3 College Funding Tips For The New School Year
By Caroline Wetzel
to have the kids resuming their routine, even if it’s chaotic? Is another part of you anxious, aware that it is just a matter of time until your student will need to make decisions around whether to go to college and how to fund it?
A
Following are three steps for initiating the college funding conversation and planning process.
Step 1: Set a goal. Everyone has differ- ent education needs. Some people have skills that are best suited for specifi c trades or vocations. Other individuals require completion of specifi c two-year education training to be qualifi ed to do what they want professionally. And still other students aspire to having a four-year college experi- ence. There is no one-size-fi ts-all education strategy for every type of student need.
Ask your student what she wants to do to earn money to pay for her bills after graduation. If she is certain about what she wants to do, her education goal is clear: to
re you a parent experiencing a mix of emotions as a new school year begins? Is part of you relieved
acquire the requisite training to deliver in that job. If she doesn’t know what she wants to become professionally, it may make sense for her to take a few classes at the local community college while working part time to determine what she enjoys and is good at, before investing all of her time, energy, and signifi cant fi nances into a multi-year college experience. The key to this step is to develop a clearly defi ned education goal that will set up your student for success real- izing her professional dream.
Step 2: Know your numbers. After con-
fi rming your student’s education goal based on her needs, have a candid conversation about the fi nances necessary to fund her education goal. Colleges generally expect students and their families to help pay for education costs to the extent that they are able to afford doing so.
Essential numbers to discuss at this stage include:
1. What is the sticker price published by the institution offering the education your student needs?
Sticker price is the published price for education and related services delivered through college. Broad categories of ser- vices that offer sticker prices include tuition and fees.
2. What fi nancial aid and tax benefi ts might be available?
There are four main sources of fi nancial
aid: federal government, state government, colleges and universities, and private or- ganizations. Various factors are considered when assessing whether aid will be made available, from the total cost of attendance to the Expected Family Contribution (EFC: how much the federal government believes a family should be able to pay for college out of pocket), to whether the aid is merit- based or need-based, the year in school, enrollment status, among other points.
Even if you don’t think you will qualify to receive aid, complete the Free Application for Federal Student Aid (FAFSA). The federal and many state governments, as well as many colleges and universities, use the content you provide in this application to assess whether you are eligible to receive grants and scholarships (which you don’t have to repay), work- study job opportunities, and loans (which you do have to repay).
Additionally, there are a variety of
tax-effi cient ways to fund college, from tax- deferred savings accounts to tax credits and tax deductions. In light of the recent tax legislation changes, it’s best to refer to the IRS website and your accountant to clarify which tax solutions are most suitable for you.
3. What is the net price to the family? Net price is the difference between the
sticker price published by the college and the fi nancial aid and tax benefi ts uniquely
32 Natural Nutmeg - September 2018
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