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As the time approaches for spring or summer breaks, many college students are getting ready for that much anticipated trip abroad. Most will have a safe and enjoyable adventure, but for some the trip will become a nightmare. A number of vacation
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College Bound: Online Shopping Solutions
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Options For Designing A College Savings Plan For Your Child’s Higher Education
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The College Student's Guide for EASY WEIGHT LOSS!
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Writing The All-Important College Application Essay
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College Funding 101

You have a child who is approaching college age and now you have to face what you've been trying to avoid for years: how to pay for that college education! Most parents remember when college tuition, room and board could be had for under $5,000 per year. Now, the price of many private institutions hovers at (or above) $30,000 per year. Multiply that times four years and we're talking about a home mortgage rather than an education! Before you are tempted to send your son or daughter straight to the work world, there are some basics of financing a college education that you need to understand.

According to the Higher Education Act of 1965, which is the law that governs student aid, it is the parents responsibility to educate their children beyond the 12th grade. Most importantly, the law also states that if a family can demonstrate need, then the government will assist in paying for such an education. How is need determined? The basic formula is simple:

Cost of Attendance - Family Contribution = Financial Need

Cost of Attendance The first component of determining your financial need is to determine the cost of attendance. The financial aid administrator at each college develops an average cost of attendance for different categories of students. This will include tuition & fees, room & board, books, transportation and miscellaneous expenses. Bear in mind, this cost can vary somewhat for students in different situations. For example, the New Jersey student attending college in California will obviously have higher transportation expenses than the California student attending the same college.

Family Contribution The next part of the formula is the Expected Family Contribution, or EFC. It is determined by the need analysis methodology as prescribed by federal law. The EFC is the amount you will be expected to contribute towards your student's educational expenses during the academic year. It must be recalculated every year. The Free Application for Federal Student Aid (FAFSA) is the method used by most colleges for gathering the personal and financial information necessary to calculate your EFC. This method takes into account your income and

 


liquid assets which, theoretically, could all be available to pay for college. One point to be aware of is that your family's EFC does not vary with the number of students in school at one time. There was a time where I thought it was a good thing that my kids were spaced four years apart. Now, I realize that did not work to my advantage in the college funding game! So, for the parents who will have multiple students in school at the same time, this is very good news. Many colleges have financial aid calculators on their web sites which can give you an idea of what your EFC will be.



Financial Need So, let's do the math. If your daughter applies to a school with a $30,000 cost of attendance and your EFC is $16,000 per year, your financial need is $14,000. This need can be met by a variety of federal, state and institutional grants, federal work-study monies and low interest student loans. Of course, you will want to look for colleges which have a history of giving good financial aid packages which may even be above your calculated need.

Other Items to Consider * Avoid the scholarship search game. Of the $117 billion in financial aid available in 2004-2005, less than 1% came from private scholarships (most aid comes in the form of the aforementioned grants, work-study programs and loans). Many families waste a lot of time and effort going after that small slice. * Always apply to at least four to six schools that are rated equally. This way, if your child gets accepted to them all, you may be able to negotiate for a better financial aid package. Don't be afraid to appeal for a better financial aid package! * Increase your income! Obviously, even with the financial aid that is available, college will still be a stretch for most families. You may want to consider starting an on-line business. There are many people supplementing their incomes on the internet. Stay away from get-rich-quick schemes and do your research first!

About the author:

Dave Keegan works full-time as a systems analyst for a large corporation and has quality ideas for helping people get started in internet marketing. For more information, visit: www.dkeeganonline.com