What is the best way to financially prepare for college in the midst of COVID-19?

The best way to financially prepare for college is to make sure that you have the right schools on your list, schools that are a good financial fit for your family. 

How do I determine if a school is a good financial fit?

The first step is determining what you and your family can afford and how much you might be expected to contribute. This can seem like a daunting task, but there are some steps you can take to get a reasonable estimate.

1. The first place I would go is the FAFSA4Caster which estimates eligibility for federal aid in either loans or grants. Even if you do not think you will qualify, it is a good place to start. The FAFSA4Caster is not an application for aid, but it is instead a planning tool for you and your family. You can use this tool as early as middle school so that your family can “receive early estimates, create scenarios based on future earnings, and then establish college funding strategies.” Importantly, this tool will give you an estimate as to your family’s Expected Financial Contribution (EFC). This is the amount of money that the federal government will determine, based on your FAFSA, that your family should expect to pay every year for college. This determines your family’s financial need.

2. When applying for financial aid, some schools also require the CSS Profile, run through the CollegeBoard, which has a slightly different calculation. For that reason, I recommend also running the Collegeboard’s EFC Calculator. You will want to compare these two numbers.

3. With those two numbers, you are in good shape to run Net Price Calculators for the schools you are considering. A college’s net price is the difference between the total cost of attendance (tuition/fees + room and board + indirect costs) and the estimated financial aid you will receive from the school and/or federal government. The total cost of attendance is also referred to as the “sticker price.” Most families do not end up paying the sticker price. The net price calculator is specific to each school and gives you an estimate of what you can be expected to pay at that particular school. This net price can be covered with family funds, private or Parent Plus loans, or outside scholarships.

College Scorecard is another good resource for finding out about price, graduate rate, retention rate, average annual debt, average monthly loan payments, and average salary after graduating for each school. 

You may realize that the net price of a particular school is more than your family’s expected financial contribution. This is because most colleges do not meet a student’s full demonstrated need.

So how do you ensure you are putting schools on the list that you can afford, especially now in the midst of COVID-19?

If your Expected Financial Contribution is high, you should not expect to receive a lot of need-based financial aid from schools. You should be putting schools on your list that are known for giving merit-based aid. The largest source of merit-based aid comes from the institutions themselves, so you want to make sure you are picking schools that are generous with their merit-aid. Of course, you want to make sure you qualify for the merit-aid at those schools as well, so pay attention to the criteria for those scholarships.

If your Expected Financial Contribution is very low, then you want to look to schools that are known for meeting 90-100% of a student’s demonstrated financial need. This demonstrated need will be based on your EFC on the FAFSA and the EFC calculated from an institution’s CSS Profile if they require one. You don’t want to look at schools that are known for only giving generous amounts of merit-aid because often times those scholarships go to families who are “full-pay” in order to entice them to enroll at the school. This can seem very counter-intuitive to many families.

Be prepared to do a financial aid appeal

The FAFSA uses your prior year taxes, so for parents of students in the Class of 2021, you will submit your 2019 tax return when you apply for financial aid. Of course, your 2019 taxes may present a very different picture than what your financial reality is like currently with COVID-19. After you receive your acceptance letters and financial aid award letters, be prepared to go through the process of a financial aid appeal to explain to colleges the "change of circumstances” between your 2019 taxes and now, citing the specific ways in which you have been impacted by the pandemic.

Enlist help

One of the benefits of hiring an Independent Educational Consultant is that we are trained in financial aid matters and study different colleges and their aid policies. As a consultant, I can help you put schools on your student’s list that are a good fit academically, socially, and financially. I can make sure that you are applying to schools that are affordable, and help you navigate the financial aid appeal process if need be. Ultimately, hiring an educational consultant may save you and your family money in the long run.

Request more information on how I can help your family

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