aid each and every year they plan to attend. Yes, EACH AND EVERY YEAR!

Procrastination Can Hurt You

“Procrastination is, hands down, our favorite form of self-sabotage.”
~Alyce P. Cornyn-Selby

I used to work in the financial aid office of a private university several years ago, and I cannot tell you how many shell shocked students I saw in the month of March, each and every year.

Why? They had simply forgotten to get their financial aid renewal forms in on time and then had to face some daunting money issues for the upcoming school year.

Many families end up waiting to file their financial aid applications forms until after their taxes are done.

Do Not Wait – Be An Early Bird!

In my experience, it is more important to get the forms (new or renewal) in on time, than to have them be filled out with completed tax information.

It is better to estimate the financial information based on the previous tax year (2008 in this case) and get the forms in on time, than it is to get all of the (2009) numbers verified before putting them on the forms.

Be Aware Of Your College’s Requirements

Also check with the schools you have applied to (or are enrolled at since the Financial Aid deadlines for new and returning students are usually different) to validate the deadlines and number and types of forms you need to file for consideration for financial aid.

Every school asks for the FAFSA (federal form required by all colleges) and several will ask that you file the CSS Profile (institutional form required by some colleges). Certain schools may even ask that their own institutional financial aid forms be completed.

The simple message is: Get your forms in ON TIME! Don’t be guilty of procrastination, or …

“A year from now you may wish you had started today.”
~Karen Lamb

Parents entering the college admissions process are prone to “Four Fatal Errors.”

They are:

1. Choosing a college before understanding their financial options

The myth of “Choose first, pay later” is just that, a myth.

Too many families get themselves in situations where financial offers from some highly visible colleges, make attending their student’s “Dream School” a financial nightmare. It’s imperative for families to learn what their financial options are.

Make sure you have a sound financial strategy in place before beginning the college search.

If you fail to plan, you plan to fail.

2. The delusion that billions of scholarships go unclaimed each year

This fiercely held belief is simply not true.

Many students spend hours needlessly searching for and applying for random scholarships.

However, once colleges find out that a student has an outside scholarship, it’s possible that the value of the scholarship could actually be deducted from the financial aid package, resulting in a zero net gain.

It’s best to check the policy on private scholarships and research specific campus-based scholarships at schools to which your student is applying. Those scholarships will actually reduce your total college costs.

The Arthur Holly Compton Scholarship at the College of Wooster is an example of this.

Also, academic merit scholarships, which many schools offer to strong, academically qualified students, can make a high tuition college affordable.

3. Suffering from “brand name paralysis”

Many students and their families suffer from the delusion that only highly visible (top U.S. News Ranked Colleges) offer the best educational opportunities.

Truth is, there is a staggering number of excellent colleges offering top-quality educations at a cost a family can manage.

The landscape has changed!

Colleges that were second and third tier schools when parents applied several years ago, are now first tier institutions.

What’s more important? A college’s name recognition or a school that is a great “fit “ for your child?

4. Grossly underestimating the work load/level of detail required

Many parents and students new to the college admissions process don’t believe their friends who tell them that it can be “overwhelming.”

In fact, college selection and admissions has become so complex that many families don’t start soon enough and end up having it be more stressful than necessary.

A thoughtful and deliberate undertaking starting at the beginning of a student’s junior year will make the process manageable and, hopefully, fun!

** This article was written by Howard Verman, Director of Strategies for College, and published in collaboration with Lauren Starkey of Examiner.com

We are responding to a recent article in the Nashua Telegraph, Mounting Tuitions Test Multi-children Families

A sad conclusion to be drawn from this story is that many families only consider the “sticker” price of colleges, a mistake that is often costly both in terms of finance and education.

The article brings up several essential issues. However, we feel that some clarifications would be helpful.

We see two areas where obvious preconceived notions limit a family’s goal of putting their children through college.

The first essential issue is that the parents probably do not even know what they can afford. The Estimated Family Contribution (EFC) – not mentioned in the article – is the figure all colleges use to determine financial aid eligibility. Much like buying a house, where you need to have a pre-approved mortgage in place in order to make an offer, families need to know what they can afford prior to embarking on the college search process. The EFC helps get them started. From there, a family can then figure out the more realistic “Workable Family Contribution.”

The second issue arises from a parent’s comment that they made a decision to not have to worry about paying for college. That is, the kids would have to take care of college funding themselves. It may not be that it is a God given right to go to college and that the parents should fund that dream. However, parents and students should know that colleges think differently.

When a student files for financial aid, the college’s expectation is that the parents will contribute to their student’s education. Whether a family decides to fund all or part of the funding of college, it is paramount that they know, or work with someone who does know, how to strategically approach the transaction. There is no reason a 21 year old college graduate needs to start out “in the hole” with thousands of dollars in debt, and/or leave the parents in a similar position.

An effectively planned college search puts the student and family in control of the process, and allows a range of options when it comes time to make a final college selection.

A competent counselor can explain that a high priced college may, in some cases, require less funding and less debt than a state university, but because of this misconception, students do not apply to schools they believe to be “out of their price range”, or they and their parents resign themselves to incurring significant debt.