How to Afford College – Everything You Need to Know

Raising Teens Today is honored to partner with CollegeVine on this post. The team at CollegeVine offers college-bound students and their parents a college roadmap as well as valuable mentorship services to help students achieve their college goals. 

College financing can be daunting—it’s one of the top three most expensive purchases that a typical parent will make in their lifetime. Luckily, financial aid eases that burden significantly for most families. Understanding the basics of the application process will help you approach this major purchase with calm confidence. Also, knowing your way around the financial aid system can help lower the cost of sending your child to college.

Here are three steps that will help you become masters of financing college:

#1. Learn the Lingo for Financial Aid Applications

The price tag for attending a four-year college or university can be as high as $300K. With financial aid available at the federal, state, and school-level, not all families will be responsible for covering the full cost of attendance. To determine how much a family will be asked to pay for a child’s education, these terms come up during the financial aid application process.

CSS Profile

The federal government is not the only source of financial aid. Many universities also offer aid to students based on their demographics and financial situation. Families may fill out the College Board’s financial aid application, called the CSS Profile, to apply for school-based financial aid.

FAFSA

The FAFSA is the Free Application for Federal Student Aid. Starting on October 1st of each year, families may submit financial documents to the government using this application. The federal government uses this application to determine how much federal aid the student is entitled to receive. Your child must renew the application each year.

EFC

Both the FAFSA and CSS Profile calculate a figure called the Expected Family Contribution, otherwise known as EFC. This is the monetary value that the federal government or specific university determines your child can pay based on family income and assets.

SAR

Once you complete the FAFSA, you will receive a Student Aid Report (SAR) that summarizes the information you submitted on the FAFSA. This document will give you a rough sense of what your EFC is going to be.

#2. What Types of Funding Options Are Available?

Most financial aid packages use multiple sources of finances to cover the cost of college. Once your child receives their offer, make sure you understand all the pieces that come together to create their financial aid package.

Need-Based Aid is given to students whose EFC does not cover the full cost of attending college. This aid is given on a sliding scale, with more money going to students who are less able to pay to attend college. Need-based aid can come in the form of grants, scholarships, loans, and work-study programs.

Merit-Based Aid is given to college applicants who have academic profiles that are above average for the schools where they have applied. This aid is a school’s way of attracting more qualified applicants to attend and is granted regardless of the student’s financial situation. Merit-based aid can come in the form of grants and scholarships.

Grants provide money that the student never has to pay back. They can be from the school, state government, or federal government.

Loans allow students to temporarily use money that they have to pay back later, usually with interest. Federal loans usually have the best interest rates, but some banks offer loans with modest interest rates as well. Usually, to take out a loan, your child will need to have someone older with good credit to co-sign the loan. Later, if your child cannot pay the loan, the co-signer is responsible for paying.

Scholarships, like grants, offer the student money that never has to be paid back. Sometimes, scholarships also come with additional enrichment opportunities, such as enrollment in a mentorship program or a travel stipend for studying abroad. Both universities and third-party groups, such as Kiwanis, offer scholarships.

Work-Study Program allows students with a low EFC to take on well-paid part-time jobs on campus to earn money that they can contribute towards their tuition

#3. Let’s Bust Some Myths About Financial Aid

Myth: The total cost of attending college is one thing I can’t change.

Fact: Lots of families cut costs by changing their children’s academic plan or living arrangement.

Commuting saves money on room and board but trades part of the college experience. AP exam scores of 4 and 5, sometimes even 3, allow your child to earn college course credit and graduate earlier. Starting at a community college and transferring into a four-year program is another way to save on college tuition.

Myth: Once I receive my financial aid package, it’s set in stone.

Fact: You can negotiate both need-based and merit-based aid.

Yes, your need-based aid is set in stone unless your economic situation changes. If a family member loses a job, gets sick, or otherwise impacts the family’s economic situation, reach out to the school as soon as possible to explain your new extenuating circumstances.

Merit-based aid is often negotiable. These are dollars that schools set aside to attract highly qualified students to attend their school instead of one with a stronger reputation. If your child gets into two comparable schools but one is offering more merit aid, you can ask the other if it will match your other offer.

Myth: My child should apply to a lot of scholarships to ease the cost of attending.

Fact: Applying for independent scholarships is usually a waste of time.

The best source for scholarships is usually the school itself, not a third party. It is true that some independent scholarships offer major financial aid. However, any scholarship offering $5000 or more will garner thousands of applications. Students should consider applying to one or two but should know that their chances are slim.

We do NOT recommend applying for any scholarships under $5000 since those do very little to cover the cost of attending and usually require more work.

The truth is that raising your SAT score by 50 points will have far greater economic benefit than applying to independent scholarships since that number alone has a sizable impact on where you will be considered for merit-based aid.

CollegeVine Helps Students Maximize Their Financial Aid

At CollegeVine, we help families understand the true cost of college and how to pay for it. One way we do this is using our Finances tool, which focuses on helping you understand the true ROI of a college degree at different schools or majors. We estimate your child’s future income based on their desired major, as well as your child’s expected loan burden. Then, our software lets you know which schools are the best deal.

We also make the process easier with our Milestones tracker. With CollegeVine, you’ll never miss a school, scholarship, or financial aid deadline.

Most importantly, our applications consultants help students put their best foot forward in the admissions process. Learn more about how we guide students with college applications and financial aid.

For more tips on The Unspoken Rules of Financial Aid Applications, visit CollegeVine’s blog. And good luck, wherever your journey takes you!

Author: Veronica Wickline

Veronica is an alumna of Harvard College, where she earned her A.B. in History and Classics. After graduating, she joined CollegeVine serving as the Curriculum Development Manager. She currently lives in Cambridge, MA and is writing her debut novel.