Financing your Childrens Education in an Age of Declining Financial Aid

College on a Budget: Tips for Parents of High School Seniors

The recent economic downturn may have sent your stock market portfolio and savings plunging, while the cost of college tuition, room and board, and other fees continues to rise. The ability to pay for their child’s college education concerns many parents more than ever. Here are some creative strategies from a former academic advisor at the University of Florida to make college more affordable.

Have the Money Talk Early & Often

If you haven’t already, have a frank discussion about what you expect to contribute (if anything) to your student’s education. Colleges and universities use a formula to determine your child’s eligibility for federal aid known as the Expected Family Contribution (EFC.) The formula takes into account income, assets, family size, and other factors. The website: can help you calculate your EFC.

Your EFC is important because the college(s) your child is applying to will use it when determining an appropriate financial aid package. According to the College Board, the EFC is subtracted from the cost of attendance at the college. The result is a calculation of the student’s financial need or eligibility for financial aid. This may be in the form of grants or loans.

According to the College Board, about two-thirds of all full-time undergraduate students receive grant aid. In 2008-09, estimated aid in the form of grants and tax benefits averaged about $2,300 per student at public two-year colleges, about $3,700 at public four-year colleges, and about $10,200 per student at private four-year colleges.

However, that EFC may not line up with the amount you are able/willing to contribute to your child’s education. It’s important to have open, realistic discussions about these numbers with your student BEFORE he/she applies to universities. How does your EFC compare to the amount you are planning to contribute (again, if any)? Hard feelings and disappointment can be avoided early in the process by determining which universities are in your student’s price range and which are not.

Consider the Long-Term

Most high school seniors do not consider the long-term consequences of college debt when making college decisions. They do not factor graduate school, or projected starting salary for their possible careers, into the equation.

This site: allows students to research those factors.

You simply enter your amount of student loan, interest rate, and number of years you wish to be paying it off. Then it calculates your monthly payments, and what your annual salary should be in order to live comfortably.

According to the Project on Student Debt, the average debt college graduates carry is about $21,000. Graduating with this amount of debt may mean loan payments which jeopardize your ability to buy a house, or save for retirement.

If your student is eligible for the Florida Bright Futures Scholarship, yet looking at out-of-state universities, point out the benefit of remaining in-state and graduating from college virtually debt-free. Remind him/her that there is always the opportunity to attend graduate school out-of-state and rack up the debt! (Actually, fellowships, teaching assistantships, and other aid abound for graduate school programs.)

Look Locally for Scholarships

There are many excellent books and resources on the topic of scholarships, so I will add only two tidbits of advice. First, do not discount the smaller, more locally-based scholarships. Often local community organizations may offer one-time college scholarships of $200- $1000 or more. Many students overlook these scholarships due to the small amount, but they are often easier to obtain because of a smaller applicant pool, and garnering several can really add up. Contact community chapters of organizations such as Rotary Clubs, Elks Lodge, and the Chamber of Commerce and ask if they offer college scholarships.

The other piece of advice is to remind your student to consider his audience whenever writing scholarship or application essays. Every institution and organization has specific and unique goals and the role of the essay is to demonstrate how your student perfectly embodies the spirit of that institution or organization. As I often counsel students, Many students applying for college admission or scholarships have high GPA’s, test scores, and hundreds of community service hours. Use the essay to distinguish yourself from the pack, and it will pay off handsomely.