When my son first applied to college, I was terrified, in particular, of one of the many jobs that we had to attend to: in fact, I was so terrified that I put it off until June of the year he was to enter. Imagine my surprise when I completed the task fairly quickly. What is that task? It is the FAFSA form. FAFSA stands for Free Application for Student Aid and is a necessary step in obtaining ANY kind of aid -- government subsidized or private student loans. Until you fill that out, you cannot get a loan of any kind -- and, if you qualify for aid, the sooner you fill it out, the more likely you are to receive that aid. The money available is in short supply, and it can run out.
Why was I terrified? When I went to college, we were poor -- my parents sold men's clothing in a farmer's market. It was a cash business that did not leave any room for extras for the most part and certainly did not allow my parents to afford to send me to private school (even in the days when tuition cost the equivalent of a mortgage payment today). So, if I wanted to go, I had to get scholarships and aid. And my mom and I filled out these mammoth forms together -- it was time-consuming and so difficult for my teenage mind to comprehend: plus, I had to do it year after year after year -- through college and graduate school -- seven years of FAFSA. In those days, it was done by hand, of course, and it seems like it was one billion pages long.
For those of you who are new to FAFSA, take heart. It is not nearly as painful as it was -- you can fill out the forms on line and, if you have last year's tax returns done, you can actually do it fairly quickly. If you do not have last year's returns yet, you can still get a jump on the process by using 2005's returns and "estimating." Then, you can fill in a corrected form later.
What's the process?
You need to get a PIN number to sign the form electronically -- you should get PIN numbers for you, your spouse and your child who is going to college. Those numbers will be useful later when applying for and signing loans, etc. The process of getting a PIN can take a few days, so, if your child is going to college this year, jump right onto the site now, and start in the area that tells you how to get a PIN. The site is www.fafsa.ed.gov. At that site, you will also find ALL the information that you need to gather the necessary information to fill out the FAFSA as well as worksheets and directions.
It may look complicated, but, if you fill out the worksheets, it is actually fairly simple. If you know where your child is going to school, you can send the FAFSA to that school. If you do not know, just fill it all out and go online later to have it sent to the school the child will be attending.
After the FAFSA is processed, you will get back an EFC. This is an Estimated Financial Contribution -- and, it will make you laugh if you are a middle income person with a decent income -- but not a person who has $20,000-$40,000 to spend on sending your child to college. It will not make you laugh in a ha-ha way, but, in a "If I don't laugh, I'll cry way." The federal formula is pretty tight and what it estimates you can pay, and what you actually would have available to pay are pretty different things. Do not despair. Even if you do not qualify for any aid, including subsidized loans, you and your child can take out private loans -- although, at the moment, the interest on such loans is over 8%.
Do not assume that the FAFSA is the only form you will need to fill out and send to your child's school. When you decide what school the child is going to, you need to call the financial aid office and ask them what else you need to do to ensure you get your need-based or non-need based loans.
Also, do inquire into merit scholarships at all the schools your child may wish to attend. We were fortunate that the school my son wanted to attend had an automatic merit scholarship program (if you applied early enough to the school), and, his merit scholarship was included in his acceptance letter. We also checked if there were any other scholarship opportunities available to him there; however, there were not. So, we funded the rest out of our own pockets and through loans -- it's a killer, but he is going to a good school, with 1/3 of the tuition paid for, and, hopefully, it will help him to get a good start in a career.
Tuition at colleges is ridiculous, and, then, there are other fees and expense to account for: again, when you see the bill, you will bawl like a baby. There's room and board (if they are living on campus), fees for athletics and health services and some other things that only the schools will think of, books and, in our case, a big expense has been transportation to and from school and home (plane fare). Plus, while your child can work (perhaps at school in a work-study program or at an outside job), if you don't feel like they should work their first year or so, you will have to give them spending money. So even if you have saved, there are "hidden" expenses that you should think about when you decide whether or not to apply for a loan. If you do not have health insurance that covers your child, you will probably have to pay for the school's health insurance; however, if your child will be insured, you might be able to save some money by obtaining a waiver of health insurance.
Remember, without the FAFSA, you will not likely get any sort of assistance even if you are entitled to it. So, jump right on the site and get your form started right now. You may also want to get your 2006 taxes done as early as possible this year since you will need to get the FAFSA finalized and the sooner you can cross that off your list, the better you will feel.
The first year my son went off to school, I was a nervous wreck about a lot of things -- but, the one thing that really fueled my anxiety was the issue of how we were going to pay for his schooling. We found the right school for him and we wanted to give him an education that would be worthwhile in a place where he would be happy. We made the right choice about the school, but I fretted so over doing the paperwork to apply for the loans that we absolutely needed to pay for his schooling, that I basically made myself sick.
Take it from me: it is not worth getting sick over. Just start the process now and you will have a lot more time to insure that your funding is in place and you will sleep much easier. Trust me: I worried his second year that for some reason, additional loans would be denied. They were not. This year, I have vowed to do the whole process as soon as my tax forms are done, and, since I now am in control of my documents and my money, it should be easy.
Plus, save feeling ill for all the times you have to shell out more money for the next four years (plus each additional child). That's plenty of illness.
My daughter is going to college beginning in Fall 2008 -- for one year, I will have two in college. We are beginning now to look for all sorts of scholarship opportunities and so forth -- I will be updating the site to reflect sources of funding that I find of which some of you may not be aware. A brief search of the web turned up a number of scholarships for all sorts of accomplishments and even certain backgrounds that exist outside of what each individual school offers. We will be looking into that and applying for whatever is suitable for her. Although it may be a difficult process, it is better than doubling up our debt.
And remember, the financial experts all recommend that while you want to send your kids to college, you should not do so at the expense of your own savings: thus, you should assume that you will continue your regular contributions to your retirement savings while you take on this additional burden. Start now to figure out how you will do that and you will be much better off when the expenses start.
The tough choice is deciding that you do not have enough for the school your child chooses. Do you mortgage your life for your child's future? Remember, there are a lot of people in great jobs who are very happy having gone to state and local colleges. Some people go for part of their college careers, others get four-year degrees. These are all the sorts of choices you need to make based on individual characteristics of yourself and your child. Some people will do anything to let their child go to the top schools, others do not want to shortchange the rest of the family while allowing the college child this opportunity. It is not a clear-cut issue unless you have saved enough to send them to the most expensive schools (in which case, good for you and I mean that from the bottom of my heart). One way you can save is through a 529 account as I have written about previously.
But not all people can save enough for full tuition at a four year state school, let alone a private school. And not everyone sees it as their top priority -- I cannot say for you. But in my state, state schools run about $17,000.00 per year with room and board -- no lie. This is still about half of the average cost of a typical private school. Some of the most expensive private schools are above $50,000.00 per year with everything. But some states have programs that allow in-state residents free tuition. And some top state schools are still much less costly than private schools for out of state students ($25,000 - $30,000 per year). You really have to weigh all the factors when choosing the right school -- at this point, much as many of us hate it, money is a factor.
There are a lot of issues surrounding sending your child to school. If money is the least of those issues, that will make the whole transition much more smooth. Enjoy this new phase of life for your child and yourself. It really is amazing how they grow and change from this experience. We are very proud of our son and his growth since he has been away. We miss him, but it really has been an amazing time for him. We know that we have made the right choice to invest in his future -- we know that he will find a suitable career to start out in and will have the skills and personality to get a good job. The kind of peace of mind that kinds with knowing that your child will be able to be self-sufficient really should also influence your decision. Like other things in life, sometimes, expenses now are payoffs for the future: education is one of those things.