The 2017-2018 college admission season is about to start, which always attracts increased interest from parents on this critical question:
“How can we afford college?”
This month’s newsletter will focus on a few key strategies for cost-conscious parents.
1. Use a net price calculator.
An excellent way to cut the cost of college is for your children to apply to colleges that will give them generous scholarships. Traditionally, however, parents couldn’t predict what any college was going to cost until their children received their financial aid or merit award package.
Applying to colleges doesn’t have to be a financial crapshoot, though, if parents use federally mandated net price calculators before allowing their teenagers to apply anywhere.
The purpose of a net price calculator is to provide parents with a personalized estimate of what a particular school will cost a family. When using this tool, some families will discover that a $50,000 school will be greatly discounted, but for other families the cost really will be $50,000.
2. Understand who gets scholarships.
Roughly two-thirds of students who attend either state or private colleges and universities capture a price break.
At private schools, a stunning 89% of students receive institutional grants and scholarships. The average tuition discount at these schools is 54%.
These statistics, which come from the annual pricing survey of the National Association of College and University Business Officers, clearly show that it’s not just “A” students who receive scholarships. The key is knowing how to find this money!
For affluent students, the most highly rated and popular research universities are the least likely to provide scholarships. In contrast, master’s level universities and colleges are the most likely to provide most applicants with scholarships.
3. Don’t look in the wrong place for scholarships.
The smallest source of college money (about six percent) comes from private scholarships that non-profits, workplaces and other outside groups award. Unfortunately, this is where many families focus their efforts and the result is usually a small award or none at all.
If teenagers want to look for private scholarships, the best source of this money is usually local scholarships. Less competition exists for these awards and they typically aren’t found in the big scholarship databases like Scholarships.com and FastWeb.com.
4. Check the stinginess factor.
Parents can evaluate whether a school is stingy or generous by checking the institution’s statistics on financial aid and merit aid on the College Board’s website.
Here’s how to do this:
Type the name of a school into the search box on the College Board’s home page.
Click on the school’s Paying tab in the lefthand column. This will bring you to a page with the school’s cost of attendance.
Click next on the school’s Financial Aid by the Numbers link. On this page, check out these important figures:
5. Check graduation rates.
A guaranteed way to cut the cost of college is to graduate in four years. As you can see from the following federal statistics, most students take longer than four years to graduate.
Four-Year Graduation Rates
Public colleges and universities: 33.3%
Private colleges and universities: 52.8%
You can find the four and six-year grad rates of any school by visiting College Completion, which is a micro site of The Chronicle of Higher Education. When researching schools, families should explore who is graduating in four years and who isn’t. They need to find out what it takes at a particular college to graduate on time.
Question: Who files the Free Application for Federal Student Aid (FAFSA) if a student's parents is divorced?
Answer: If a student's parents are divorced, the parent who has housed the child the majority of a 12-month period will complete the FAFSA. A parent is considered the custodial parent, with the primary responsibility of completing the FAFSA, based on where the child has physically lived during a 12-month period ending on the day the FAFSA is completed. It makes no difference which parent claimed the child on a tax return or paid child support.
The same custody rules apply to separated couples.
Colleges can and do ask for copies of the divorce decree, separation agreement and child custody agreement. If the parents are going to change the child's living arrangements to live with the parent with lower income, it is a good idea to get the court documents modified to be consistent with the new arrangement.
College Confidential, undoubtedly the nation's most popular college-related website, draws roughly 300,000 visitors a month. It's a massive site that includes a great deal of information about college admission issues. The section of the site that attracts the most traffic contains the college forums. The site offers Q&A forums on such topics as admission chances, financial aid and standardized testing.
The site also maintains forums for families interested in individual colleges and universities. Parents and students can post questions about a school or share their impressions of a college and solicit comments from others. There are millions of comments posted on the school forums.
Michael Howell is a registered representative with, and securities offered through LPL Financial, Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.