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Tuesday, August 30, 2016

The Far Reaching Impacts of the 2016 FAFSA Financial Aid Application Changes: Families can Avoid Crippling Loans by Starting College Planning Early

This year, the financial aid application process has been significantly changed.  The Free Application for Federal Student Aid, better known as the FAFSA, can be filed for the 2017/18 school year starting October 1, 2016.  Previously, the FAFSA was filed in the first few months of the year.  With the filing date change comes a second deviation from the past: the use of the “prior, prior year” income information.  For the 2017/18 school year, FAFSA filers will use their 2015 taxes.  These two changes have numerous implications for all college bound families.

First, families should receive their financial aid awards considerably earlier.  This will give them several months to determine how they will fund the upcoming school year.  For those applying to college, alarming changes to their financial aid awards well after the May 1 decision date should be eliminated.  In the past, numerous families received very unwelcome news after having committed to a school.

Second, families need to begin serious college planning much earlier.  The financial aid base year is now the calendar year which begins in the middle of sophomore year. Used well, this information can help families avoid taking on crushing amounts of debt.  Those working with me will benefit even more from my expertise.

The FAFSA is the financial aid form required by nearly every college and university in the US. In order to be able to take federal student or parent loans or to get any federal grants, the FAFSA must be filed.  In California, the FAFSA must be filed by March 2 in order to qualify for a CalGrant.  Additionally, most of the colleges and universities across the country use the FAFSA results to determine how to distribute their own grants and tuition reductions.

With annual college costs exceeding $70,000 at a number of schools and many more topping $60,000/year, even many wealthy families are qualifying for need based aid.  The FAFSA uses what is called the “federal methodology” to calculate the EFC, or Expected Family Contribution.  In turn, financial aid offices use the EFC to determine the aid they will award.

There are two primary reasons for the filing date change.  A few years ago, the IRS and Department of Education introduced the DRT or Data Retrieval Tool.  This tool enables filers to transfer their tax information from the IRS database into their FAFSA. Unfortunately, the IRS could not process returns fast enough to provide the data in a timely fashion.  As a result, some families committed to a particular college or university, only to have their financial aid package altered months later when their tax return data was finally available. 

Additionally, with the earlier filing period, financial aid offices will be able to provide financial aid awards to families much earlier in the application process.  Families will then have more time to determine how to pay for the upcoming year of college.  They will also have time to work with the financial aid office to create a workable plan or to apply to additional schools, if needed.

In order to make October filing happen, the income information had to come from what is called the prior, prior year.  This is the calendar year before the calendar year that is finished before the year of school starts.  For example, for the 2017/18 school year, the prior year is 2016 and the prior, prior year is 2015.  By October of 2016, when families can file the FAFSA for the 2017/18 school year, the IRS should have been able to process their 2015 tax return.  When the families use the DRT in the process of filing their FAFSA, the tax information should be processed and ready to be pulled into the FAFSA.

The reason you need to start working with me during freshman year is because of this shift to using income data from the prior, prior year.  Here's an example:

For students who just started high school in August 2016, their high school timeline was this:

2016/17 Freshman year
2017/18 Sophomore year
2018/19 Junior year
2019/20 Senior year

Their first college year, assuming they go directly from high school to college, will be 2020/2021.  These students will apply for college during the 2019/20 school year.  In October of 2019, they will also be able to file their FAFSA form.  2018 will be their financial aid base year, the year of income used by the FAFSA processor to calculate the EFC (Expected Family Contribution).  2018 is the prior, prior year to 2020, their first year of college.  Take a look at those high school years again.  When does 2018 start?  It starts in the middle of the sophomore year.  Therefore, any changes which would be beneficial to a family’s financial aid eligibility need to be identified and executed during 2016 or 2017, the freshman year.

Unfortunately, most families don’t consider working with me until the junior or, even, the senior year.  With the changes, college funding planning can start sooner, since families will be able to know their EFC and financial aid eligibility a year earlier in the process.  With student loan debt crippling so many college graduates’ lives, finding good colleges which are affordable is more important than ever.

Additionally, the average time to complete a bachelor’s degree is six years.  Often this is due to students arriving at college lacking sufficient academic skills, the necessary life skills, or a clue what they want to study.  Without these three elements, students cannot complete their degree on time.   By starting to work with a college planning specialist like me who works both with student preparation as well as college financial aid and funding, the student has time to develop a focus for college and the family has time to prepare for their first financial aid base year, 2018.

To schedule an appointment to discuss your particular situation,click here: LET'S MEET!

Friday, August 5, 2016

29 Affordable Colleges for Middle Class Families

College prices are absolutely outrageous.  NYU, for example, now costs over $70,000 for ONE year!  Not surprisingly, many are questioning the value of college, which is certainly logical when you consider making a $250,000 - $300,000 investment for a bachelor's degree.  In many places in the US, you could buy a very, very nice house on a large lot for less than that amount.

Be not afraid!  Most families do NOT pay the advertised price for college.  Let's explore some more affordable, yet very high quality, options.  I'll address them in alphabetical order.  Each entry will end with a link to that school's financial aid page.

Amherst College, Amherst, MA

Financial need is NOT considered during the admissions process.  A student's financial need, or lack thereof, will not impact admissions chances.

Amherst College's admissions approach is "high need affirmative." This means that, if all other factors are equal, the college will give preference to first generation students.

Amherst provides generous financial aid packages.  All students can graduate debt free.  Amherst works with QuestBridge for students with very limited means.  They meet 100% of demonstrated need for both American and international students.  Amherst does not include loans in its financial aid packages.

58% of Amherst's students receive aid.

Barnard College, New York, NY

Barnard has a need blind admissions policy.

Barnard awards no merit aid but does meet 100% of demonstrated financial need.  Applicants must apply for aid when they apply for admission, not after they are admitted.  Barnard does include loans in its financial aid packages.

Bowdoin College, Brunswick, ME

Bowdoin has the "Explore Bowdoin" program which encourages high achieving students to visit the campus for three days by covering the entire cost of the trip. For more information:

Bowdoin does not consider financial need during the admissions process.  A students' ability to pay will not impact the admissions decision.

Bowdoin no longer includes loans in its financial aid packages.  Bowdoin meets 100% of demonstrated need with grant/scholarship assistance and a small work award.

Nearly half of Bowdoin students receive need based financial aid. (46% of the Class of 2018)

Brown University, Providence, RI

Brown also uses need blind admissions policies, ensuring that a student's ability to pay will not impact his or her chances of admission.

Brown meets 100% of demonstrated need. For families with a total income below $60,000, and assets less than $100,000, no parent contribution is calculated towards the Expected Family Contribution (EFC). (This lowers the EFC, increasing the family's financial aid eligibility.)  For families with total income below $100,000, the loan component of the financial aid award is replaced with additional scholarship. (No loans are included in the package.)  For families with total income below $150,000, reduced loans are included in the aid package.  Brown offers free tuition, room, and board for families making less than $60,000 per year.

42% of the Class of 2019 receive need based aid.

California Institute of Technology, Pasadena, CA

All of CalTech's financial aid is awarded based on need.  CalTech meets 100% of demonstrated financial need.

52% of Cal Tech students receive need based aid.

Columbia University, New York, NY

Free tuition, room, and board for families making less than $60,000.

Cooper Union for the Advancement of Science & Art, New York, NY

Cooper Union has a need blind admissions policy.

Every admitted student is awarded a half tuition scholarship and is eligible for additional merit aid.  Need based aid is also available

Cornell University, Ithaca, NY

Cornell has need blind admissions for American applicants.

Cornell does not give merit based aid but does meet all documented need.  Cornell includes loans in its financial aid awards.  Families making less than $60,000 are given free tuition, room, and board.

66% of students receive aid.

Dartmouth College, Hanover, NJ

Dartmouth has a need blind admissions policy for all US applicants.

Dartmouth meets 100% of demonstrated need.  At Dartmouth, free tuition is provided for students from families with total incomes of $100,000 or less—and possessing typical assets. Loans are not required in their financial aid offer.

Duke University, Durham, NC

Duke gives preference to first generation students and participates in the Say Yes to Education program, offering full tuition support to accepted Say Yes scholars with an annual family income under $75,000.

Duke meets 100% of American students' demonstrated need and does not consider financial need in the admissions process.  Duke limits the amount of loans in its financial aid packages.  Families making less than $60,000 get free tuition, room, and board.

55% of Duke students receive aid.  The average scholarship is $46,315.

Georgetown University, Washington DC

An undergraduate applicant's ability to pay tuition is not a criterion for admission at Georgetown.  

In 1978, Georgetown began its historic commitment to meet the financial need of every undergraduate who merits admission. The University works to provide eligible students 100% of their demonstrated financial need through scholarships, loans and other forms of assistance. Our practices mean that every eligible undergraduate student, once accepted, can afford to enroll.  

Each year over half of Georgetown undergraduates receive some form of financial assistance.

Harvard College, Cambridge MA

Harvard provides generous financial aid packages.  All students can graduate debt free.  More than 20% of Harvard undergrads' families pay NOTHING.  Financial need is NOT considered during the admissions process.  Therefore, your financial need, or lack thereof, will not impact your admissions chances.

All of Harvard's financial aid is based on financial need, with none being awarded for academic merit.  Families with total incomes under $65,000 pay no tuition, room, and board.  Harvard works closely with each family to ensure each admitted student can attend.  They expect families who earn between $65,000 and $150,000 to contribute up to 10% of their income.  Families with significant assets are asked to pay more as are families with incomes over $150,000.  Home equity is not considered, nor are retirement assets.  Harvard does not include loans in its financial aid packages.  They meet 100% of demonstrated need for both American and international students.

Over 60% of Harvard undergraduates receive aid.  Their four year graduation rate is 97%.

Harvey Mudd College, Claremont, CA

Through the Future Achievers of Science and Technology program, students from traditionally underrepresented populations in the STEM fields can visit for free.  They are also granted an application fee waiver. 

Harvey Mudd has a need blind admissions policy for all domestic applicants.  They also meet 100% of demonstrated financial need and have merit scholarships available.  Harvey Mudd does include loans in its financial aid awards.

76% of Harvey Mudd students receive financial aid.

Haverford College, Haverford, PA

Haverford does not consider financial need during the admissions process.

Haverford meets 100% of demonstrated financial need.  More than 50% of students receive a college grant, with the average grant being over $40,000.  Students with family income below $60,000/year will not have loans included in their financial aid package; loan levels for incomes above $60,000/year range from $1,500 - $3,000 annually.

56% of Haverford students receive some form of financial aid
Massachusetts Institute of Technology, Cambridge, MA

In addition to practicing need blind admissions, MIT meets 100% of demonstrated need.  The six year graduation rate is 93%.  Families making less than $75,000 per year don't pay tuition.

91% of undergraduates receive some sort of aid.  33% receive awards totaling more than tuition.

Middlebury College, Middlebury, VT

Middlebury is need blind in admissions and meets 100% of demonstrated need for all admitted students.  They do include loans in their financial aid packages. Middlebury limits the endebtedness of its low income students. Middlebury does not offer any merit based financial aid; all aid is given based on financial need.

Franklin Olin College of Engineering, Needham, MA

Olin's admissions is need blind; they do not consider a student's ability to pay during the admissions process.

Olin college is committed to meeting full the financial need of its students.  Every student is offered a $93,000 tuition scholarship for eight semesters of study. This scholarship covers half of the tuition costs.  In addition to that scholarship, 100% of demonstrated financial need will be met with aid.

47% of Olin's students qualify for need based aid. 

Princeton University, Princeton, NJ

Princeton has a need blind admissions policy for US and international applicants.
Princeton eliminated loans from its financial aid packages in 2001, the first university to do so.  We determine a family's ability to pay using Princeton's own need formula, with fair and generous individual results.  Princeton offers full ride scholarships (covering tuition, room, and board) for families making $54,000/year or less.  Families making more than $54,000 but less than $120,000 per year, Princeton gives full tuition scholarships.

60% of students receive financial aid.  Class of 2019's average grant: $46,000+

Rice University, Houston, TX

Rice has a need blind admissions policy and meets the full demonstrated need of its students.  Rice does include loans in its financial aid packages.  Rice partners with QuestBridge for low income students.

Stanford University, Stanford, CA

Students with family incomes less than $125,000 are expect to pay nothing toward tuition.  Stanford does not consider financial need when making admissions decisions.  Families making less than $65,000 are not expected to pay for tuition, room, or board.

71% of Stanford students receive financial aid.  Their four year graduation rate is 95%Last year, 47% received need-based aid from Stanford and paid an average of $13,600 toward their bills.

Swarthmore College, Swarthmore, PA

Swarthmore has partnered with QuestBridge to assist low income students.

52% of students receive financial aid.

Tufts University, Medford, MA

Tufts partners with QuestBridge to help low income students attend the university.

Tufts does not offer merit aid.  Tufts includes loans in its financial aid packages.

University of Pennsylvania, Philadelphia, PA

Penn has a need blind admissions policy.

Penn strives to meet the full financial need of traditional undergraduate students with an all-grant aid policy.  Penn does not include loans in its financial aid packages for dependent students whose families' incomes are less than $50,000.

Vanderbilt University, Nashville, TN

Vanderbilt makes three important commitments to U.S. Citizens and eligible non-citizens to ensure that students from many different economic circumstances can enroll at Vanderbilt:

First:  Since talent and promise recognize no social, cultural, economic, or geographic boundaries, our admissions process is need-blind for U.S. Citizens and eligible non-citizens. 

Second: Vanderbilt will meet 100% of a family’s demonstrated financial need. 

Third:  Financial aid awards do not include loans. Instead of offering need-based loans to undergraduate students, Vanderbilt offers additional grant assistance.

Vassar College, Poughkeepsie, NY

Vassar has a need blind admissions policy.

Vassar meets 100% of the demonstrated need of all admitted students and eliminates or reduces loans in the financial aid packages of low income families.  Some families receive over $60,000 in financial aid.

Nearly 60% of Vassar students receive financial aid.

Washington University in St. Louis, St. Louis, MO

Wash U meets 100% of demonstrated need for all its students. Entering first-year students and returning full-time undergraduate day-school students with parental incomes of less than $75,000 annually are not awarded need-based loans and instead receive grants from the university that will not have to be repaid. Families with parental income somewhat higher than $75,000 also may receive additional student loan relief based on demonstrated need and their financial circumstances.

Wesleyan University, Middletown, CT

Wesleyan does not consider financial need in the admissions process.

Wesleyan meets 100% of demonstrated need.  They do include loans in their financial aid awards.  All financial aid is need based. 

58% of students receive aid.

Williams College, Williamstown, MA

Windows on Williams (WOW) gives high school seniors the opportunity to spend three all-expenses-paid days at Williams. WOW is a selective program open to high school students in the U.S. and Puerto Rico; preference is given to high-achieving students who couldn’t otherwise afford to visit Williams.

Williams practices need blind admissions.  They admit the most qualified and compelling students without regard for their ability to pay—a family’s financial circumstances will never play a role in their admission decision.  Williams also partners with QuestBridge to assist low income students to study at Williams.

Williams meets 100% of demonstrated need.  There are no hidden costs at Williams. Once you’re here—no matter how much financial aid you receive—you’ll have access to the same opportunities as every other Williams student. Financial aid is portable and can be applied to study away programs as well as Winter Study trips and projects. It covers 100% of the cost of books and course materials so the price of books will never be a factor in the courses you choose. The college also subsidizes most campus events. You’ll attend parties for free, movies for $1, and major concerts and events for less than $5—making the cost of living at Williams far lower than at almost any other campus.

Nearly half of their students receive aid. 

Yale University, New Haven, CT

Yale admits students without regard to financial ability to pay for the costs of a Yale education.

Yale's financial aid is given on the basis of financial need.  No merit aid is given.  Yale’s financial aid policies ensure that 100% of every student’s demonstrated need is met with a package that does not include loans. The main component of Yale’s undergraduate gift aid is the Yale Scholarship, a type of need-based grant, but a financial aid award may include other grants and outside scholarships. For costs not covered by scholarships and grants, students and their families have options such as campus jobs and education loans.  Family's making less than $65,000 are given free tuition, room, and board.

In 2015/16, the average scholarship was $43,989.

64% of students receive financial assistance.