Paying for College, Part One: Scholarships

 by Katherine O'Brien, Certified College Planning Specialist

Confusing. Stressful. Complicated. That's how most people feel about the whole topic of paying for college.

Parents are afraid. Students are clueless, not having any concept of the meaning of money, of the real cost of anything.

 

Parents are afraid, unsure what is real – there is SO much conflicting and confusing information out there! In part, this is the case because the rules keep changing and there are variations from college to college and, even, alarmingly!, from year to year.

Scholarships Basics

Some Recent Stats

$46B scholarship dollars awarded in 2023, per the DOE. Scholarships and grants typically cover around 29% of college costs. Of that 46B, $8.2B was private scholarship dollars. Therefore 17% of scholarship dollars in 2023 were awarded by private organizations. The other 83% came from the colleges themselves.

 

Scholarships often enable students to afford a more expensive college than they could have attended without receiving the scholarships.

A greater percentage of scholarship recipients were attending very or moderately selective colleges than those who don’t receive scholarships (85% v. 75%). Students who enroll at very selective colleges are twice as likely to have won scholarships than  students at open admission colleges (17.7% v. 8.5%).[1]

 

Students with GPA over 3.5 is more likely to win scholarships. Also, students who file the FAFSA are more likely to have won scholarships than those who do not file the FAFSA (17% v. 9%). 85% of students who receive scholarships file the FAFSA v. 72% of students who do not receive scholarships. Also, students at private colleges are more likely to have won scholarships than those at public universities (19% v. 14%). Lastly, while more students majoring in STEM fields win scholarships than those with other majors, it’s not a significant difference (16.6% v. 14.6%)

 

About 1/7^th of students receiving scholarships receive them from private organizations. The total number of private scholarships has increased (20% from 2015/16 to 2019/20, per the National Postsecondary Student Aid Study). The total amount of private scholarships has also increased. The average private scholarship amount in 19/20 was just over $4,900 amongst students in bachelor’s degree programs.

 

Want a Full Ride?

 

Be aware that only 1.4% of undergrad receive gift aid covering their full cost of attendance (COA). Gift aid includes all types of grants and scholarships. 3% have enough gift aid to cover 90% of the COA.

Financial Aid impact

 

Simply speaking, this is how need based financial aid eligibility is determined:

 

COA – SAI – Resources = Need

 

Scholarships affect need based eligibility dollar for dollar. COA is the complete cost of attending a particular college for a particular year. It is an official number determined by the college. It might vary from major to major or college to college within a university, but not student to student. The COA includes tuition, fees, room, board, as well as a school determined amount for transportation, books, equipment, supplies, and miscellaneous expenses. SAI is the Student Aid Index, which is determined by the FAFSA (Free Application for Federal Student Aid) formula. The SAI is determinative for federal aid and most state aid; many colleges also use it to allocate their own need-based aid funds. Resources include monies paid by “outside sources.” This includes grandparents and other people as well as scholarships not directly granted by the college.

 

Because scholarships directly impact need-based aid eligibility, it is ESSENTIAL that you know whether you will be eligible for need based aid at colleges your child might attend. We’ll discuss this further in part two of this series.

 

Some scholarships are awarded for four years, while others are for one year only. Four year scholarships typically have requirements which must continue to be met in order to continue to receive them. Most important among these are the requirements of how many credits per term must be taken and the minimum GPA the student must achieve. Together these are called Satisfactory Academic Performance (SAP).

 

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[1]  https://thecollegeinvestor.com/44670/odds-of-winning-a-scholarship-increasing

 

College Prep Milestones

by Katherine O'Brien, Certified College Planning Specialist, Founder of Celtic College Consultants

 Like any long journey, the journey to college has a number of stages. Knowing where you are on the journey is essential to attaining the desired outcome - acceptances into great colleges with strong programs in a desired field at a manageable cost. The Three Pillars of College Success are:

 Excellent Student Prep

Savvy College Selection

Abundant Funding

 

 

Here are some major milestones on the journey to college:

Juniors Your college list is nearly finalized. Some application essays are already in process.

Sophomores Your criteria and budget for colleges getting on your list is set. You have an idea of your desired major and program.

Freshman Goals for personal development, explorations of possible fields of study and careers are well underway. College budget is estimated.

For the full timeline, with milestones from grade 5 to grade 12, email Katherine: KOB@CelticCollegeConsultants.com   Let her know whether you'd like the standard timeline or the timeline for Catholic families.

Over the past decade, my College Success Program students have each been offered, on average nearly $250,000 in merit scholarships! Get on track for College Success. Meet with me, get your questions answered, and join the program today! Email to schedule your family's private college prep meeting with Katherine: KOB@CelticCollegeConsultants.com

Know the Signs of College Preparedness

by Katherine O'Brien ThD Candidate, Certified College Planning Specialist, & Founder, Celtic College Consultants

 

There are signs that the water is rising and a river will overflow its banks. My friend, who has lived on a river for several years, had to learn those signs. Over the years, during our conversations, I hear occasional comments about the level of the river. This morning, after many storms this past week, I heard about having to move the benches away from the river bank. The river is expect to flood today, hopefully not all the way up to my friend's house. Even so, preparations have been made because the signs were known, watched for, and responded to.

 

 

Do you know the signs of college preparedness for your teen? Your family? Do you know what needs to happen and when it needs to happen so your teen is ready for college?

 

Campus Visits

As I spoke with a sophomore this week, we planned his second round of campus visits and how he and his parents can best prepare for them.

 

Course Selection

As I met with my 8th - 11th grade clients recently, we have discussed class schedules for next year, to meet the requirements of their top choice schools and programs, develop and show their interests, and show the level of academic challenge that they are capable of handling well.

 

College Funding

With the FAFSA changes, college funding strategies have changed. Have you refined your plans? Have you estimated your college costs and put together a cash flow strategy to meet them? Do you know your SAI?

 

Scholarships

College selection significantly influences scholarship eligibility. So does student preparedness. Hoping for scholarships is nowhere near as effective as planning for them. Do you know what types of scholarships might best contribute to your college funding plan? Is your student researching and applying to them? Considering that in college searches?

 

Life Skills

Life skills are sorely lacking in many young people, leading some to drop out of college, change their majors, transfer schools, and fail classes, all of which negatively impact their self-image and future prospects. Are you parenting in such a way that your teen is learning by steadily taking more responsibility, having opportunities to succeed, and to fail, while being mentored, rather than sheltered?

 

Leadership

One of my clients and I discussed his options for developing relationships with key teachers so they will know him well and be able to write top notch recommendations for him in a year. Demonstrating leadership, inside and outside the classroom not only helps teens become strong adults, it also boosts their sense of self, and enables key adults in their lives to get to know them, mentor them, then write strong recommendations for them.

 

 

These are a few of the signs of college preparedness. I invite you to increase your awareness of the signs. Schedule a family consultation with Katherine, a trained, seasoned professional with 20 years’ experience. Hear your teen discuss his or her accomplishments, ideas, hopes, and dreams. Ask your questions. Know what the signs are that you are track. Learn what next steps will move you and your teen toward college success. Be affirmed for the work you have done so far and mentored for continued progress. Email Katherine: KOB@CelticCollegeConsultants.com today to schedule your consultation so you know the signs of college preparedness and what the next right steps toward college success are for your family.

Financial Aid Awards - Evaluate, Consider, and, maybe, Appeal

Evaluate.

It is essential to understand the net cost at each school. Unfortunately, it is often the case that financial awards are incomplete so additional research is often needed. First, what is the COA, the total cost to attend for one year? This includes tuition, fees, room, board, books, personal expenses, and transportation to and from campus. Each college has an official COA. Your personal cost of attendance will vary. To normalize the COAs, adjust them so the same amount is included for books and personal expenses at every school.  For your own calculations, adjusting the transportation allocation will give your family a more accurate idea of your actual net costs. Keep in mind, however, the official COA is the one which come into play should you appeal the award offer.

COA – Grants – Scholarships – Tuition Reductions = Net Cost

COA – Grants -Scholarships - Tuition Reductions – Work Study – Student Loans = Current Out of Pocket Cost

Do not subtract parent loans.

Consider.

After having calculated the net cost, can you afford it? Remember that this is the cost for only one student for only one year. How many children do you have? What is the graduation rate at each school? (How likely is your child to graduate in four years?) CollegeData.com is one site where you can research 4-year graduation rates. Be aware that some programs, like architecture, are 5-year programs. Engineering or other schools which have many students participating in cooperative education or internship programs which delay graduation beyond four years may also have high graduation rates. If your student’s college  is of this type, take this into consideration as you consider award offers.

Note which scholarships are renewable. These will be renewed as long as the student takes enough credits each term and maintains a specified GPA. (These can be great motivators to keep your student using top study skills once on campus, too! For many, losing their scholarship means losing their ability to continue attending that college.) Once lost, these types of scholarships cannot be re-qualified for. Scholarship award letters and notices specify whether a scholarship is renewable and, if it is, for how many terms.

Appeal?

Circumstances that warrant an appeal letter:

1.     Change in family size. Should a family member die or move away, parents’ divorce, or a new child (or more!) arrive, it is important to notify the financial aid office immediately as you have likely grounds for an appeal. Such a change in circumstance may result in additional expenses, a loss of income, and other significant changes in the family.

2.     Loss of job or income.  One of the most powerful reason to appeal a financial aid award is that there has been a significant loss of income since the filing of the FAFSA or CSS PROFILE form. If this is due to a circumstance beyond the family’s control, this circumstance is one which enables financial aid officers to adjust the student’s aid package. The financial aid office will want to know the date of the change and the circumstances. They also will want to know the amount the earnings have been reduced and any reasonable estimate of how long it might be until a new position is procured or the income is restored. Whenever possible, provide documentation of your statements.

3.     Significant non-discretionary additional expenses.  A serious injury or illness in the family, or needing to move an elderly family member into your home, or a natural disaster that results in damage to your home, vehicle(s), or family members are all events which can be grounds for an appeal. Document your expenses as best you can.

4.     Better offer from a similar school. Some schools will adjust their offer in the event your student has received a more generous aid offer from a competing institution. It is important that the schools be similar to the one you will be appeal. Enclose a copy of the competitor school’s award letter with your appeal letter.  This sort of appeal can be even more effective the later in the season it is, as colleges scramble to fill their classes. At the same time, very popular schools tend to fill their class early so being prompt will be more beneficial in those cases.

Important Guidelines for Writing a Financial Aid Appeal Letter.

Should you determine that an appeal might be helpful, check each school’s financial aid page on the website to see if instructions about how to appeal are listed. Some schools have a form they required to be completed.  Most schools, however, do not have appeal instructions online. In those cases, give the office a call and ask how they would prefer you present your appeal.

1.     It is perfectly acceptable for parents, rather than the student to communicate directly with the financial aid office. This is not the case with the admissions office. However, it is fairly common for the financial aid office to require your student to sign a FERPA waiver giving them permission to speak with you.

2.     However, it is ideal, especially if this school is your child’s first choice school, for him or her to write a note to attach to your letter saying that this is his/her first choice school and that s/he has asked his/her parents to appeal for more financial aid to enable him or her to attend that school. Have the student include a statement that s/he will attend the school, if the finances can be worked out.

3.     In all communication, clearly identify the student by legal name, date of birth, high school, whether a first year or transfer applicant, and the application round (early decision, early action, regular decision). Clearly identify yourself and your relationship with the student.

4.     I encourage you to express some sort of happiness or gratitude that your child was accepted into the college and express gratitude for any grants and/or scholarships which have already been offered.

5.     Early in your letter, identify it as a letter of appeal.  Ask them to review their offer of financial aid in light of the information you are providing in your letter.

6.     State your information concisely.  Let your appeal be based on clearly stated numbers, dates, and events beyond your control.  Proofread your letter to ensure that the situation(s) you are describing are presented in a way that someone completely unfamiliar with them can understand them and that how they affect your ability to pay for college is evident.

7.     If possible, make it clear what you are asking for.  If you need the grant to be raised to $10,000 in order to make your child’s attendance at that school affordable, state this clearly.  If this amount makes the net cost at your child’s top choice school the same as a rival school, state that clearly as well. Reiterate your child’s comment and state that you’ll agree to their attending this school if your appeal is approved.

8.     If you can visit the aid office, mention in your letter that you would like to arrange a meeting as soon as possible after they have had a chance to review your appeal.  Otherwise, let them know that you will be following up in a few days by phone.  It is easiest to say no to someone in a letter, more challenging by phone, and even more difficult in person.  When you meet, be courteous and that them for their time.

9.     Finally, be sure to thank them for taking the time to review your case.  Explain that your family’s finances play a significant role in determining which college your child can attend. If this school is the first choice school, be sure to state that as well.  And express your hope that they can make it possible for him or her to attend.

For assistance with evaluating, negotiating, and appealing your financial aid award, please contact Katherine at kob@celticcollegeconsultants.com

8 Ways Parents Can Help Teens Avoid Student Loans

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

How to Save on College: Regional Tuition Reduction Programs

Groups of states in various regions of the country have banded together to create tuition reduction programs.  Explore the majors, programs, and schools in your area:

FOR UNDERGRADUATES:

Midwest Student Exchange – Students in Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin may be eligible for tuition reductions at certain Midwest public and private schools https://www.mhec.org/MidwestStudentExchangeProgram

Western Undergraduate Exchange - for students in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the Commonwealth of the Northern Mariana Islands. https://wiche.edu/wue

The Academic Common Market provides tuition discounts for more than 1900 academic programs in Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. https://www.sreb.org/academic-common-market

The New England Regional Student Program enables New England residents to enroll at out-of-state New England public colleges and universities at a discount. Students are eligible when they enroll in an approved major that is not offered by the public colleges and universities in their home-state. More than 700 undergraduate and graduate degree programs are offered. Participating states are Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. http://www.nebhe.org/programs-overview/rsp-tuition-break/overview/

FOR GRADUATE STUDENTS:

The Western Regional Graduate Program enables graduate students to enroll in available graduate programs outside of their home state at in-state resident tuition rates. https://wiche.edu/wrgp

The Western Professional Student Exchange Program enables graduate students in Western states majoring in the health care professions to enroll in selected out-of-state professional programs.

https://wiche.edu/psep

The Southern Regional Contract Program enables students to pursue a professional health degree at out-of-state institutions, but pay in-state tuition at public institutions or reduced tuition at private institutions. https://www.sreb.org/regional-contract-program

Should You Homeschool High School? Part 4: A Look at Financial Aid Basics

By Katherine O'Brien, MA CCPS

Founder, Celtic College Consultants

Author, Every Catholic’s Guide to College: The Best US Colleges & Universities for Practicing Catholics, 2018 & 2019, and The Ultimate Guide to Top Quality College Planning, all available through Amazon.com

Photo by Pepi Stojanovski on unsplash.com

Financial Aid, Scholarships

First things first.  Your child WILL be eligible for federal financial aid, even if s/he earns a non-accredited diploma.  S/He’ll need to file the FAFSA (Free Application for Federal Student Aid) each year, just like all other students.

Financial Aid & Scholarships Basics

Financial aid and scholarships MUST be applied for.  There are a number of means to do so: financial aid applications, scholarship applications, etc.  Sometimes the student’s application for admissions is also used to determine his or her eligibility for various scholarship programs the school offers.  Sometimes a separate application, or series of applications and/or interviews will be required.

IT IS IMPERATIVE THAT EACH COLLEGE’S FINANCIAL AID AND SCHOLARSHIP WEBSITE BE CAREFULLY REVIEWED.  The particular opportunities, requirements, and deadlines at that institution will be posted.  Some schools have a central scholarships page, sometimes with their own search function, while others have information scattered around.  Scholarships can be given by the university, the college within the university, and/or the academic and athletic departments.

Need Based Aid – is comprised of tuition reductions, grants, and loans which are qualified for on the basis of “need.”  In common parlance, anyone whose budget comes up short would be thought to be in need.  In the realm of financial aid, there are formuli used to determine need, also known as demonstrated need.  Forms must be completed and submitted by deadlines set by the schools.  For federal student aid, the FAFSA form (fafsa.ed.gov) is the form which qualifies all citizens and legal aliens for federal student aid programs ranging from Pell grants to federal student and parent loan programs.  Colleges award need based federal aid before they award any other aid.  There are a couple of colleges in the country who have opted out of the federal student aid programs.  These schools have their own financial aid programs. 

Colleges can also provide need based aid to students.  Many use the FAFSA formula as their guide.  Some colleges and universities also require the CSS PROFILE (profileonline.collegeboard.org) form and/or their own forms.  A few colleges require their own forms.

EFC/Expected Family Contribution – is the official amount of money the FAFSA or PROFILE processor determines, based on their formula, that the student and his or her family can pay for one year of college.  There are five factors that contribute to the EFC:

1.    Parent income (for the calendar year before the year in which the student is applying; for the 2020/2021 school year, 2018 income information will be used.) is based on the Adjusted Gross Income (bottom line on your 1040) of the parents.  In the case of divorce, the parent is the one with whom the student lives more than half of the time or the parent who provides more than half of the financial support. (50.1%)  If the parent is re-married, s/he will report the income of both him/herself and his/her spouse.

2.    Parent assets (current at the time of the form filing) including all portfolio assets with the exception of the family residence, retirement savings, life insurance, and/or annuities.  Businesses are valued at zero if there are fewer than 100 employees.  See PROFILE instructions for their alternate rules.

3.    Student income (for the same calendar year as the parents.  For example, for a student graduating in June 2019, starting college during the 2019/2020 school year (fall – summer), 2017 income information will be used.

4.    Student assets, current at the time of the initial FAFSA filing.  The same assets are reported for the student as were for the parents.

5.    Resources include all outside resources, be they money from grandparents or private scholarships. 

Grants – are monies given to students based on need.  They can be federal money, like Pell or SEOG grants, or they can be money from the state, like the CalGrant program in California, or from the college itself.  Grants do not need to be repaid.  

Scholarships – are monies given to students based on merit of some kind.  There are two main categories of scholarships, from a financial aid eligibility perspective.  Institutional scholarships comprise 93% of all scholarship dollars.  These funds come directly from the colleges themselves.  Private Scholarships are those offered by other organizations like the Knights of Columbus, Nordstrom, etc.  Private scholarships are considered resources by the financial aid formuli.  They reduce a student’s eligibility for need based aid dollar for dollar.

Some scholarships have a need component.  This means that the scholarship awarding agency takes into account both merit qualifications and the student’s financial need. 

Some scholarship money may be taxed.  Money used for purposes other than tuition and fees is considered taxable income to the student.  Check with your tax preparer for particular information for your situation.

Gap – is the difference between your demonstrated need and the amount of financial aid offered.  Most schools “gap” students; they do not meet the full demonstrated need.

Other Aid – Some schools participate in collectives through which they offer tuition discounts to students who live in certain other states.  The Western Undergraduate Exchange & the Midwest Student Exchange Program are two examples.  These tuition reductions are not need based and are only merited by virtue of the student’s state of residence.  Not every public school in states that participate in an exchange offers the program.  Some limit the program to include or exclude certain majors.  Details are found on each regional exchange’s website.

Net Price Calculator – By federal law, every college and university is required to have a net price calculator on its website.  Sadly, many tuck them away and make them difficult to find.  It is often easier to simply use the school’s search function to find it.  In order to get an accurate estimation, the calculator will need to ask about the student’s GPA and test scores.  The less information requested, the less reliable the estimate will be.  Sadly, they are not required to provide a calculator that gives an accurate estimate of inquiring student’s likely out of pocket costs.

Katherine O’Brien, MA CCPS is a Catholic homeschooling mother of six who has homeschooled since 1998.  She is the founder of Celtic College Consultants and has served college bound teens all across the US since 2004.  Students in her 2015 -2018 classes were offered over $237,000 each, on average, in merit scholarships. In 2017, Katherine compiled and released Every Catholic’s Guide to College: The 315 Best US Colleges & Universities for Practicing Catholics, 2018.  It is available on Amazon.com.  Kolbe Academy families are eligible for 10% off of all of her services and $100 off her initial consultation fee.