By Carol Stack, November guest blogger
The long Thanksgiving weekend will soon be upon us, a great time to tackle that big box of college brochures sitting at your house, just quietly waiting for attention. Also sitting in the corner of the room is one of the biggest college consideration issues of all — how much is this going to cost and how are we going to pay for it? You may not know it, but in the U.S., college financial aid policy demands that the primary responsibility for paying for college rests with the student and her family. Yes, you read that correctly — the primary responsibility for paying for college rests not with the government, or the college, or the money tree you wish you had in your backyard — but with the student and her family. This alone is a huge reason for you to know, as early in the process as possible, how much colleges will expect you to pay. Keeping your sanity is another good reason. With a few minutes of your time, you can get a head start understanding what college costs will be for you. And the best part of all — this process isn’t only for parents of high school seniors — whether your student is a 6th grader or a high schooler you can begin to understand and plan for college expenses.
My advice? Use this simple, 5 step process:
- Take a few minutes to educate yourself about the process of paying for college. A great place to start is by viewing the Paying for College videos.
- Before you talk with your student (I’ll call her Susie) about how much you can pay for college (unless that is an unlimited amount) — you need to know just what you can afford. Sit down with your spouse, partner or Quicken and take a good hard look at your budget. Determine how much you can contribute on a monthly basis (from your income) and on a semi-annual basis (from your assets) to help daughter Susie go to college. Multiply the monthly amount by 12, and the asset amount by 2. Add the two together and write this number down.
- Go to www.fafsa4caster.ed.gov, and complete the sample FAFSA to see how much money the needs analysis (the data and formula that the feds, state governments and colleges use) will expect as a contribution from you for your child’s education. It’s called the Estimated Family Contribution. Write this number down.
- Compare the two numbers. If they are dead on — great work. If not — review your budget to determine how you can meet your EFC. Club memberships to drop? A car payment to avoid by driving the old reliable for another year or two? Even giving up a daily $5 latte for a quick cup from the long ignored Mr. Coffee on your kitchen countertop can mean more than $1000 a year for college expenses.
- Now, make an appointment with Susie to talk about college costs. Sit down at the kitchen table, turn off the cell phones (all of them — yours and hers) and explain what your EFC is, how you’ll be able to meet that, and how college costs beyond that will need to be met by scholarship, grants, work study and limited amounts of student loans. Express your willingness to help Susie find a college that will offer her merit scholarships and other aid to make the investment in her education. Earlier this month I wrote a post about Net Price Calculators — give some of them a go.
Congratulations — you’ve begun the cost conscious college search!