College Finances

by Claudine Vainrub, Principal of EduPlan / Thursday, 12 November 2020 / Published in College Admissions

How much will I pay for College?

Paying for college is often compared to paying for airline tickets. No two people pay the same price. So how much will you pay? That depends on many factors. Knowing what those factors are, and how each college will look at your family’s financial situation, will help you determine the expected cost for college.

Am I eligible for Financial Aid?

Whether you are eligible for financial aid from a college depends on how much money your family can afford to contribute to your education. The FAFSA or the CSS Profile forms (a financial aid application by the College Board) are used to determine your family’s expected contribution. The forms include questions about:

Your parents’ income
Your income (if any) – even babysitting counts
Your parents’ savings or investments
Savings or investments in your name

What is an “Expected Family Contribution”?

The data from your FAFSA is used to calculate your “Expected Family Contribution” (EFC). This is the amount (according to the Federal Government) that your family should be able to afford to pay for one year of college. Colleges use this number to determine how much (if any) need-based financial aid you will receive.

What else is considered?

Besides income and assets, the following factors are also considered:

Your parents’ age. The older they are, the more savings they should set aside to retire.
Size of your family. Large families need more money to live than smaller families.
The number of children in college at one time. If more than one child is enrolled in college simultaneously, the EFC for each child will be less. Unfortunately, parents enrolled in college don’t count.

When do I file my Financial Aid forms?

Timing is everything when it comes to financial aid. You can complete your FAFSA and CSS Profile now. Plan to file the FAFSA as early as possible. This is the form needed to qualify for financial grants, work-study or student loans from the Federal Government. The CSS Profile may also be required by the college (or scholarship program). This is the form colleges use to assess who needs money from the college itself. It is their way of distributing their own funds to the students who need it the most. Colleges may have priority deadlines for both FAFSA and the CSS Profile. Be sure to meet the early deadlines to have better chances of receiving scholarships and financial aid. Check college websites for deadlines.

Take Action

The formula for calculating financial aid is updated every year. Use the latest online EFC Calculator to get an estimate of your financial aid eligibility. Your parents will be glad to know ahead of time what to expect.