Category Archives: EFC

FAFSA with use 2 year old tax data.

President Changes FAFSA to Give Families Better College Affordability Information.

This change in the FAFSA start-date starting on October 1st 2016, along with the recently announced College Scorecard system, are game changing aids for families with college-bound children.

All at once, families will have the information they need to make college lists that are actually affordable for their financial circumstances. The College Scorecard is a complementary tool that will allow a family to use their actual federal financial aid eligibility to compare school costs before their student applies.

Never before has this been possible, and it makes me wonder why the college financial aid system ever got to the point where students were applying blindly to schools they could not afford if they were accepted. When you think about it, that’s pretty much the definition of a disfunctional system. Hate to put it so bluntly, but there you have it.

There has been a lot of fear on the part of institutions of higher education everywhere. Changing the FAFSA start-date encountered a lot of political push-back. It took a lame-duck president, looking for legacy, to pull the plug on this systemic bottleneck.

This change will cause a rapid re-examination of business plans in colleges across the country. Recruitment, budget cycles, processing aid applications and issuing awards all must happen a lot earlier.

At this time we are in the one year countdown. Next year on October 1, 2016, if all goes well, the very first “early” FAFSA applications will be filed.

Will the FAFSA-only colleges be ready? There could be a tsunami of applicants, many of whom had never considered filling out the FAFSA because of it’s complexity. There might be a lot more Pell Grant recipients, who knows? The whole FAFSA system may slow down or even malfunction (like you know what!) under the weight of applications. But, in the long run processes will smooth themselves out. Meanwhile college students will be making “aid aware” college choices that might keep the Student Loan Monster at bay!
But still, the question remains: why did we, the parents, allow such a crazy system to persist for so long? Hmmmm….

How to understand financial aid award letters

Decode College Financial Aid Awards!

Okay, what the heck! Why can’t colleges just be clear about their financial aid offers.

All across the nation, high school seniors are receiving their financial aid award letters from the colleges to which they have been accepted.

Students and parents alike will be overjoyed as they take a first glance at these letters. After all, real professionals have carefully formulated these documents for maximum obfuscation.

Many who receive these well-crafted offers will believe that their top choice college dreams have been fulfilled.

The celebrations will commence. The heady feelings will go on for days. Then, someone may point out a questionable figure in the offer, and the clouds of doubt will move in.

The family will be confused, and as usual it will fall to Mom to interpret the meaning of the cryptic line item.

Mom, the detective, must now spend hours and days on the internet seeking out experts. She will repeatedly call the college or colleges asking questions, the answers for which she has no background to make an informed interpretation.

When, through enormous effort, the bad news is revealed, and it is determined that the dream college is unaffordable, there will be WAILING. And that’s not all…there will also be DOOR SLAMMING. Shall I go on? No, I think you get the picture…

Why, why, why can’t this information be made clear right away. Get the bad news out there and move on.

Do colleges really think that families will somehow make magic money appear? Well, yes. But it will probably be the magic money known as soul-crushing student loan debt.

It’s time for all financial aid award letters to be standardized to help consumers. So far, the only thing out there is the Education Department’s Financial Aid Shopping Sheet. Thankfully, it’s being adopted, albeit slowly, by some correct-thinking colleges.

My hope for the future is that all colleges and universities get on the transparency bandwagon!

College Applications are Outta Control!

Kids binging on filling out college applications is not a pretty sight. Five new completely different essays each night after school, and when that gets old, then out comes the old “cut and paste” routine. Pretty soon a high school senior starts to think his own personal story is a work of fiction.

Exactly why this is happening has an easy answer…because they can!…thanks to the Common Application which is making it possible to crank out college applications in unprecedented numbers.

Now the hard-to-swallow answer: Nobody is helping these high school seniors, as bright as they may be, to sort through their college application lists. So with no help, seniors are not taking any chances of getting shut out of college.

As long as Mom and Dad will allow their credit cards to get filled up with application charges (at $40-90 a pop!), then students will keep applying. With no counselor to help kids understand which schools they are most likely to be accepted by, and most importantly, to help families understand which schools they might be able to afford, the binge fest will continue.

In this video, I use about one minute more than my normal three, to go down those two critical roads: acceptance probability and family affordability. Please watch to see if I nail it. Please give me comments here or email me at TheCollegeMoneyMom@gmail.com.

College Applications Runneth Over!
College Applications need to be pared down. Watch my video!

FAFSA – Not That Scary!

Don’t run! It’s just the FAFSA!

Just sit down and watch this video. You might just feel a whole lot more confident and ready to tackle this infamous government financial aid form. After all it’s the most effective way to get money for college! It’s hard to believe, but the FAFSA is the gateway form to just about all the college financial aid there is.  The Federal Government takes the information you enter in the FAFSA form and computes your Expected Family Contribution or EFC. Almost all colleges take their cue from the EFC when it comes to handing out  grants, scholarships, work-study funds and federal student loans. Compared to the much more invasive CSS Profile form used by about 250 elite private schools, the FAFSA is a comparative snap. But stay vigilant and do your homework. This is your chance to get your fair share of the Federal student aid pie.

EFC Calculators

Learn to Use EFC Calculators!

EFC means Expected Family Contribution. It’s a calculation done by the Federal Government and/or certain upper tier colleges based on your family’s finances. This calculation will result in an immutable number around which your financial aid package (if any) will be designed. If your child is a senior when you discover this process, it’s pretty much too late to make any changes in your finances. If you are starting earlier to address this issue, then there are a few changes you can make in your finances that will change how they will be viewed for the EFC calculations. Mostly this is something to take up with your financial advisor (if you can even find one that understands the issues at hand). Check out this video I made about the College Board’s EFC Calculator. It can help you get a rough idea of what factors are considered in defining your EFC. Additionally, each college has a net price calculator on its website (usually inconspicuous) through which you can feed your financial information to learn whether you can afford the school or not. It’s pretty much a crap shoot as to the value of this information. You will be left with more questions than answers. So, if you have a financial aid question concerning the college to which your child will be applying, just call up the financial aid department! They are all regular people just like us! They will mostly try to answer your questions. Even if you feel dumb, just keep asking. The worst they can do is mock you behind your back. Oh well… So be a pest, but be a very nice pest, until you get the answers you want!