Fear and Dread of the Financial Aid Process

Nothing creates more spine-numbing fear than reviewing the annual price of a private research not-for-profit university like George Washington University on College Navigator and seeing the tuition and fees are over $50,000, with a slated annual increase of almost 3.5%, and room and board costs over $12,000, and escalating at a 3% clip.

Sadly, this is not an anomaly among many private and public universities. Sticker prices for many private colleges can reach well past $60,000 and for out-of-state students, public colleges, such as the University of Michigan, are reaching over $55,000.  

Consequently, it is not surprising that, according to a 2012 study, few high achieving low-income students apply to any highly selective colleges. The sticker price stops most dead in their tracks. Furthermore, without access to reliable college counseling few know of the availability of financial aid. Among vast swaths of potential applicants, whether low, middle, or even upper middle income, many do not trust that college is affordable or that it is a solid investment in the future.

Add to this that more than 2 million students from low income families don’t even file their FAFSA form on an annual basis, and it’s apparent we have a dreadful level of information and confusion when it comes to our financial aid process.

How best might we empower ourselves to take full advantage of what the system currently has to offer?

The first rule is to file a FAFSA form as early in the admissions process as possible. If you are planning to enter college for the fall of 2017, you could have begun filing your FAFSA form on October 1st, 2016.  Moreover, you can use your family’s 2015 income tax returns to file. Better still, if you do not remember where you put your 2015 tax return, you can now port the IRS data directly into the form once you are on the FAFSA site.

To lessen the uncertainty of what you will pay to attend a particular campus, what is called the Effective Family Contribution (EFC) in financial-aid-speak, go to College Navigator. For each school there is both a financial aid and a net pricing tab. If you go to the UC Berkeley listing on College Navigator, under the ‘financial aid’ tab it lists that 59% of the students in 2015 received an average of $18,000.  Go to the ‘Net Price’ tab, and you will find that for families earning between $75,000 and $110,000 the EFC was around $19,000. For a more accurate predictor of your potential EFC use the UC Berkeley net-price calculator, which you can link to directly from  the college’s net price section within College Navigator. All colleges have net price calculators.

 Do not dismiss a college because it appears too expensive.  All schools are looking for the best candidates for their departments regardless of what an applicant’s financial status might be. Let me offer a specific case in point. If you happen to be superb in math and physics and are thinking of going into engineering, you might consider Viterbi at USC. While the sticker price is $64,000 all included, over 55% of USC students receive financial aid with an average package totaling $33,000. That would be an EFC of $31,000, comparable to going to the University of California. Go to the USC net price calculator and input your specific information and you might discover that your EFC is even lower.

Many colleges have substantial endowments enabling them to be aggressive with financial aid. While this list includes the Ivy League, Stanford, and Duke, there are lesser-known schools with generous financial aid including Grinnell (Iowa), Occidental College (Eagle Rock, Los Angeles), Holy Cross, the University of New Mexico, Rice and Williams. The problem is finding them.

The financial aid process does instill fear and works in mysterious, and sometimes dreadful, ways, but with a bit of knowledge, and a willingness to deal with the murky world of sticker prices and net price calculators you will be empowered to survive the system.