Our college planning services focus on clarifying parent’s misconceptions, helping them save money, time and aggravation and the advantages of using a college advisor.
- “My child will borrow as much money as needed through low interest student loans to pay for their tuition costs”
Reality: Government student loans are capped. An undergraduate can borrow only $27,000 over four years. The current interest rate for school year 2018-2019 school year is 4.45% for the Direct Stafford Loan.
- “My child will get some type of merit scholarship”
Reality: According to a survey by The Wall Street Journal, 92% of Financial Aid Administrators say that parents over estimate their child’s scholarship eligibility. According to the College Board only 15% of college students receive merit scholarship money based on their SAT scores and grades compared to 85% receiving need-based aid college financial aid.
- “Financial need based aid from the colleges are only loans.”
Reality: Between 60% – 70% of all financial aid packages will be free money in scholarships that does not have to be repaid by the student or the parent
- My home equity is not an asset for financial aid eligibility”
Reality: Yes and no, publicly funded universities using the FAFSA financial aid form do not include home equity in determining financial aid eligibility. Private Colleges using the CSS profile financial aid form or their own financial aid form do include home equity as an asset. Some schools cap the value based on a formula. All regulations are set by the College Board.
- “We will get no Financial Aid! We make too much money. No use in applying.”
Reality: 65% of parents incorrectly assume they will not receive financial aid, giving up before they try. 50% would have been eligible for free scholarship money.
- “We will first exhaust our savings to pay for our children’s college!”
Reality: You can borrow for college but not retirement. It is best to hold on to your cash for the first couple of years.
- “We will pay the tuition bill one year at a time!”
Reality: For 90% of families, they will pay for college like other large expenses, over a period of years, generally 15 years.
- “With two children in college we will have to pay twice the amount!”
Reality: The Federal Financial Aid formula calculates the expected contribution for the whole family. If the government says a family can afford $20,000 per year, it is $20,000 for one child in college or $10,000 each if there were two in school at the same time.
- “If we send our children to an out of state public college we will have him or her become a resident of that state to qualify for in state tuition.
Reality: Each state has the individual requirement; some, such as NH, restrict any change of residence by an undergraduate. Florida on the other hand will allow it after one year if the student meets their 11 point qualifying standard
- “We will have our children apply for financial aid as an independent student.
Reality: The FAFSA Form spells out clearly the criteria for a student being declared independent from their parents for financial aid purposes.
College Planning Services helps prepare parents for the long term consequences of sending a child to college.