Do’s and Don’ts When Paying For College

Back to school specials are about to take over our shopping experiences once again, but for many high school students, this is also the time to start shopping for college. It takes more than clipping out a coupon to make sure you get a good deal. To many, it can seem so intimidating that many families miss out on the money that is available to them. Here are a few tips to get you started in the right direction:

1. Do aim for your child to be in the top 25% of their class – It’s a filter used by many grants and institutions and there is a lot more money up for grabs if a student can make the 25% mark. Good grades is something that every student is told from the beginning, but the truth is that where they land in their class matters – it is the difference between saving money and spending money on tuition.

2. Do take both the SAT and the ACT – They may both be qualifying exams, but their styles vary so greatly that it is common to excel at one and do poorly on the other. Don’t assume you know which one will fit your child better; have them take both and find out for sure. I once was advising a student who had only taken the SAT because he didn’t feel the ACT was a good fit for him. After convincing him to take both, he was surprised by the standout ACT score he received and it opened up more scholarship opportunities that otherwise would have been closed to him. Keep in mind that a student can take the SAT and ACT as many times as they like. It is only the highest scores that count.

3. Do consult with someone who understands how “Expected Family Contribution” is calculated – To determine federal student aid, they will look at the Cost of Attendance (COA), less your Expected Family Contribution (EFC), to determine your need. You don’t have much control over the COA because it is driven by the costs of each particular institution. The EFC however, is based on the information you provide, and more importantly, how you present it. Technically it is the sum of the parents’ income and assets and the student’s income and assets. Just like a tax advisor can show you different strategies for lowering your taxes, someone familiar with EFC calculations can show youstrategies to present a lower contribution amount. That means a greater need, and makes you eligible to receive more financial assistance.

4. Don’t wait until your taxes are done – Yes, the FAFSA, Profile, and other grant/loan applications will ask for tax information, but you are allowed – and encouraged – to enter an estimate that you can update at a later time. Use an estimate and get those forms submitted! Federal Aid is distributed on a first come, first served basis. Trying to get all your ducks in a row before hand will only limit how much money is left for you when you finally
decide to act.

5. Do negotiate offers – I once had a family tell me they had received an offer from one school, and another offer of more money from another one. My advice? Play them off one another. The recruiter’s job is to get your child to go to their school, while giving them the least amount of money they can. Oftentimes they have the power to adjust that number if it means keeping the student, so don’t just assume that their first offer is also their final. Negotiate. As a side note, this is also a main reason I encourage people to apply to at least two or three schools at the same level. Your child will likely get into at least two of them and then they can use it as leverage for negotiation.

Shopping for college can be a big undertaking but there is no need for it to be overwhelming. Starting now will give you and your child the tools and time that you need to scout out the best offers and receive the most aid. With just a little work, you’ll find the deals are out there.