Daily Aid 32: FAFSA EFC and the CSS Profile – How Much You Can Pay For College
Daily Aid 32: FAFSA EFC and the CSS Profile – How Much You Can Pay For College
Student Financial Aid News
From Inside Higher Ed:
At Shenandoah University, there have been a few senior-level administrators who have decided to forgo their raises altogether, placing the money in an emergency fund that is being used to help existing students who are struggling to afford to stay enrolled.
Commentary
I applaud anyone who is willing to take a pay cut – and forgoing a raise when inflation is eating away at the bottom line is effectively a pay cut – to help students stay enrolled. That said, it might be more cost effective for Shenandoah and other colleges to reduce the overall cost of education at the top line.
One of the things I think you’ll see become very prominent in the next year is a trend towards finding the most affordable solutions to pay for college possible. Everything from testing out of classes to early graduation to distance learning and online degrees is on the table as students, parents, and families try to figure out how to make college more affordable.
Looking at the many options before us, I’d suggest this strategy for right now.
1. Earn as many scholarships as you can. Free money can’t be beat. Scholarship Search Secrets, our free scholarship eBook, goes to “press” next week.
2. Start saving as early as possible. Save money like crazy. Cut back on discretionary expenses. Put money away. Use as many money saving strategies as possible.
3. File your FAFSA as early as possible. I’m almost done with the 2009-2010 FAFSA guide based on the draft FAFSA, and this year’s guide is going to be more detailed than ever, line by line.
4. Talk to your college about which courses you can test out of using CLEP exams or your school’s own credit-based exams. Prep, then test out of them to reduce cost per credit hour and get basic courses out of the way.
5. If you can manage the workload, work during the summer AND take either an online degrees/distance learning course or two, to earn some credits. If you’re not set up for an online education experience, check in at your local community college about credit transfer and take a class at night.
6. Only after you’ve been able to reduce the overall cost of your education should you look at borrowing money and taking out student loans.
One final piece of opinion: if you think that a community college offers a lower quality education than a traditional school, you’re almost certainly wrong. When I was working at AT&T back in 1998, I took a C++ course at Raritan Valley Community College, not too far from where I was living back then. The instructor for the course wasn’t some hack who couldn’t cut it in a traditional school – the instructor was a senior programmer at AT&T who moonlighted as a college professor. She was one of the best professors in computer science I ever had, because in addition to being able to teach, she was also able to explain the material in very concrete, practical terms. Her day job required her to make practical use of her knowledge on a daily basis, and for me, being able to ask very specific, task-related questions and get experience-based answers was invaluable.
Don’t overlook your local community college. You’d be surprised what you’ll find there.
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Mail Bag
In the past few days, I’ve suddenly been swamped with calls and emails about a question on the CSS Profile, a fee-based financial aid form similar to the FAFSA used by some colleges. The specific question is how much are you willing to contribute towards the cost of education?
The answer I’ve been giving people is that this is a number the FAFSA already comes up with, called the Expected Family Contribution, or EFC. The EFC is based on a whole slew of questions about your family’s finances and represents the government’s guess about how much you can afford to pay for your education.
For some families, this is zero. If you receive a zero expected family contribution result from your FAFSA filing, put the same down on the CSS Profile. For some families, this is thousands of dollars. Chances are, your college will compare what you put in that line with your FAFSA results, so if you put down anything besides the EFC, you might be asked to justify it. In some cases, this will be easy to do – for example, the FAFSA does not take into account debt you currently carry, including mortgage and other debts. Thus, an EFC in the thousands might translate into more money per month than you can possibly afford.
Here’s how I’d suggest you tackle this. First, take your EFC, whatever it is, and break it into a monthly cost. If your FAFSA EFC is $24,000, then you have an effective monthly EFC of $2,000. Put together your personal budget and determine what the mandatory expenses are – rent/mortgage, utilities, etc.
Subtract only the mandatory expenses from your monthly EFC – thus, if you pay $900/month in rent, $100/month in utilities, $200/food (NOT dining out, just groceries), you have a mandatory expenses sum of $1,200. You need a place to live, food to eat, and heat so you don’t freeze to death in the winter.
Take your EFC minus your mandatory expenses, multiply by 12, and that’s what you should be able to contribute towards paying for college. In this example, that’s $2,000 – $1,200 ($800/month) * 12 = $9,600.
When you go before your college’s financial aid office, because mandatory expenses can be easily documented, you can show a simple budget worksheet to your financial aid officer to show why the EFC is wrong for you.
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My one complaint about the FAFSA:
Give me a checkbox that says “I attest that my income level exceeds that which would qualify me for federal aid such as grants. My application should only be considered for student loans”, and then zap out the entire financial history section that is irrelevant for about 90% of adult-education applicants such as myself.
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