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Greetings,

As we head into the second week of AP exams, I am including a link to my recent client newsletter  LAST MINUTE TIPS- AP EXAMS. The newsletter provides links to grading rubrics for several AP exams.   Continued best wishes to all students for a strong finish to the school year!

Yes you can afford college!   

Little known facts….

As an experienced university faculty and admissions committee member, I’ll discuss how colleges determine your financial aid award and some tips to increase your chances of receiving financial aid and scholarships.

Need Blind Admissions

Nearly all colleges practice “need blind admissions” meaning admissions decisions are unrelated to your request to be considered for financial aid.
That said, university budgets and financial aid awards are built around “discounting” – a practice of offsetting a college’s annual financial aid budget with the dollars received from full paying students to minimize the impact on the institution’s endowment.   As a full-paying family, you may be surprised to know that as much as a quarter to a third of your tuition dollars are used to award financial aid to another student.

Where is the Money?

Universities more able to provide significant undergraduate grant money (as opposed to loans) have:
larger endowments, a higher percentage of alumni giving and significant numbers of full-pay students (often achieved by higher-than-average percentages of foreign students). All of these data are available for review.
While within-state public tuition is the least costly, public universities also have significantly less funding available for grants than do private colleges.

Matching Funding 

Universities have the discretion to consider competing financial aid offers for admitted students from recognized competitor institutions (selectivity, size, etc.).  By agreement, Ivy League universities will NOT match a financial aid offer. That said, Ivy League colleges have some of the largest endowments and greatest number of contributing alumni enabling the Ivy League to meet your financial need (see below).  Many private institutions do meet full financial need.
Based on actual research and client experiences, I maintain an extensive data base to match each student’s academic interests with colleges more likely to provide an attractive financial aid package.  Contact me to schedule an “Educational and College Admissions Assessment”.  Let’s talk about your college short list relative to your admissions portfolio and intended major areas of study.

How does all this impact your out-of-pocket costs?  

Where should your student apply to receive the most financial aid?

In order to realize your educational goals, it’s important to understand how your financial aid award is determined.
What is the real cost of a four-year undergraduate degree?  The short answer-Avoid sticker price misconceptions.   
The sticker price of a four-year private undergraduate education is approaching a quarter of a million dollars. Families are often misguided and too easily take private colleges off their radar opting for seemingly less pricey in-state public tuition.  While we don’t have enough time in a day to discuss why the cost of an undergraduate degree has reached the point where the sticker price now exceeds what most families set aside in their family budget for retirement savings or even their annual mortgage payments, I want to explain how your financial aid is actually determined to reduce confusion and keep your focus on educational goals.
Let’s start with the basics:
As noted, College Admissions is “need-blind”.  There is no adverse impact on admissions if you apply for financial aid. Likewise, you don’t increase your chances of admission being a full-pay student.
There are two types of financial aid awards:  Need Based and Merit based aid.  Assistance can originate with the college or from a third party (federal/state governments or private scholarships).

Need Based Aid – Financial aid is awarded directly from the college based on your demonstrated financial need as determined by your FAFSA Estimated Family Contribution (EFC).   Details follow below.

A number of scholarships are also need-based, including the prestigious QUESTBRIDGE  full scholarship for students with demonstrated financial need and outstanding academic achievements. Single-parent families are encouraged to explore.

Merit Based Aid – These awards are based on a competitive review of the student’s academics, athletics, community service, etc. The awards are unrelated to financial need (or lack thereof).  Merit aid is awarded by colleges and also by private scholarship funds.
  • There are scholarships for a variety of majors and these are VERY competitive.
  • The chances of receiving a lucrative scholarship increase with higher GPA and demonstrated research/competition in your intended field of study. This is just one of the reasons why I encourage students in 8th-10th grades to focus on setting their educational goals and taking steps to realize these goals.
  • Private colleges will offset and reduce some or all of any grants awarded by the amount of external scholarships received.

 

The scholarship offset is typically 25 to 50%.  For example, if a university included an annual $20k merit based award in your financial aid package and you receive an external grant of $5k, you should expect to see a reduction in the $20k award.  Despite the offset, the incentive to apply for these scholarships still remains, as any award is another noteworthy accomplishment on your resume increasing your chances of external scholarships in subsequent academic years.

Applying for Financial Aid: 

Forms, forms and more forms….

Each university will provide specific instructions for incoming freshman. The process will include submitting a

FAFSA (Free Application for Federal Student Aid).  

Several colleges will also require submission of a CSS Profile through the College Board portal and IDOC forms.  Several colleges also include college specific forms; this is especially true for gathering information about a non-custodial parent (divorced parents).

Deadlines are strict.  It is very difficult to receive any financial aid if you submit your FAFSA after the due date.

High School Juniors:

While you don’t yet have to file your FAFSA until late fall 2017, now is the time to initiate the request to establish a FAFSA account.  The student and the parent should submit a request for a FAFSA ID:
Selective Service: As noted in previous newsletters, all males over the age of 18 must register for selective service to remain eligible for to receive any federal funding, including student loans.
There’s a ton of information on the FAFSA government webpages, and much of it is clear but just overwhelming to find what you might need to know.  I am providing some basic information to get you started and invite you to contact me to discuss your concerns and unusual circumstances.
Nearly all undergraduate public and private universities utilize the FAFSA financial model to determine the extent of private institutional aid awarded, if any.   The FAFSA approach seeks to estimate the “Estimated Family Contribution (EFC)” towards the “Cost of Attendance”. 
The Cost of Attendance for each student is unique to each college and includes tuition, room & board, books, supplies, personal expenses, travel and applicable fees.  The range across private institutions for 2016-17: $40 to $70k+.
Keep in mind that this is a budget of sorts, whereby the first two items are billed through the College Bursar and paid directly to the institution. These are the two largest items comprising COA.  The remaining items are out-of-pocket expenses leaving quite a bit of room for a student/family to minimize costs with reasonable effort to do so.

The key piece of information we need to focus upon is your family Estimated Family Contribution (EFC).
The difference between the COA and the EFC is your family’s Unmet Financial Need.

How a college meets that difference  is determined by all the factors noted at the outset of this newsletter: size of endowment, alumni giving, etc  and the strength of the student’s application.
Let’s be crystal clear.  While admissions is need-blind, once admitted, if you are eligible for financial aid (COA-EFC= Unmet Need),  institutional financial aid can be in the form of grants, work-study, student loans and parent loans.  The mix of that aid is subject to negotiation which will be discussed in a subsequent blog posting .
I’ve seen financial aid award letters including $60k of grants where  the same student receives a package of $50k in parent and student loans at another institution!!  What does this tell you about how attractive a college finds your student? What does this tell you about how to target and select colleges?

COLLEGE APPLICATION ESSAYs 

and FINANCIAL AID:

Your unmet need is certainly subject to negotiation depending on a number of factors that relate relate to the strength of the student’s profile, gender, selected major, location to name a few.  
 
The stronger your admissions portfolio and in particular your common application essay(s) where you clearly demonstrate how you will contribute to the institution and show “informed interest”, the greater are your chances of receiving an award letter with more grants and less of an amount in loans. 
 
It is heartbreaking to receive a well-earned acceptance letter only to open the financial award letter and see LOANS rather than grants.  Loans are what public college offer.
 

DETERMINING YOUR EFC?

Factors that determine an EFC include parental AGI, assets in the student’s name, unusually high medical expenses, divorce/separation status and the number of children in college at the same time.
You can experiment and plug in a few different scenarios. Maybe you can defer a large bonus or contract? Maybe it doesn’t pay for one spouse to work outside the home while the children are enrolled in college.   Maybe you can still move assets in the children’s name into the parents’ name (this is only a strategy for freshman and sophomores– consult your tax accountant for advice).
DIVORCED and FINANCIAL AID: I’ve worked with several divorced and blended families and I am able to sit down with you one-on-one to discuss your situation so we can ensure that the college choices are supported by what your family can afford and how financial aid works. Regardless of what your divorce decree indicates, the lower earning parent should claim the student as a dependent on the 1040 – thus becoming the custodial parent for FAFSA purposes. I also maintain a database of colleges that request and overlook the non-custodial parent income.
My Comprehensive College Admissions package provides guidance in selecting colleges not only where your student will thrive academically and socially, but also to select colleges to maximize your chances of receiving financial awards.  You’ll also receive guidance in submitting your FAFSA, CSS Profile and IDOC filing, interpreting your financial aid award letter(s) and assistance with negotiating/appealing your award letter.
Please CONTACT ME to answer your financial aid and admissions planning concerns.   
 
Each situation is unique and I will work on your behalf to minimize the pain of applying for and understanding financial aid.   The most important consideration for all juniors-making sure you haven’t eliminated colleges on your radar given misconceptions about financial aid.  For many families, there is often more financial aid funding available to you at private colleges than public institutions.
Again, best wishes for a strong finish to the school year!
Bonnie
It’s Time for Reflections:  
YEAR-END EDUCATIONAL & COLLEGE PLANNING ASSESSMENT
As the end of the school year is within sight, I invite all students to reflect upon goals set in August.  Which of these were easily achievable?  Why?  What have you learned about yourself and how you approach learning and your time that works well and what will you change for the next academic year?
Bonnie R. Rabin, Ph.D.
Educational and College Admissions Consultant