Health & Fitness
College Q & A: When To Think About Financial Aid
Waiting until the senior year in high school to think about financial aid is like completing your Tax Return on April 14 with no prior instruction on strategy.
Q: Our daughter's high school counselor says there's nothing we need to do regarding financial aid until her senior year. Is this correct?
A: Unfortunately, this is what most school counselors say. They tend to focus on college admission requirements and SAT/ACT preparation, but they miss the college funding element almost entirely. High schools (public and private) often limit their financial aid instruction to a "How to Complete Your FAFSA" presentation in December or January of the senior year. This is like attending "How to Complete Your Tax Return" on April 14 with no prior instruction on topics like itemizing deductions or contributing to a 401K.
What is missed by schools (and therefore parents) is the most critical part of college funding – the planning stage. Just as tax planning can optimize a family's tax situation, so can college funding planning optimize financial aid results.
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The first step is learning your EFC (Expected Family Contribution). This calculation is the primary factor in determining eligibility for most of the financial aid awarded each year. Some families can actually reduce their EFC — which can directly reduce out-of-pocket college costs — when they understand how it's derived and they learn it early enough.
Parents should learn their EFC during the student's sophomore, or at the very latest, junior year. The most common question we get is: "Why didn't anyone tell us this sooner?" Sadly, moms and dads have never been told this by anyone. What they are told is that learning how to complete the FAFSA form line-by-line in January of the senior year puts them right on track. So they file their FAFSA, learning only now from the Department of Education what their EFC calculation is, and they are often shocked at how high the number is. There's little time for planning, because their child is leaving for college in just a few months.
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Whether your EFC is high, low or somewhere in between, the optimum college search strategy for your student is often contingent upon this very EFC calculation. Many parents realize their search would have varied dramatically had they only known their EFC early on. We'll offer some of these college search strategies in a future column.
Go to our website for a very accurate and flexible EFC calculator. We also have a variety of free resources, seminars and WEBinars. www.GetCollegeFunding.org
