“Making College Affordable: Tips for Avoiding a Mountain of Debt”

Do you want to go to college, but find that cost and affordability factors stand in your way? If so, you have a lot of company! Matters of cost and affordability are regarded as major obstacles to be overcome by most students who value a college degree.

The good news: financial aid is available. In fact, most colleges award tens of millions of dollars of aid to new students each year. The assistance comes in the form of grants/scholarships (money you don’t have to pay back), loans and campus employment opportunities. Ideally, you want to take advantage of financial aid that complements your family’s financial contribution. Scholarships are great, and they are likely to play a big role in meeting your financial “need,” but borrowing is often a necessary part of the equation as well. Borrowing too much, though, can saddle you with seemingly insurmountable debt by the time you graduate.

To get what you need in order to acquire the education you want, then, you need to be a savvy consumer. The following are four tips for making sure you don’t graduate with a mountain of debt!

1.    Plan ahead—don’t wait until you have been admitted to a school to try and figure out how you will afford it! Think about it. Would you commit to buying a house without first making sure your financing options are in place? Why would you proceed any differently for an educational expense of the same magnitude? The best time to start related conversations is before you are expected to make your first enrollment deposit—ideally, before you have applied for admission.

2.    Get early estimates of your “expected family contribution” (EFC) from the financial aid offices at the schools on your short list. A good place to start learning about college costs is the federally mandated “net price calculator” posted on the websites at the schools of interest. Don’t stop there, though. Few institutional NPCs, especially those at private colleges and universities, are programmed to respond with great precision to the wide range of family circumstances that are presented and few are equipped to reflect the nuances of a given college’s need analysis. As a result, the margin for error in an NPC estimate can be more than 10%—a considerable amount when you are trying to estimate college costs.

When cost and affordability are critical factors in your choice of a college, ask for an early estimate of your EFC directly from a member of the financial aid staff. If you can provide your most recent tax returns, you should be able to get an early estimate.
The following are questions to ask during such a consultation:

  • “What is our projected expected family contribution (EFC) for this school?”
  • “Which methodology was used in arriving at that EFC?” (Many private colleges tend to use the Free Application for Federal Student Aid—FAFSA and the College Scholarship Service PROFILE interchangeably. The former invariably reveals a lower EFC.)
  • “Which methodology is likely to be used when considering my actual EFC in the event I am admitted?”
  • “What will be the ‘total cost of attendance’ during my first year of college?” (You might know the tuition and maybe the room and board. There will be other fees as well. Know what they are.)
  • “If I am admitted and it can be demonstrated that my family (EFC) cannot cover the total cost of attendance, what type of financial aid might I expect from your institution?”

As you engage in this inquiry at different schools, make note of your experiences at each. Do you get answers or do you get the “run-around”? The manner in which you are treated now is a good indication of the manner in which you will be treated as an enrolled student.

3.    Ask to see the progression of loan expectations over four years. You are likely to hear that Guaranteed Student Loans will be part of your financial aid award for the first year. That’s normal and, depending on your EFC, you could be looking at up to $7,500 in loans for just one year. What happens, though, when the costs increase in subsequent years? Will your grant or scholarship increase to cover the differential that is your “financial need” or will you be expected to borrow more from sources other than the federal government? The typical four-year (GSL) indebtedness is in the neighborhood of $30,000 and it can be argued that such an amount can be paid off in a reasonable period of time by a graduate with a starting salary in the same amount.

It is important to note that, in any case, borrowing is a choice you make. While some families are completely debt averse—and that is their prerogative—the student debt expectations that underlie the GSL program have been in place for decades. $30,000 of debt after four years should not be regarded as prohibitive. Borrowing much more than that, however, is elective. Why? Despite the natural excitement that exists for certain colleges and universities, no student is limited to a single educational option. Before you commit to an educational experience that will involve excessive borrowing, be sure to investigate the alternatives available at other institutions.

4.    Manage expectations. Specifically, target colleges that will value you for what you have to offer. This might mean looking at schools that are slightly less selective than your initial target group. Consider the logic behind the suggestion. In the awarding of financial aid, institutional generosity is proportionate to student’s desirability. Colleges that value you for what you have to offer will admit you and make sure you have the means to take advantage of their educational opportunities without taking on a mountain of debt. Choose colleges at which your credentials, academic and otherwise, are more than merely competitive. Put yourself in competition where you are sure to be a highly desired candidate.

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