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Jane’s #3 Tip: If Cost Is Important, It Should Be Considered Early On

Cost is an increasingly important consideration. If cost is going to be a determining factor in selecting which school an admitted student can attend, it should be considered as a guiding factor early on in the college search process. Families should not wait until the end of the process (when they are filing the financial aid forms after January 1 of the student’s senior year) or until receiving financial aid awards. Instead, they should develop an overall search and application strategy that considers cost.

There are a number of different approaches to try to reduce cost. Having "financial safety schools" and being strong in an applicant pool for schools that offer merit scholarships should be important components of an overall application strategy that considers cost. Being in a position to compare different admission offers (and therefore having not applied under any binding early decision plans) may be another important component.

In planning to apply for financial aid, parents should consider moving money out of the child’s name in the year prior to filing the FAFSA and CSS Profile. In the federal means analysis formula that determines the expected family contribution, children’s assets are assessed at a higher rate than parents’ assets, meaning that more of that asset is determined to be available to pay for college. Moving money out of the child’s name protects those funds. (While children’s assets are assessed at a rate of 20%, parent’s assets are assessed at a maximum rate of 5.64%.)

Jane’s #4 Tip: Understand the Basics of Financial Aid and Merit Scholarships

When considering cost, students and parents should understand that there are two major categories of financial assistance that may be available. They are financial aid and merit scholarships.

Financial aid is typically based on financial information. It requires the completion of financial aid forms, which include the Free Application for Federal Student Aid (FAFSA) and, for many schools, the CSS Profile. The FAFSA uses standard formulas which calculate a family’s Expected Family Contribution (EFC). Financial need is the difference between the Cost of Attendance (COA) and EFC. It is critical to understand that financial need will likely be addressed through loans and grants and in different amounts or proportions by each school to which the applicant has been admitted. Keep in mind that the total COA can also vary greatly by school.

Merit scholarships are offered by some schools. They are awarded by the admissions office without regard to financial need and generally without having to complete any specific merit application. They are offered to applicants as an inducement to enroll. To qualify the applicant must have a strong academic profile within that applicant pool or have a special talent that is valued by that school and the school must offer merit scholarships.

For every school, students and parents should investigate whether merit scholarships are offered. If they are, that information should be available on the college’s web site under admissions or financial aid.