A recent column in the New York Times rubbed me the wrong way. Entitled "Navigating Our Shameful, Maddeningly Complex Student Aid System," author Ron Lieber excoriates the entire monetary structure of college costs, financial aid, and the process of securing an affordable college experience. He recommends that "If you have a child who is already walking and talking and you will not be able to write a check to pay tuition, it’s best to start studying up on it now or finding a political candidate to support who will blow it all up." I disagree with his conclusion, and believe that determining where to go for college and figuring out how to pay for it can be an extremely insightful and satisfying process.In all fairness, Ron Lieber's lens "is about anything and everything that hits you in the wallet, from investing to paying for college to mortgages and homes." In contrast, my lens is focused on your child: who they are now, what they have done and experienced, what are their passions, and how they would best be equipped to explore and develop their true vocation. When we look at the college search from this perspective, and rigorously evaluate potential colleges with high standards for their ability to develop our children through the next stage, things fall in to place rather quickly.When you look at colleges from an economist's perspective, you quickly reduce your student and all colleges to simple commodities. In contrast, the truth is that your student is unique, and that colleges vary in their abilities to meet your student where they are and to challenge them to develop into who they can be. When it comes to your student, colleges are not interchangeable; where your child decides to spend their college year will have an impact on how fully they take advantage of this time in their life.Mr Lieber writes: "...colleges will offer discounts ...if the school feels it needs to raise the quality of its freshman class in order to appear more attractive to future applicants who can (the hope is) afford to pay more." Intending to condemn the colleges for this process, this statement misses the opportunity for the student who really figures themselves out. A college that is well equipped to help a student meet their objectives will naturally be more inclined to make sure that these students have the financial support necessary to attend.When students understand who they are, what they have accomplished so far, and what excites them about the future, they become able to recognize when the college seems to have been built just for them. These colleges have invested in the arts, athletics, academic disciplines in ways that form "a vibe" that works for the student. The students at these colleges are already engaged in activities and academics that create a learning and social environment that will just feel "right" to your student.It's easy to believe that only students whose families can afford the college experience have the luxury to demand that their college 'fit.' But the opposite is true: students whose families cannot afford the sticker price may only be able to afford to attend the "right" college. Colleges need students that reinforce "the vibe" (a.k.a. "the brand") as much as students need colleges that can fulfill their expressive, social, and academic development over the course of their college career. Because colleges need students who reinforce "the vibe," the college that is "right" will have more incentive to make sure that you can afford to attend (vs. the college that does not have the activities and programs to fully develop your gifts).Students who are willing to engage in my process of self-discernment, and discerning how well a college "fits," are rewarded with college acceptances with significant scholarships. In my experience, the colleges that "fit" well generally offer scholarships of $20K or more, usually awarded concurrently with admission. Additional dollars are often available; the need-based dollars are secured through completing your FAFSA application, and discussion with the college admission and financial aid office can secure additional funds. In contrast, colleges that are poor fits will offer lower (or no) scholarship dollars, basically signalling that you are welcome as long as you pay cash.It is all about "fit." A college that recognizes the "fit" that you identify (and describe) will reward that "fit" with more scholarship money than the college that sees no particular "fit." Those same college that recognize the "fit" will be more excited about helping you afford attending that particular college.Good luck with your college search! I am available to provide individualized college search services. Just contact me to get started.
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Hold the phone! The New York Times reports that the IRS data retrieval tool has not been functioning since March 3. The IRS data retrieval tool allows the FAFSA system to electronically pull the tax information that it needs to calculate your federal financial aid and the family contribution to your student's college education. When all goes well, you just click a button on the FAFSA system and you're done. Well, that's the plan.
Parents who try to determine how much college will cost often are confused by the guidance they find. They find college cost calculators on each college web site. They fill out the FAFSA and get a report. Those that dig further find cost estimates on the College Scorecard, the College Navigator, and a plethora of private sites. What are the differences between the college calculators and FAFSA? What can you rely on?In an earlier post, I explained how federal laws govern affect information about college financial aid. The laws tell us that there are certain responsibilities that the government, and that colleges have to create "transparency" in understanding how much college will cost. Let's look at those responsibilities.Section 1015a (h)(3) says that any institution "that receives Federal funds ... shall make publicly available on the institution's website a net price calculator to help current and prospective students, families, and other consumers estimate a student's individual net price at such institution of higher education." This calculator may be the calculator that the government developed, or it could be one developed by anyone as long as it uses the same data elements as the government-developed calculator. This calculator is required to be individually tailored to the student's circumstances, so it should take into account information such as the actual family income and assets. You would be reasonable to believe that you can rely on the number calculated, right?Not exactly. Because the very next section requires institutions to clearly state: |
What could be simpler than determining if you can afford to pay for four years of college? | |
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Many players can be involved with paying for college (in addition to mom and dad and the student): the federal government, the state government, the college, and various scholarship providers (really nice people and organizations who are looking for students to help out through college).
Now, whenever governments are involved, legislation and governmental agencies get involved. And things that cost a lot of money tend to attract the attention of regulators looking to protect consumers from predatory practices. So in this posting, I focus on federal legislation regarding Higher Education in a section of law entitled “Transparency in college tuition fees for consumers.” (CFR title 20:Education, § 28: Higher Education Resources and Student Assistance-Sec 1015a.
It is important for you to be able to make informed decisions about college. After the questions of how well the college fits your student academically and culturally, the next important question is how you will pay for college. The “Transparency in college tuition fees for consumers” law helps by requiring every college to provide the following information for inclusion on the government’s College Navigator website:
1. The institutional mission statement.
2. Academic information about students accepted by the institution.
3. Student demographics, including where students come from; diversity in terms of race, ethnicity, and disability.
4. Rates of successful degree completion by incoming freshmen; faculty and academic statistics.
5. Cost of attendance; average net price by income brackets after deducting average grant and loan awards.
6. Campus safety reports.
7. Link to the institutional website where students can additionally find information about student activities, disabilities services, placement services, transfer credit policies, and alternate tuition payment plans if available.
8. Link to reports if the institution has unusually large increases in tuition and fee or in the total cost of attendance.
Why does all this matter? It matters because you need to know what information you can use to help guide your college search and decision=making. It helps because college is incredibly expensive, and most consumers don't know that much about what goes into running a college and what makes a college the right one for them. How to understand the information will be the subjects of future posts.
But back to what will college cost. Most students don't pay the college "sticker price," by accessing grants and loans offered by the federal and state governments, as well as from private parties. Accessing federal grants and requires filing a FAFSA. What’s a FAFSA and how does it work? That’s the subject of my next post.
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