Paying For School

If you’re a parent looking for advice on paying for school, you’re not alone. Nearly everyone is always searching for the best ways to save and pay for college. And why not? Sending a child to college or university can be expensive.

When I wrote my book The Complete Guide to Paying for College, the average cost for four years at a private college was more than $250,000. Some state-related universities–big names whose football teams you might watch on fall weekends–would set you back six figures after four years.

No wonder paying for school is always a hot topic among parents with children younger than age 21. Because it is likely a struggle for everyone.

Advice on paying for school

One of the reasons I wrote by book The Complete Guide to Paying for College was I couldn’t find any books geared towards the middle class. This book offers surprising ways on paying for school This advice will resonate with millions of middle-class families. These are the folks that never made enough to fully fund a 529 college savings plan yet don’t earn enough to pay for college out of pocket.

Here are some topics about paying for school that the book covers:

• How to find bona fide scholarships, not spam and scams.
• Where parents can work to receive tuition benefits.
• The pros and cons of earning college credits before graduating high school.
• Which schools give out the most merit aid, even if you’re not a rocket scientist.
• Why your local state school may not be the best deal when it comes to paying for college.

More about The Complete Guide to Paying for College

College costs are straining every family except the richest. Most financial aid goes to the neediest families. The middle class typically doesn’t qualify for need-based financial aid. Again, these are families that can’t afford to pay cash for college and their salaries haven’t allowed them to save enough to cover all costs. If these families are trying to put more than one child through college, the challenges of paying for college are exponential.

You may have been asking how your child can receive a quality education even though you can’t pay today’s college tuition out of pocket. Well, The Complete Guide to Paying for College is the answer. This step-by-step guide includes actionable tips to save on education costs and the many living expenses―room, board, books, activities. This advice applies to the first year and beyond. Paying for college just got easier to understand for millions of families.

Finally, this isn’t the first time I’ve thought about the topic of paying for school. In 2012 I recorded a Marketplace Money radio essay on why I thought college tuition should be tax deductible.

Setting up a college 529 plan

One of the topics I discuss in my book is the college 529 plan. That’s a college savings plan that parents can set up–or grandparents can gift–to help pay for college in the future. While our family never was able to fully fund our 529 plan for our daughters, we did have one. And I think every family should have one, too.

Because even though our college 529 plan only ended up with a couple thousand dollars in it, it still helped. That money more than covered our youngest daughter’s final year in college for textbooks and all associated fees.

Educating yourself on paying for school

While of course I would be thrilled if you bought my book, the purpose of this blog post is this: I want to help educate you on different ways of saving and paying for college. Over the years I’ve written dozens of blog posts on these topics. Today, I’ve combined all those various blog posts into one–this one on paying for school.

Some of the blog posts that are remaining as stand alones are on related topics. This includes how college students can save money in college and best ways to furnish a college dorm. I also have a blog post, which I update every summer, on state sales tax holidays. These tax-free shopping days, weekends and weeks can help you save even more money when schopping for back to school or back to college. 

But back to the topic of paying for school. There are many facets to affording college tuition, room and board beyond putting money away in the bank. Below, I’ve addressed some of the most common topics related to paying for school. 

Applying to college using the Common App

What is the Common App and why do you care? Well, if you’ve got a student applying to college this year, it matters very much.

What is the Common App?

The Common App is a website that hundreds of colleges and universities participate in, providing one place students can go online to file college applications. At last count 702 colleges and universities “house” their applications on the Common App website. The schools are both big and small, private and public, Ivy League and Big 10.

The Common App provides an easy way and one-stop-shop option for students applying to college. According to the Common App website, each year one million students log onto the Common App. These students use it to submit some four million college applications.

When is the Common App available?

The Common App “opens” on August 1 of each year. This, effectively, kicks off the college application season for this year’s high school seniors.

Around our house we refer to August 1 as Common App Day. In fact, in the years when our daughters were applying to college, we celebrated it. We woke them on August 1 with the exclamation “Happy Common App Day.” We treated it with the same jubilation as someone who might wake a child on December 25 with “Merry Christmas.” Needless to say our teenage girls were not amused.

How do I use the Common App to apply for college?

Figuring out exactly how to use the Common App to apply to college can be challenging, especially if this is your first child to apply to college or your first time going online to submit an application. Even tech-savvy people can get caught up on how best to use the site.

Applying for Financial Aid

This post on applying for financial aid is based on information in my book The Complete Guide to Paying for College.

Applying for financial aid? It’s something that first-time college students or parents with their first child going to college likely don’t know how to go about doing. They also likely don’t know when they should be applying for financial aid.

One of the biggest mistakes these families make is putting off the financial aid application. Some may not realize that you have to apply for financial aid at the same time you’re applying for college. So in fall, when you’re sending in your college applications, you also need to be sending in your financial aid forms.

Applying for financial aid usually take three forms:

• FAFSA (the Free Application for Federal Student Aid) from the government
• The CSS Profile from the College Board
• A college’s own financial aid forms.

What is the FAFSA and what does it have to do with applying for financial aid and paying for school?

FAFSA stands for the Free Application for Federal Student Aid. Notice the “federal” part in there. That’s because this is the application that is administered by the U.S. Department of Education.

The FAFSA is the most important financial aid form you will fill out. Why? Because if you don’t complete the FAFSA, you cannot qualify for federal loans to pay for college. Also, many state aid programs rely on the FAFSA for information about you. Without the FAFSA, you can’t get any of this free financial aid.

When can I fill out the FAFSA?

On October 1st every year, the FAFSA becomes available. Since you need to apply for financial aid every year, it is important to remember this FAFSA filing date. Since some schools give out financial aid money on a first come, first served basis, missing the deadline can mean that you miss out.

While you can start filling out the FAFSA on October 1, you don’t have to. But like I just said, some schools do give out aid to the so-called early birds. If there is no reason to delay filling it out, just get it done. You are able to go back in at a later date and update your information, if something changes.

In addition to parents filling out the FAFSA, students need to create their own FAFSA ID. That’s because students have to “sign” (in quotes because it is an electronic signature) the FAFSA, too.

Where do I go to fill out the FAFSA?

You complete your FAFSA online at the U. S. Department of Education’s website. The FAFSA is also connected to the IRS website, via something called the IRS Data Retrieval Tool. This can help you automatically fill in your financial information from the previous year’s income tax return. Less typing for you!

Because the information is stored online, filling that form out each year is less daunting than it sounds. Unless your family’s income changes greatly or another child starts (or finishes) college, you can pretty much repeat information on your FAFSA from one year to another.

When you fill out the FAFSA as a first-time applicant to college (i.e. high school senior applying as a freshman) or as a transfer student, you must list the colleges where you are applying. Note that the FAFSA has room for 10 schools only. So if your plan is to apply to more than 10, the FAFSA can get tricky.

What is The CSS Profile?

The CSS Profile is another college financial aid online form and is another way that you go about applying for financial aid.

CSS stands for College Scholarship Service. It is run by the College Board–yes the same folks that do the SAT! Some colleges require it; others do not. It’s most popular with private colleges.

How does the CSS Profile differ from the FAFSA?

In general, it asks more detailed financial questions than the FAFSA. If your school requires it, you typically need to fill it out around the same time that you apply for admissions.

Check with the school’s financial aid office to determine if they require it and what the deadline is. Each school can have a different deadline. Like the FAFSA, you will need to complete the CSS Profile every year that you have a child in school.

What if I earn too much for get financial aid?

Even families who don’t think they will qualify for financial aid should fill out the CSS Profile. Like the FAFSA, colleges that require it typically won’t consider providing financial assistance, even merit aid, without a CSS Profile on file.

Don’t make the mistake that so many families do. That is, assuming that if they don’t tell the college how much they earn (by not filling out any of these forms or applying for financial aid), they will get more money. That simply is the wrong assumption. Without these forms on file, most schools will not send any need-based financial aid your way.

What does it cost when applying for financial aid?

The FAFSA is free to file. The CSS Profile is not. This is not a scam.

When applying for financial aid using the CSS Profile, you’ll pay $25 to have your information sent to the first college. You’ll pay $16 for each additional school. This is per student.

If your family qualified for an SAT fee waiver, based on income, you can also apply for a CSS Profile fee waiver to avoid these fees. Have your child talk to their guidance counselor about how to get that waiver.

Is applying for financial aid worth it?

Even with those fees, it really is worth it. We had to pay $50 each year when applying for financial aid for both of my daughters. However, that $50 helped us get close to $20,000 in financial aid from each school. One-quarter of that aid was from the Federal government, which the FAFSA covered. The rest was either scholarships or grants, all from the colleges themselves. Without doing the FAFSA and the CSS Profile, my daughters never would have qualified for scholarships and grants.

What about financial aid forms from your college or university?

Some colleges and universities expect you to fill out a third form when applying for financial aid. That third form is their own financial aid form.

Sometimes donors give money to help students who fit into very specific categories that are not covered by the FAFSA or CSS Profile. So, while this process feels redundant, it is necessary if you want to be considered for all forms of aid.

When it comes to a school’s own financial aid forms, meeting their deadlines is imperative. Don’t assume they are the same as the FAFSA or the CSS Profile. Call the financial aid office and ask. You don’t want to miss out on getting additional financial aid simply because you missed a deadline.

How do you go about qualifying for financial aid?

The two criteria that colleges use when determining if you qualify for financial aid are need and merit. Need is exactly as it sounds–does your family need help paying for college, because your income shows that you cannot afford it? And merit is based on grades, test scores, or how well you did in high school academics, extracurricular activities, leadership positions, or volunteering.

What is need-based financial aid?

The families with the greatest need are nearly always going to qualify for financial aid. However, you may be surprised to learn that even middle-class families can have need. This need could be based on income or the family’s situation, such as having divorced parents or many children in college at the same time.

Need is based on the family’s adjusted family income from tax returns. In other words their tax returns show their income after deducting expenses.

What is merit-based financial aid?

As far as merit goes, it’s what colleges reward you with for being a good student. Merit has nothing to do with financial need. Many colleges will use merit aid to attract students who might not otherwise attend.

While merit aid does exist, it is important to recognize that it is nearly impossible to get merit aid from the country’s top-ranked colleges. Why? Because everyone who goes there got great grades in high school.

Many students might receive a merit aid award notification before they have completed all of their financial aid forms. You still need to fill them out if you want to be considered for other financial aid.

Applying for financial aid takes time and requires effort on your part. But it really can be worth it.

College Financial Aid questions answered

Here is a video of a Facebook Live I did with a director of college admissions. We address some of the most common questions about financial aid and paying for school. 

How to Understand a Financial Aid Letter

Congrats to your son or daughter on their college acceptance. Now that April 1 has come and gone, the future class of 2022 has likely found out where they could be going to college in the fall. They’ve also likely found out what kind of financial assistance they might be receiving, in the form of a financial aid letter. It should have arrived with those aforementioned college acceptances.

I know that those financial aid letters can be hard to read and fully understand.

That was how we felt this time a few years ago. It was when our youngest daughter had received financial aid offers from each of the schools that had accepted her. Some of these financial aid letters included offers that were quite generous. One college, in essence, offered our daughter Annie a 60 percent discount through a merit scholarship. With another daughter already in college, that number made our heart leap—that is, until we read the fine print.

Why you need to read the fine print in a financial aid letter

Sure, this scholarship was a merit scholarship, due to Annie’s great grades and test scores. However, it came with a merit caveat. In order for Annie to keep that scholarship all four years, she needed to maintain a 3.8 GPA each year. While we don’t doubt our daughter’s academic abilities, we also didn’t think this benchmark was reasonable.

As Annie was making her decision, we suggested she think of this 60 percent off scholarship as a one-year deal. As such it shouldn’t sway her decision to attend this college. In the end it did—but in the other direction. She chose to attend a college that didn’t offer as generous a financial aid package. However, the help she received came with no strings attached.

How to understand a financial aid letter

Because I’m all about getting the biggest bang for your buck—especially when it comes to college tuition—I’ve put together seven tips for reading financial aid offers. This tips tell you what you need to know to understand a financial letter and what it is really saying or offering. I believe this will be required reading for any family sending a student into the world of higher education.

1. FAFSA and CSS Profile

Every family, regardless of household income, should complete the FAFSA, which stands for Free Application for Federal Student Aid, and the CSS Profile. You must complete the FAFSA if your student plans to take out federal loans to help pay for college. The CSS Profile is the private college and university version of the FAFSA. You must complete the CSS Profile in addition to the FAFSA in order to receive financial aid at certain colleges.

The deadlines for both was this past fall. If you never filed for either, there is a good chance your student did not receive a financial aid letter, sorry to say, along with their acceptance letter. The only exception to this is if a college offered your student a merit scholarship. It is only need-based financial aid that requires you to fill out that FAFSA or CSS Profile.

2. Expected Family Contribution

Based on your FAFSA the “Expected Family Contribution” (EFC) is the amount that the college believes you can afford to pay. Note: what the college says you can afford and what your bank account tells you that you can afford are often very different.

As parents with two children in college, it’s very frustrating to learn that colleges believe my husband and I can afford to pay more than my entire annual salary to cover tuition. College financial aid offices use this EFC when determining the financial aid they offer you, which may or may not give you as much money as you believe you deserve.

3. Loans, Grants and Work Study!

When it comes to the financial aid letter, you may notice a number of items listed. There are likely to be loans—both federal and private—grants or scholarships, and work-study programs. When added up, all these elements may look like a big number for a fat financial aid package. But don’t get excited yet.

If you read closer, you’ll notice that often this is not what the college is actually offering to give your student, but rather suggesting she get on her own. For example, when my older daughter Jane received her financial aid offer from her college before her freshman year, it included about $5,000 in work study, but that did not come with a guarantee that she could get a work-study job. While she didn’t end up getting a work-study job, she did find a part-time job but it only pays about $2,000 per year. On the other hand, Jane had no problem qualifying for the federal loan the college financial aid letter suggested. Then it was up to my husband and me to make up the difference.

4. Academic Eligibility

When it comes to grants and scholarships, what you need to understand is that these do not need to be paid back. However, many may come with an academic eligibility requirement, much like the offer Annie received that required her to maintain a 3.8 to keep her scholarship. If your child has received a grant or scholarship offer, make sure you read closely to determine if there is an eligibility clause.

You also want to confirm if the grant or scholarship is for all four years. Many will roll over from freshman to sophomore, sophomore to junior year and junior year to senior year. But not all do. If you have any questions at all, pick up the phone and call the college’s financial aid office for answers.

5. Student Contribution

Even if your family is like mine, with parents committed to paying for college (not all families take this approach), colleges expect students to work, which is both a good thing and bad thing. It’s a good thing, because students should work and learn basic money and time management. It’s a bad thing, because your financial aid letter may include the expected student contribution from summer jobs or, like in Jane’s case, a work-study gig that never materialized.

This student contribution might be a figure that is simply unreasonable for a student to earn over the summer. Either way we want our daughters to have skin in the game. So we asked them to take federal loans each year. Also, we ask them to use their summer earnings to cover their books. We also expect them to cover other miscellaneous expenses throughout the year.

6. Cost of Attendance

When a college provides its cost of attendance, it often includes the cost for books, lab fees and other student services. The good news here is you can often find ways to reduce that number, which can free up cash in your budget.

Let’s take textbooks first. You probably know they’re not cheap. Well, to save money, both of my daughters invested in Amazon Student Prime accounts to help them get their books on the cheap and fast—free two-day shipping for students. They’ve learned to rent books, which are cheaper than buying, or purchase the e-version of textbooks—also cheaper.

All schools want to ensure their students are insured. They usually include the cost of health insurance in that cost of attendance. However, if you have health insurance, you can usually knock at least $1,000 off the bill. Just have your student provide proof of coverage (i.e. a copy of her insurance card). Also, if your child isn’t taking any lab classes, you can usually negotiate that fee off the bill, too.

One more trick about financial aid

Even with all of these details explained, it’s important to understand something about college financial aid. Every year you have a child in college, you will have to reapply for financial aid. You will do this via the college’s own financial aid application (you can find it online). You’ll also need to complete that FAFSA. If your child is attending a private college or university, you need to fill out the CSS Profile. Every. Single. Year.

You’ll also need to send the college your and your child’s federal tax returns each year as well.

Don’t let this annual requirement slip through the cracks or you could get stuck with 100 percent of the tuition bill the next academic year.

Interestingly, when our younger daughter got to college, she made Dean’s List first semester. Then made it again and again. Because of that, she ended up getting more scholarships. So you can never tell from an initial financial aid letter how much money you may end up getting from a college.

Sibling Discounts at College

Do you have more than one child in college or more than one child applying to college? If so, you should find out if the colleges they are interested in or already attending have a sibling discount. This could help you save money when paying for college for both of them.

What Is a Sibling Discount?

A sibling discount is a discounted rate on tuition. It kicks in when two or more children from the same family attend the same college. (Sometimes these discounts apply to parents, too.) How do you find out if a college has this discount? Ask!

When talking with the college admissions office, ask about a sibling discount, a family scholarship or a tuition discount for family members. Schools use different terms to describe this discount. Basically, it’s a discount off tuition if more than one person in a family enrolls simultaneously.

Colleges with a Sibling Discount

Sibling discounts is one of the topics I cover extensively in my book The Complete Guide to Paying for College. It’s one of many little-known ways that parents can save on college tuition. Working at  college and getting a job with tuition benefits is another big way to save.

In my book, I explain how these four colleges currently offer sibling discounts:

1. Quinnipiac University
2. Gonzaga University
3. Sterling College
4. McDaniel College

There could be many more that offer discounts so don’t be afraid to ask.