Planning Early to Pay for College: A Timeline

We all know college is expensive. However, far too often families don’t start to really dig into the college finance process and create a realistic plan until it is too late. When working in a financial aid office, I’d regularly speak with parents who were absolutely set on having their child enroll, yet had no plan to cover their share of the costs. In addition, the family’s share was often much more than they anticipated because they did not do any research prior to applying. My favorite aspect of working for College Coach is that I have the opportunity to work with families much earlier in the college planning process! While financial aid applications are not submitted until senior year of high school, did you know that there are important steps that you can take as early as 9^th grade to minimize your college costs? Follow this timeline to plan for college payments early on in high school! 9^th Grade Where do you start? Perhaps you have heard about need-based financial aid, which is awarded based upon a family’s income and assets. The earlier you find out if you are going to be eligible for need-based grant funding, the better you can plan. Start by running an Expected Family Contribution (EFC) calculation. Compare the results with the cost of attendance at different colleges–check out the costs at a few in-state public, out-of-state public, and private colleges. Is your EFC less than the cost of attendance? If so, then your student may eligible for some need-based funding. If it looks like your student may be eligible for some need-based financial aid, then put yourself in the best position to receive the most funding. How so? Identify assets that may be repositioned prior to January of your child’s junior year of high school. This calendar year will be the base year for freshman year’s financial aid application. If your child begins college in 2020, for example, be sure to reposition any assets before 2018 to minimize the financial aid impact. Parents should also take some time during this year to start tracking the cash flow currently used to support their child to determine a baseline of how much college they can afford when other child-rearing expenses end. Additionally, students should do a preliminary search for outside scholarships to get an idea of what is out there and what the applications requirements will be. 10^th Grade Sophomore year is a great time to research scholarships that are offered at the colleges your child is beginning to think about. If a college lists general scholarship criteria on its website, is your son or daughter on track to be competitive in the applicant pool for this college? Search for the Net Price Calculator for each college your child is considering. Sometimes the NPC may seem hidden on a college’s website, so I’ve found the quickest way to find it is to do an internet search with the terms “Net Price Calculator” along with the name of the college. It should be among the first search results. The NPC will provide you with a (sometimes very rough) estimate of grants and scholarships so that you can estimate the college’s actual net cost to your family. Remember to finish any asset repositioning before the end of the first semester. Finally, now is the time for a family reality check. Do you have a realistic plan to pay for your share of college costs? Families with more than one child, don’t forget that you need a financial plan for each child for all four (or more) years of college! 11^th Grade Once junior year arrives, keep an eye out for the local and college scholarships earned by the senior class. This exercise should help gauge sources of funding that can be pursued by your child. Also identify colleges where your son or daughter will stand out academically compared to their typical applicant, as these “safety” schools are the ones most likely to provide significant merit scholarship offers to your child. These are just a few of the steps you can take early on in high school when preparing to pay for college. It is never too soon to research and create a plan. The better prepared you are as a family, the less stress you will all feel during the senior year, college years, and beyond. Save