by Katherine O'Brien, MA CCPS
Founder, Celtic College Consultants
Teenagers typically see the world as nothing but
possibility. While this is true, those
possibilities always have costs and trade-offs which are often overlooked by
teens. Being strategic about which
colleges your student applies to can help him or her avoid taking out student
loans.
1.
Start estimating your EFC and net prices during
freshman year. I regularly meet parents
who are shocked and dismayed at their EFC (Expected Family Contribution) when
the FAFSA is filed during their child’s senior year. Never before had they any idea how much
college was going to cost. Yikes! Spend some time net price calculators, then
show your teen how to do the same. This
has the side benefit of incentivizing him or her when s/he can see the net cost
shift based on improved GPA and/or test scores.
2.
Discuss money and the financial side of college
early. When you put off having that
conversation, you are missing the opportunity you have to set
expectations. Your child needs to know
that the choice of which college to attend will have the single biggest impact
on his or her future financial state.
Explain to them that they need to make wise choices financially, and
that brand name colleges, like everything else, aren’t necessarily the best
choices. Also take the time to help them
understand that what is best for their best friend(s) may not be best for them.
3.
Do NOT procrastinate about filing the FAFSA
(Free Application for Federal Student Aid)!
It opens October 1 and needs to be filed during your child’s senior year
for his or her freshman year (and re-filed every year after that for each
subsequent year of college). Filing this
form will make your child eligible for federal loans and grants, as well as (as
determined by each state and college) a great deal of additional need (and
sometimes merit) aid. Much financial aid
is awarded in a more or less first come, first served basis. Put yourself at the front of the line!
4.
As a woman of faith, I can solemnly assure you
that “Hope and Pray” is NOT a good college application strategy. While it’s exciting to try to get accepted at
highly selective or reach schools, this dream can become a financial nightmare,
for both your child and yourself. The temptation
to stretch yourself too thin in order to make the “dream school” a reality
(despite it being unaffordable for you!) is great. It’s better to insist that the college list
(list of schools s/he will apply to) ONLY include schools that you expect to be
affordable, based on actual research and realistic expectations.
5.
Out of state costs for public universities can
be as much as DOUBLE what they are for in state students. This works well for the universities,
especially in states like California and Illinois where budget cuts have been significant. However, paying double for something similar
to your in-state universities is ridiculous.
(Honors colleges are a completely different case.)
6.
Many assume that all scholarships are great and
will make a significant difference when paying for college. Many private scholarships are for $1,000 or
less and last only one year. They also
are counted as resources and reduce need based financial aid eligibility dollar
for dollar. Selecting colleges with
generous scholarship programs your student would be eligible for will make a
much greater difference to the financial bottom line.
7.
Choosing colleges because they are highly ranked
doesn’t guarantee that your student will have a good experience or the
educational opportunities you hope for.
The criteria to be highly ranked often differs from a given family’s
idea of what make a good college.
8.
Parents are the best educators for teens in
matters of money. Your regular
interaction enables you to mentor how to comparison shop, save up for a special
purchase, develop and use a budget, and borrow money. Educating them about the realities of debt
can significantly help teens avoid a nightmare of debt and set financial
boundaries during the college search process.
If you ask a bank, which derives most of its income from lending money,
to teach your child about how to manage their money, you can reasonably expect
them to be taught how to be good consumer and borrower.
For more information on Katherine O'Brien's college consulting services and the program she uses to save students hundreds of thousands of dollars on college, see www.CelticCollegeConsultants.com
