The hot summer months tend to lull many families into believing that they have plenty of time when it comes to college, regardless of where they are in the process. 

They don’t.  

 The college process today is  ‘mind-numbingly complex’ (the Wall Street Journal’s words, not mine)  and competitive; and even the most proactive planner will find that weighing all of the options, navigating through all of the misinformation, avoiding traps, understanding new rules, and making good decisions will take up way more of their time than they thought, at best; and can be very costly and even irreversible, at worst

As college costs continue to spiral out of control, planning early (as in during the first half of your child’s 11th grade year, at the latest) is undoubtedly the best way to stack the odds in your family’s favor.  Financial aid is widely available, but the rules are complicated and most families leave thousands on the table because they don’t understand the nuances of those rules.  By breaking down the process and learning the rules of the game before your child falls in love with a school, middle class families can save themselves thousands off a 4 year education.  But this does not happen automatically.  For most families, regardless of income, there are a number of legal and ethical strategies to reduce the amount of money you will be expected to pay for college. But as with most things, the earlier you start, the more strategies you will have at your disposal.

That said,  the ‘application season’ has now officially begun (the Common Application went live on August 1st), and one of the questions I get asked a lot is whether APPLYING EARLY offers the same universal benefits as PLANNING EARLY.

 My answer is yes… and no. Annoying, yes; but It really does depend on your situation.  So what follows is my explanation of some of the types and considerations of applying early to college. 

The first, and the most restrictive, is Early Decision.  It’s binding.  If you are accepted under an Early Decision plan, then you are contractually obligated to enroll.  The student, the parents, and the school guidance counselor all sign the Early Decision Agreement.  So, the only time I recommend Early Decision is if you are absolutely sure that this is THE school for you (which means you’ve visited it while in session), AND if you are sure you can meet your Expected Family Contribution without going into debt!  If you meet these two conditions, then Early Decision does potentially offer you an admissions advantage at some schools.  And if you get accepted, you are done by the middle of December, so there’s an early sense of relief.  But my general position for most families is, “Avoid Early Decision”.  I’d much rather that you have multiple admissions AND financial aid offers.  Since you have to commit to them before THEY have to offer you money, Early Decision is a great recruiting tool for the universities — not only does it ensure that they fill their class with the most motivated students, it also ensures that they do so at the highest price point possible.

Now unlike Early Decision, Early Action plans are non-binding.  Under Early Action, you will still have to submit your application and sometimes your financial aid forms early (usually by November 1st), and you may only be allowed to apply Early Action to one school (as in single-choice or Restricted Early Action).  Like Early Decision, you will be notified about acceptance by mid-December, but you can still apply Regular Decision to other schools before you have to accept or decline the Early Action offer. I actually like Early Action; it literally forces you to get your stuff done, you guessed it, early!   In fact, one thing I drill into all my students’ heads is to be early on ALL their applications… whether the college has a formal program or not.   Many school’s have rolling and priority deadlines:UCF is rolling, FSU’s first deadline is Oct 15th, UF’s Nov 1.    As I often explain to my students, you should prepare to complete all applications by Thanksgiving at the latest – not only do you avoid last minute snafus with technology, vacations and illness; you’ll also get the admissions officers while they’re still relatively fresh, or before they get burned out by the December 31 onslaught.

If you are a rising 12th grader, I hope this gives you something to think about as you enjoy the last couple of days of summer.  If you’re the parent of one, keep in mind that it’s important that you’re early as well.  The CSS Profile (the financial aid application used by many private institutions) will become available on October 1.  The FAFSA (which is required by every school and even for Florida’s Bright Futures Award) opens on Jan 1.  Many awards are given on a first-come, first-served basis, and some schools like Drexel will award you just for filing early.  At the latest, you want to submit your financial aid applications on or by each school’s priority deadline (usually Feb 1). AND, If you want to get a fair offer, or the maximum you deserve, you must have all of your ‘financial ducks in a row’ BEFORE you submit your application.  It is estimated that as many as 90% of applicants are under-awarded and a full 43% of folks left money on the table last year.  Don’t let this be you. 

And finally, a note to all parents with college-bound students:  You are literally ‘on the clock’.  Most of the scholarship and grant offers your child will receive will be based on your income from January of your child’s 11th grade year to December of 12th grade.  It’s worth noting that schools are increasingly looking back even further and inquiring about your finances from sophomore year as well.  It is imperative that you start (and ideally, complete) your college funding strategy BEFORE the end of the year that your child is in 11th grade.  A simple mistake in how you handle your finances in your ‘look-back’ years can easily cost you thousands in lost financial aid down the road.    Soon enough, if it hasn’t already started, you’re going to be inundated with college literature.  Before either your child or you fall in love with a school, you need to take control of the process and understand how colleges set and discount prices, how financial aid works and how to compile a realistic list of schools that will meet your child’s academic and social needs, and your family’s budget.

If you want to learn whether you are properly positioned to qualify for the maximum amount of grant (not loan) aid and what the application process entails, you should consider attending one of my free workshops. I’m holding two this month.  This is your chance to learn how to avoid the mistakes that plague 90% of financial aid applicants before you need to file your own application.

During the class I’ll cover:
  •     What to do if your 529 is not enough
  •     Why Bright Futures (the state’s merit scholarship program), as well as many other non-need based merit programs, are now requiring ALL applicants to file a FAFSA (Free Application for Student Aid) regardless of whether you expect any financial aid.
  •     The biggest mistake parents make with FL Prepaid Plans
  •     The critical questions you must ask of every school on your student’s list
  •     Why it’s taking longer than 4 years to complete college, and how to buck this trend
  •     How a pricey private college can cost less than a cheaper state university (even with FL Prepaid and Bright Futures)
  •     More!

Registration is recommended so that we can confirm your seat and ensure you receive reading materials.  If you are a high school parent, you don’t want to miss out on this information.  It’s free to attend, but ignoring this message can end up costing you thousands of dollars.

If your student is working hard to earn a spot at a top college, then let me help you do your part to figure out how to pay the bill.  I look forward to seeing you later this month.

Best,
Peter

P.S. Do you know what this year’s asset allowance will be?  Do you currently have money saved in your child’s name?  Are you planning on putting money into (or taking money out of) your retirement plan this year?  Do you know how much your pre-paid plan is worth?  If you’re not sure what the answer should be to any any of these questions, you really should come to my class.

P.P.S. Once again, the website to register is www.LearnCollegeFunding.com!

P.P.P.S. Feel free to forward this blog to someone you know who is a parent of high school students

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