Paying For College

I have 2 teenage boys, and I think they are both headed to college very soon. The reality for the oldest is getting hard-er to ignore everyday. At some level, I have known this will happen for the past 15 or so years. At another level, it is some future problem to be solved by somehow more knowing future me. However, I’m not sure my what magic I had expected to suddenly know what the hell is going on with the cost of school and expectations of parents.

The high school had a ‘paying for college’ night. I learned nothing, and I was only reminded that I needed to fill out the FAFSA. Supposedly, the government would tell me what schools could reasonably expect me to pay. By what measure do they make such a determination.

What if I have a great deal of savings but they are intended for retirement? What if my income is good but I don’t have much in the way of savings? What if my income is good the year before college starts but is suddenly zero?

The I in each of these is a hypothetical parent, not my circumstances exactly. The more I thought about it, the crazier all of it seemed. Of course, I can choose to do whatever I want and no policy can make me support my offspring after the age of 18. Okay, so now assume I do nothing - what kind of impact does that have on my kid’s future debt and earnings? Shouldn’t he bear the cost of his higher education? Wouldn’t it make more sense for him since he has more working years ahead of him to pay it off.

so many questions

I decided that what makes the most sense is to try to help him navigate colleges to identify schools which include his key research areas but also are not overly expensive. We read every college’s financial page and came away about as clueless as we went in. Most colleges identify their tuition costs right up front: It costs X dollars to attend (with some options for being a resident or part of some group). However, the same page would say something like, “88% of students receive financial aid.” Ok. How much aid. Would it be just as costly to attend this school with an advertised cost of 25,000 per year as another school with an advertised cost of 40,000 per year?

What is Aid?

Essentially, financial aid is something that comes in to cover part or all of the cost of college. There are different kinds: loans, grants and scholarships, and other.

Loans

There are a myriad of packages for college loans. Essentially, they are so that you can get college today and pay for it tomorrow. Federal loans are the most popular, from what I can tell, but there are also other institutions to do these loans.

Grants & Scholarships

I see grants and scholarships mentioned separately all of the time, but they are equivalent to me: money that you do not have to pay back. Kiddo could “win” a scholarship that might pay him or his school some money to offset the cost. There are so many different ways to find them, like from the Career OneStop. The actual task of applying falls on the kiddos. Who just had to fill out all of their college applications. This money is “free” with no need to pay it back later, unlike a loan. However, many grants and scholarships have some expectations for what you will do with the money and/or what you will study or achieve after college. Looks to me like lots of fine print.

Other

Some aid is like a grant/scholarship but done behind the scenes. One of my favorite of these that I’ve found out about is the state consortia groups. We are in Washington, so we can benefit from the Woowee - Western Undergraduate Exchange (WUE)[https://www.wiche.edu/wue]. This reduces the cost of out of state public schools if you meet minimum academic criteria. This kind of aid is not based on your financial need or a separate application.

What Must You Do?

I’m still not completely sure. So far, I’ve got that you must:

• Fill out the FAFSA - this is a bigger task than it seems because you need to have past tax records and records of all current bank and investment accounts.
• Send the FAFSA to all schools to which you apply - you have to get the school code and submit it.
• Fill out the additional school specific aid form (if any)

You need to do all of these things by a deadline that is close to but not always the application deadline. At many of the schools where we looked, the financial aid application had to be submitted before the last admission application for ‘priority consideration’. I don’t really know what ‘priority consideration’ means in this context. It may mean that the school will distribute some amount of aid, but if your aid application is received later, you may not have the same aid package as you would before.

Aside on College Costs

There are so many other costs that hit you junior and senior year associated with college. The College Board has opportunities for fee waivers for qualifying households for exam and score reports. Many colleges offer application fee waivers.

AP Courses: We have spent more than $500 on test associated with these courses, but some high schools pay all or part of testing fees. Each course has a fee of $94. Students can send one free score report, others are $15 (or $25 if you are in a rush).

SAT Tests: The regular test costs about $45 without essay and $65 with essay (required for many schools). Each score report is an additional $12.

SAT Subject Tests: The subject tests (required for some schools) are about $25 per test with a $25 or so registration fee. Each time you send these subject test scores (each test) will cost $12.

Application Fees: Application fees have ranged from $40 to $80. Applying to several schools makes this easily another $500.