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Home>Daily Capital>College Planning>7 Must-Read Financial Aid Research Tips For High School Seniors

7 Must-Read Financial Aid Research Tips For High School Seniors

If you’re the parent of a rising senior high school student, you may feel like time is traveling at warp speed.

If you are a rising senior yourself, you may be on the other end of the spectrum: You want time to slow down! After all, summer has been fun — full of friends, swimming at the lake and yes, even your job as a summer camp counselor in Colorado.

But soon, you’ll be knee-deep in the Common App essay, hunting for the best college online and on college visits and navigating college applications. You’ll also have to (eek!) navigate financial aid at various colleges. Naturally, you may have lots of questions about that process.

Many people start their college search online, and let me be the first to tell you that I think this can be a great thing. However, consider not doing your research solely online. Researching on your own could even encourage you to jump to certain conclusions. Let’s go through a short list of research tips so your whole family can feel like they’re on the same page.

Tip 1: Don’t let sticker price scare you away.

Don’t let the sticker price affect your decision before you have a chance to dig in.

You may have already heard this before, but it’s hard not to feel daunted when you or your child has been eyeballing a school that costs $64,000 (or more!) per year.

Read More: Guide to Saving for a Child’s Education

I spent 12 years in college admission — at a liberal arts college, no less — and it wasn’t cheap. However, after really digging into the actual costs after merit aid, outside scholarships and federal aid, families were often pleasantly surprised how inexpensive it could be.

Let’s take Harvard’s costs, for example. Right now, the tuition, room, board and fees costs over $73,000 before aid. However, based on the IPEDS Data Center, if you, as parents, had an income of between $75,001 and $110,000, Harvard cost $15,553 on average in 2018-2019. For those who earned over $110,000, Harvard would cost $46,160 during that same year.

On the other hand, if you made between $30,001 and $48,000, Harvard would have cost just $1,010 for that time period. Granted, Harvard has a significant endowment, but the point is, you shouldn’t make sticker price the determining factor in your decision.

Merit aid and other aid can help considerably and lower the price.

Tip 2: You should file the FAFSA. (Yes, even if you think you make “too much.”)

First of all, what’s the Free Application for Federal Student Aid (FAFSA)? It’s a form you fill out to find out what the federal government can chip in to help you pay for college. Millions of students and their parents file the FAFSA each year to tap into more than $120 billion in grants, work-study and low-interest student loans from the U.S. Department of Education.

Colleges also use the FAFSA to determine how to award aid to students. The FAFSA asks about student and parent finances, including tax returns, so it’s best if you file the FAFSA together.

Here’s the trap: You might be tempted to not file the FAFSA because your next-door neighbor says, “Don’t file. It’s not worth it because you won’t get any money. We didn’t.”)

Don’t listen to him or anyone else who tries to dissuade you from filing the FAFSA. Check out some startling facts:

  • Students who don’t file the FAFSA leave millions of federal aid dollars on the table every single year.
  • Your family doesn’t have to have a low income to qualify for assistance. Even families that make over $200,000 a year can get financial aid!

Read More: 10 Financial Aid Tips From a College Admission Counselor

Tip 3: Don’t write off a college if you’ve faced financial difficulties.

One in four adults have had trouble paying their bills since the coronavirus outbreak started, and have encountered job loss (particularly those with lower incomes), according to Pew Research Center. Many have dipped into savings or retirement accounts to make ends meet, have had to borrow money from friends or family or have gotten food from a food bank.

Overall, 25% of U.S. adults say someone in their household has lost a job because of the coronavirus outbreak.

Therefore, you may wonder if you should nix what you deem “expensive colleges” because you’ve faced financial difficulties. Again, don’t let sticker shock get the best of you.

Note that colleges (and financial aid professionals) want to work with you. You can also fill out something called a special circumstances form, which you can fill out if you face financial difficulties later on. The special circumstances appeal form lets you document any financial circumstances that change or arise after you file the FAFSA.

Tip 4: Meet with colleges in person.

You should always, always meet with the financial aid office at a college or university one on one. In this era of Zoom college visits, you may be tempted to brush off the idea of visiting schools in person. You may be thinking, “Isn’t a college visit online the same thing?”

Nuh-uh. You can see the campus, sure, but you can’t feel the vibe on campus. However, you can’t determine whether the people are inviting and friendly (remember, you go to college because of the people, not because the buildings are pretty. You can’t make friends with a building!) You can only get a sense of whether you’ll thrive at a particular school if you visit and meet the people.

Furthermore, ask whether financial aid professionals can meet with your family one-on-one as part of your visit schedule. They can go through the costs, available merit-based aid and also even help you file the FAFSA or determine a ballpark figure for college costs that apply to your specific situation.

Sometimes schools that seem so “out there” expense-wise might seem palatable, and all it takes is meeting with staff members at a college or university! To sum it up: Don’t get all your information online!

Tip 5: Know that you can get loans responsibly.

Despite what you may have read or heard on the news or online, your student loans don’t have to be out of control. You can borrow responsibly for the right college for the right amount of money.

In fact, about 42% of students at four-year public universities finished their bachelor’s degree without any debt and 78% graduated with less than $30,000 in debt. Only 4% of public university graduates left with more than $60,000, according to the Association of Public and Land-Grant Universities (APLU).

So, with a solid degree, can you jump on $30,000 of student loans, spread out over 10 years?

Chances are, yes, you can.

Tip 6: You can get creative when you pay the full out-of-pocket amount.

One of the things I did as an admission counselor was work with families one-on-one to take a look at their out-of-pocket costs. The out-of-pocket costs refer to the amount left over after financial aid and scholarships have been added to the full amount. I worked with families to help them figure out how they could effectively break down the out-of-pocket amount. (Note: The college couldn’t offer the students more scholarships for that out-of-pocket amount in most cases.)

I worked with each family to examine several opportunities:

  • Determining how much the student could contribute through a summer job or other wages
  • Penciling out how much parents could add from their regular monthly income
  • Any extra scholarships from the community
  • Using a monthly payment plan to break down the costs (many colleges and universities offer a monthly payment plan, and our college offered a 10-month payment plan over the academic year)

The point is, don’t look at the out-of-pocket costs and completely dismiss a college — or take out loans for the full out-of-pocket amount. You can reduce the costs if you have candid conversations as a family and think creatively about how to handle your out-of-pocket costs.

You can start planning for this cost with Personal Capital’s free Education Planner. This free and secure online financial tool can help you determine the money you’ll need to set aside for this big expense. Link your bank accounts, investments and loans to keep tabs on your spending and know how much you can afford to put toward college.

Millions of U.S. households use Personal Capital to get a grasp of their budget. You can:

  • See all of your financial accounts aggregated in one place and track your net worth
  • Take a deeper look at your investment accounts, analyzed based on your risk tolerance
  • Plan for long-term goals, like buying a house, saving for college costs, or socking away money for retirement.

Tip 7: Use schools’ net price calculators.

Every school offers access to a net price calculator, which is required by law. The net price calculator allows families to enter information and learn what they might pay to attend the institution. Each school’s net price calculator compares information from a previous class and takes grants, scholarships and other aid into account from the previous year.

Research, Then Visit in Person

Now’s the time to start your research — before the school year begins and things get really busy.

When you’re ready to visit campuses, definitely do your online research. (Who doesn’t start there?)

However, remember that there’s a human element involved in the financial aid process that you can’t get from a net price calculator or a computer. As a family, you have a specific set of circumstances that looks like nobody else’s. Until you talk to someone on campus, file the FAFSA and get a financial award, you won’t know exactly how much it’ll cost to attend a particular college. Finally, once you do receive your financial aid award, you can also get creative with how you choose to cover your out-of-pocket costs.

Read More: Money Conversations to Have with Your College Student

As you prepare for this big life change, you can get your finances in order with Personal Capital’s free online money management tools. Be sure to use the Education Planner to better understand and compare college costs, and determine how much you need to set aside while you track your progress.

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Personal Capital compensates Melissa Brock (“Author”) for providing the content contained in this blog post. Compensation not to exceed $500. Author is not a client of Personal Capital Advisors Corporation. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Melissa Brock spent 12 years in college admission and is the founder of College Money Tips. She also writes financial content and loves helping families navigate the college search process.
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