“Are you college ready?” It is one of the more popular terms and cliché’s that is used throughout America. To the average parent and student, the term college ready can is often defined as how good your grades are in school, your score on the SAT/ACT, extracurricular activities you’re in and if you were the president of your Kappa League, student council or even the glee club. Ironically, and in many cases unfortunately, the most important question is the one never asked: “Can you afford college?”
That is why it is important for every student and parent to approach their college selection as a business decision. Because tuition has skyrocketed student debt it is just as important to look at a college based on its impact on your bottom line as it does on your career opportunities. Since this is January, many of you have already been accepted to your college choices. So here are some key suggestions in making the best business decision for your future.
I. Compare College Financial Aid Packages
Line each of them up side by side and answer the following questions: How much are you getting in student grants and scholarships? How much are they giving you in loans? Are they loans subsidized or unsubsidized*? What about work study**? And, of course, how much do you have to come out of pocket***?
Ok let me break this part down for you:
*Subsidized vs. unsubsidized. A subsidized loan is based on financial need and has the interest paid for by the federal government and is eligible for deferment. An unsubsidized loan is not based on need and the interest must be paid and may not be eligible for deferment.
**Work study should NOT be considered as either a grant or a loan. It is solely the amount an institution predicts the student would be eligible to make if they work. So consider this as money you will have to come out of pocket.
***This may seem simple. But many parents-especially if their children are the first to go to college-may not have created a budget to cover costs. Fact of the matter is, you will have to come out of pocket for something. Therefore you must determine how much you can afford to come out of pocket.
II. Complete the FAFSA Now. Not Now. RIGHT NOW!
One of the biggest mistakes students and parents make is waiting until the LAST MINUET to complete the Free Application for Federal Student Aid. I could go on forever why this is a mistake but let me sum it up like this. Say you were on an island with 1,000 other people with no food and someone dropped a pizza pie into your group. Would you wait until later to get a slice? No! Well consider the FAFSA form the same way. The longer you wait, the less of the pool of aid there is for you to qualify for. So you need to make sure you apply for aid now.
III. After you have completed the FAFSA Form You Must…Wait…Hold Up.!We are Staying Right Here!
We are going to stay on the topic of the FAFSA. Why? Because while many of you may have nodded your head at what was said above, you STILL haven’t started your FAFSA application. So before we do or say anything else, let’s get this done first.
Step 1. Go to https://fafsa.ed.gov/
Step 2. Click on “Start a New Application” https://fafsa.ed.gov/FAFSA/app/fafsa?locale=en_US
Step 3. Follow the instructions. Should you get confused or stuck, you have three options:
Option 1: Call the Financial Aid Customer Service Office: 1-800-4FED-AID (1-800-433-3243) or 319-337-5665 8am-10pm EST Monday-Friday
Option 2: Chat Live with them: https://fafsa.ed.gov/help.htm
Option 3: Email: FederalStudentAidCustomerService@ed.gov
Suggestion: It’s best to either call or chat with them as you are completing the FAFSA form. Forgetting or confusing something can result in delaying your financial package or lowering the amount you were eligible for.
Step 4. Review the package. Press send and follow up with the colleges to make sure they have received your financial aid package.
Of course there is so much more regarding financial aid including topics such as scholarships, grants, retention rates, etc. But determining whether or not you can afford the institution and then completing your financial aid forms are the main priority.
IV. Think with your head first then your heart.
Yes I know. You’re nervous that you may not be able to afford the university that you have dreamed about attending for so long. Trust me I understand. But, at the end of the day, the challenge of college is not about getting accepted but being able to afford it. And if you cannot afford it, it’s just as bad as being rejected only with a lot of debt. You must approach your decision in a business-like manner. Does it make sense financially? Is it realistic? Does it meet my bottom line? These are the questions you must satisfy first. Once you have done that, then think with your heart and choose the college best for you. Remember choosing your college is not just about where you are accepted but what you can afford. It’s a tough decision indeed, but tough decisions are all a part of growing up.
Welcome to the real world.