Kim Parros and Victoria Berels
College acceptances have arrived for your child, some are still coming, or perhaps your student has been deferred from the college of their dreams. You thought that your student’s hard work on all those applications, essays, application fees, ACT/SAT test scores, and getting their counselor to send their grades was the hard part. Unfortunately, here comes the harder part: now comes the shock of the price to attend that amazing college they always wanted to go to.
So now you have to come to terms with the price of them attending this amazing college and understand all of the costs. The best way to see the big picture of costs is to look at the Award Letter, which some colleges don’t send out until the end of March. This is one of the first hurdles in the process if you are trying to understand the real cost to attend the college. Keep in mind that accepting an offer from a dream school without understanding the total cost can definitely sink your retirement boat and you can end up with debt that you can’t handle. My advice is: Don’t say “yes” to your college offer before the numbers are in. This can be problematic since your student has to think about their housing options and will not want to wait to see the Award before committing to get the housing ball rolling.
What to do? Let’s start at the beginning: You need to understand the results of the process. If you recall, you filed your FAFSA (the Free Application for Federal Student Aid) and you did this so that your student could qualify for federal aid, including Pell Grants, FSEOG grants, work-study, and subsidized student loans. Filing your FAFSA also made your student eligible for all of the free scholarship and merit aid that your college will be offering. This is where the “we make too much money to qualify” statement that some parents make is at fault. Some schools require you to fill out the FAFSA to be awarded this free money, period. After you hit the submit button, you then learned what your EFC (Expected Family Contribution) is, knowing that this magic number is a government measure of your financial strength. It is now assumed that this is the amount of money that your family you can afford to contribute to the cost of attending college per year.
This seemingly-enigmatic EFC amount is based on your completion of the FAFSA and it is a number that the colleges look at, but are not really interested in. If the cost to attend their college (COA) is higher than your EFC, you are now in a position to find out that most colleges don’t offer free money automatically to cover remaining costs above your EFC. Instead, they might offer you loans. Most families end up paying more than their EFC — unless this EFC is higher than the cost of the college.
Here is an simple example of this:
College X Cost of Attendance (COA) is $30,000 per year
Your EFC is $20,000
The gap between COA and your EFC is $10,000 per year.
It is now up to the college on how they make up the gap of $10,000 per year. They can offer you loans, grants, or scholarships. There is no standard formula that all colleges use, so it is hard to know how they will make up the gap between your EFC and their COA. One thing that I would like to point out here is that your student’s GPA and test scores will now come into play on how desirable your student is to the college, and this leads to how they fill the gap. Since there is not a “one size fits all” approach to this, it is hard to understand sometimes why some student’s gap is filled with “free money” and another is filled with loans.
So back to the question of “Can I accept my offer before I get my Award Letter?” Our standard answer is once you do, you must accept whatever the Award will be from the college. We think that it is harder to talk to the admission team about costs after you accept your offer, so waiting to see what is offered really is the best way to understand the big picture of cost.
This whole decision process is complicated and time sensitive, and more likely than not, you could use some third party assistance in negotiating the best price for your student’s collegiate education. This is where Parros College Planning comes in. We strategize on how to position your student as a desirable candidate for the most financial aid and how to afford the cost of any college, public or private, that your student dreams of attending. Schedule an appointment with us sooner rather than later, as many students and their families will be consulting with us to form their personalized plan in scoring the most financial aid from their college before Decision Day on May 1st.