With school starting Monday and everyone (in my house, anyway) in a tizzy, I thought I’d cut right to the chase today.  Below are 5 things you should be considering when it comes to your families’ college plans.  Please feel free to email me with any questions:

1. There is what college costs, and then there is what it should cost you.

Focus on the latter.  I often see parents and students fixate on sticker prices and disregard private or out of state schools because they are deemed too “expensive”.  Indeed, the sticker price of a private college has reached a nauseating $60,000 per year.  But that’s where the financial aid system comes in – $150 Billion in need and merit-based grants/scholarships and work-study.  66% of all students receive some discount, and in my practice I see families with incomes in excess of $200,000 enjoying awards over $30,000 per year!  That’s not everyday, but it happens.

Financial aid is by far the greatest equalizer, making private colleges affordable and sometimes even less expensive than in-state public universities…even if you think or have been told you make too much money.

2. Check The 4, 5 and 6 year graduation rates at every school you’re considering.

Huh? Many families are perplexed when I raise this issue, but the average time to graduate today is 5.5 years.  UF, for example, graduates just 58% of its students in four years – which is Best of State and the only public university in Florida above 50%.  FSU – just 47% and UCF – 34%.   Extra time in school means extra money spent, so look for schools that have a higher (as in 80% or better) 4 year grad rate.  The best resource for this is College Results Online.

3.  Don’t Rely exclusively on FL Prepaid.  Though it can be applied just about anywhere, it’s never enough.

One of my clients recently expressed some concern that he wouldn’t be able to use his FL Prepaid plan for his children if they enrolled out of state.  I was happy to explain to him that he was mistaken, that he would be able to use FL Prepaid at out of state schools as well.  This common misconception can be tragic, and it’s shared by thousands of families who currently own FL Prepaid plans for their children.  Widely misunderstood, FL Prepaid remains one of the most popular 529 Prepaid programs in the nation.  I get more questions about FL Prepaid than any other college savings vehicle.  While parents are delighted to learn that it’s transferable to out of state colleges, they are almost universally disappointed to discover that their plan will only cover a fraction of the total college expense – even at an in-state, public university.  The plan will pay, on average, about $4,800 per year.  With an in-state cost of attendance of about $21,000, you’re still on the hook for about $16K per year.

4. Don’t Hope for a scholarship. This is not a strategy.

Many parents of high-achieving students expect their child to get scholarships to meet the bulk of their college expenses.  First, many top tier schools do not award merit-based scholarships (everybody would be worthy).  Instead, the bulk of the money offered to high-achieving students from middle class families comes from the colleges themselves, based on demonstrated need. To secure these funds, parents must complete a Free Application for Federal Student Aid (FAFSA), and in many cases a CSS Profile as well.  One important note:   Some merit (i.e., non-need based) scholarships (like Bright Futures) require these financial forms as well.
And secondly, it’s true that there are abundant opportunities for students to seek and secure private scholarship dollars, with websites such as FastWeb.com a reliable aggregator.  But, these private scholarships tend to be awarded one time only, are very small in amount, and represent only a tiny 1-2% of the overall volume of money awarded each year.

5. Don’t run with the herd – Broaden your search
Applying to college and seeking a financial award is a highly competitive process. To improve your odds, take the road less traveled and apply to colleges where your student has a greater chance of standing out. These may include smaller colleges that don’t have as many applicants from South Florida but still have ample funds available for both need- and merit-based aid. For many of these schools, one need not be a top student nor a student body president, though every part of the student’s resume can help. The key is in finding the right fit and then actively expressing interest BEFORE the application is even submitted. Sign up to receive information, visit the school, Like them on Facebook, and never turn down an interview request.

6. Don’t procrastinate!  My bonus recommendation. Evaluate your college plan today – the earlier you do so, the greater your options will be – and you may find that ‘sticker price’ need not limit those options.  One place to get started is by attending my free College Funding  workshop next week in Pinecrest or on Sept 17 in Weston.

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