Safety Schools – Not Just For Academics

October 12, 2010

Our sons and daughters may have dream schools in mind where they hope to be accepted. Many will be accepted at those schools and some not. Just as there are “safety schools” for academics, some families will want to plan for “safety schools” regarding finances.

Most everyone will have a budget in mind when they set off to buy a car. Are you buying a $10,000 used vehicle or a BMW?  It is common that many families have not discussed a budget for college attendance.  Your family should look at your monthly expenses, factor in savings, etc and decide how much per month can be spent on college? How much are you willing to borrow? How much do you expect your child to contribute/borrow?

It is a good idea to have a frank discussion as to how much debt a family/student is willing to take on. At what point does the wonderful school not make as much sense if the finances don’t work?  This is where planning ahead can be a big help.  If finances are a concern, there should be affordable schools on your child’s list. That may mean that the sticker price is less, or more likely that the school gives out a good percentage of need /merit aid, and that your child is well situated to receive that need / merit based aid.

I recommend that anyone remotely concerned about this topic fill out an early estimate of your Expected Financial Contribution (EFC). That is the federal formula used to determine aid at any public school and the form is called the FAFSA.  Get a beverage of your choice – and grab your 2009 tax returns.   Go to:

Fill in the information – there is a free help line open until midnight.

If your child is applying to private schools, check to see if they use the CSS Profile to determine need.  If so, you can fill that out for real (with 2009 numbers) anytime this fall.

An area that you do have some control over is what schools to consider.  If your child is in the top 25% of the applicants at a given school, or has some special talent or needed demographic, they may be eligible for some merit aid or scholarships. (Code for – you do not have to pay these back)  If your child is only applying to schools that are a reach to get into, they will likely not be considered for any merit aid.   Also, some schools flat out do not give any merit aid or just give it to a very few so it doesn’t really count.  Some financial aid offices will speak with you about this before applications are submitted to give you an idea of the situation at their school. It is also listed in many college guides/college websites.

Your family is not likely to hear about any aid that has been awarded until after the acceptance letters have started to gather some dust. By then, it is very late to scramble and apply elsewhere if the finances are not realistic for your family.  All of this can be a stressful process, but it is much more manageable if you start looking into it now.

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