Tagged: Expected Family Contribution

Intro to Finding Scholarships

Lets face it, by the time senior year rolls around you’re too busy starting the transition to college, writing essays and attending Home Coming to spend much time looking for scholarships.

Once you turn 13 you can earn scholarships that will be held until you need them. By that standard, if you’re 15 you’ve lost 2 years in the free money hunt. No time like the present to get started.

The first thing on your agenda is to have a serious and frank discussion with your parents about what they can afford to pay for you to attend college. Remember that over the 4-6 years that you will be a student the costs will only go up, at least slightly. Keep in mind that your siblings will need college money, too. The conversation may be uncomfortable but it is a necessary step.

The very worst thing you can do is “just get in and we’ll figure it out”. That is completely backwards. Here are a few facts about college costs.

1. When a college lists average student debt on their website they refer to loans in the student’s name without including debt in a parent’s name.  The number is almost always just above $30,000.

2. Most Loans your parents take to finance your education must be paid beginning immediately and be paid every month like a mortgage or car loan.

3. Your financial aid package will have loans built into it that don’t cover the Expected Family Contribution for which many families must also borrow.

Now that I’ve convinced you to be serious about what you can afford, here’s a story about one student who made earning scholarships a priority and a job. The story comes from Susan Smith in the Philadelphia Inquirer on 6/15/13.

Christopher Gray of Birmingham Alabama, wanted to attend a college in the Northeast. To finance his education he spent 3 months in the library researching scholarships. Ultimately, he applied for more than 70 scholarships, of which he received 34, for a total of $1.3million, enough to pay for his Bachelors, Masters and Ph.D, living expenses and some to invest.

$1.3 million, yes your read that correctly. He is not the only student who has scored big by investing time and effort in searching for financial resources.

How to start your own search. Step One : Get Organized

You will need a filing system. Put it on your computer and consider a box you where you can put material mailed to you by colleges. You will need tabs for:

1. your resume, transcripts, test scores, and other official documents; tax records

2. informal records that you keep of community service, honors/awards, employment hours and responsibilities, leadership accomplishments.

3. scholarship information and a separate page or file for those applied for

4. articles you want to keep and leads

5. correspondence related to scholarships including from your school

6. college marketing material

The files can be used jointly by parents and students.

Christopher Gray created an app for android and iphones called scholly that sells for $.99. When you’ve set up your organization tools and downloaded the app, read the next post to see where to begin looking for free college money.

Read Where To Find Money for College to learn more!

Comparing Financial Aid Letters

When you lay out your financial aid letters you may find it impossible to figure out what it will cost at each of the colleges.  The organization and terms on each letter can be very different and few will give you a bottom-line cost.   Try this plan to come up with a real cost analysis.


For each college calculate……

Cost of Attendance          Hopefully, you saved the Cost of Attendance numbers from your pre-application research.  If you didn’t, add the tuition cost per year to the room and board cost.  You may not know the R&B cost until you deposit and choose a residence hall and room type; use the figure on the website as a ballpark number.  Add $500/year for books and supplies unless studying art, architecture and perhaps, engineering as the cost of supplies will be higher.  Next, figure out how much it will cost to travel to and from college, specially if flying is part of this expense.  Consider how much spending money the student will need.  Add it all together.

OK, now you are ready to attack the award letters.  For each award letter…..

Your EFC          From the Cost of Attendance you calculated above, subtract the Expected Family Contribution.  The resulting figure is the “Need“, the amount of money you hope the college will cover above the amount you must pay.

Merit Aid          Need can be met in various ways.  If there is one or more merit scholarship or grant offered, Pell or other grants, subtract those amounts from the Need you calculated.

Work Study          Look at the letters for Work Study.  Work study is a campus job that can be funded federally, by the state or by the college.  Subtract from the last Need figure calculated above.

Loans          Now we come to “Self Help”, ie, loans.  There will be federally subsidized and unsubsidized loans totaling $5500.  This is the maximum for first year students.  You may also see Parent Plus loans in the financial award.   These are loans parents take out in their own name and are in addition to any loans taken to fulfill the EFC.  Use this link to find more information on loans                                                                                  https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized

The Gap          When  you have subtracted all of the funding from the Cost of Attendance, you should  have a zero (or close if you’re estimating room and board).  Unfortunately, not all colleges meet all of  a student’s financial need and leave families with a Gap.

Your total commitment          Your commitment is the sum of your EFC,  servicing on-federal loans and the gap between the aid package and the Cost of Attendance.  Compare the  amount you will have to pay out of pocket for each college to find the one that is closest to your projected budget.

Scholarships from outside sources can reduce the pressure.  There are scholarships for all kinds of students and scholarships with application deadlines in every month.

Outside grants and scholarships          Students can begin to apply for college money at age 13.  The awards are held until the student matriculates in college.  These scholarships do not appear on financial aid letters from colleges.  Upon learning of the additional funding, most colleges will reduce the loans in the financial aid package, but there are some that reduce institutional grants.  When the FAFSA is filed for the student’s second year, the outside scholarships are condsidered student income when calculating the new EFC.If you will be borrowing to be able to meet the EFC,  outside scholarships can reduce the total amount of family debt.



Having the Pre-College Money Talk

When I have an introductory appointment with a family who have contracted for my help with college admissions, money and financial aid are always prominent in our discussion. There are 3 typical answers: Naming an amount of money available for this student’s education; “We don’t have a budget” which is usually amended to a number that will cover in-state fees at the flagship university; “We want her to get into the best college possible and we’ll figure it out.”

Most families don’t have enough extra cash in the budget to fully pay for tuition, room & board and fees.   The average amount of money set aside for college expenses covers only tuition at a state university, roughly $10-15 thousand.  So, where will the money come from?

Talking about money, specifically family finances, can be stressful, even embarrassing,   Parents neither want to worry their children or face the prospects of educational debt.  Without financial guidelines for choosing colleges, the potential for daunting debt rises.  You may need to have a parental summit to figure out how much you can afford before bringing the children into the conversation.

Begin to talk about paying for college during freshman year or before.  Start by looking at colleges and their costs before getting into family specifics.  Use your tax return to fill out the Fafsa4caster to predict your EFC, Expected Family Contribution.  While you’re doing research, find definitions for financial aid acronyms.

What should we talk about?  Start with the cost of public and private colleges and universities.   List what the bills will be for.  My daughter, who had a library card, not a membership card at Barns and Noble, was shocked to find that her text books cost over $100 each.  Later, move  the conversation to the amount of family out of pocket funds or assets are available for college.  Finally, discuss who is going to be responsible for which costs.

The advantage of early discussion of parental financial aid is that students can help make decisions on minimizing expenses, work to earn some of the money, and they can begin to apply for scholarships and grants.  Students can apply in their own name at age 13 for aid that will be held until they matriculate.  Even a small scholarship will pay for spending money, books, or transportation.

If you want my free Guide to Affordable College, send me an email, stephanie@accessguidance.com or call 610-212-6679.    I’ll be happy to guide you in preparing for The Money Talk.



Guide to Affordable College

Financial Aid Letters: The Critical Comparison

Are You Kidding Me?

Financial Aid letters are beginning to arrive along with lots of anxiety as parents compare the terms offered by colleges.  Here’s help on what to look for.

First, find the EFC, Expected Family Contribution.  This is the same number for every         college.  This figure is subtracted from the COA, cost of Attendance, and the amount below the line is called Need.

Need is met in a number of ways.

If the student is being offered Merit Aid in the form of Grants or Scholarships, this is subtracted from the Need (see above).

Next look for Self Help which is comprised of Work-Study which is an on-campus job., (This is also money that you don’t have to borrow) and Loans.

In the student’s name, federally subsidized and unsubsidized loans usually total $5,500 for first and second year students.

Subtract the Loans and Work-Study from the amount you had after subtracting Merit Aid.  What is left is money that parents will have to pay, in addition to the EFC.

Cost of Attendance                    $50,000

EFC                                            –    15,000

Need                                              $35,000accounting

Grants                                          – $10,000

Work-Study                                –      5,000

Student Loans                           –     $5,500

Unmet Need                                   $14,500

After deducting Merit Aid and Student Self-Help, there is still unmet need of $14,500.  The college may list Parent Plus Loans to fill in the unmet need.  These are loans that parents take out in their own names.  This would be in addition to any loans to meet the EFC.

Some colleges construct their Financial Aid packages with a gap between all the funding sources and the Cost of Attendance.  This is, unsurprisingly, called the GAP.  Yes, this is another amount that parents have to pay.

In total, parents must pay the EFC, Unmet Need and fill in the GAP.   When comparing your award letters the critical figures are those that parents have to pay, not the amount of Merit Aid.

Students who have earned scholarships from non-college sources must report them to the college.  Most colleges use the outside scholarships to reduce loans but a few will reduce the Merit Aid by the amount of the scholarships.

packs of dollarsIf you are a student or a parent who is in the midst of college planning, don’t be fooled by the college websites that state the average amount of student debt at graduation.  This figure does not consider the total amount of family debt –  student plus parents.

When you visit campuses, ask the admissions or financial aid representative the amount of parent loans in their average financial aid package.  They may not have an answer for you but it alerts them to your interest and concern.

I’m happy to compare Financial Aid Letters for anyone who is confused or needs help. Call or text 610-212-6679.