Last week, the Department of Education released the FAFSA Formula Guide for the coming FAFSA. Before I give you that link, I want to share some basics about the FAFSA. I’ll also break out each section of it in depth in the coming weeks– hopefully before the new FAFSA arrives on Oct. 1. Continue reading EFC Formula Guide 2020-2021 & FAFSA Basics
Drop Off #1 in the Books
Well, we did it—Alex is off to college! He moved into his dorm on Thursday and classes started yesterday. How did it go, you ask?
It was a whirlwind—enough that I *almost* didn’t have time to get sad. There were the final attempts to bubble-wrap him before he left (“Do you want knee pads for your skateboard?”), the parting shots of hard-earned knowledge (“No one empties the lint Continue reading Drop Off #1 in the Books
AOTC vs EFC
It’s not unusual for different strategies to be more helpful at different points in the college savings/funding process. Retirement contributions are a perfect example. Continue reading AOTC vs EFC
The Common App and Coalition App
The Common App and Coalition App are available now. It’s summer (at least here in Oregon it’s still summer), so why should you care? Looking now can give students a fuller sense of all the pieces they’ll need to assemble for their applications. Based on our experience and recommendations from guidance counselors, I’d suggest starting with the Common App. Continue reading The Common App and Coalition App
Loan Payments in Grace Period
Upon graduation, student loan borrowers have a 6 month grace period during which time no loan payments are required to be made. Sounds great, right? For many borrowers with “getting started” expenses like security deposits and moving expenses, the grace period can be a real lifeline. However, any payment you can make during the grace period is highly beneficial because unlike a traditional loan payment that is part principal and part interest, a payment during the grace period results in a dollar-for-dollar reduction in the loan balance. Huh? Continue reading Loan Payments in Grace Period
Better EFC Strategies
I get tons of questions about strategies for reducing EFC, especially those related to the Asset Protection Allowance. And there are plenty, but sheltering assets is typically the lowest bang-for-the-buck strategy out there: Every $1,000 you shelter will only reduce your EFC by $54. And that assumes that the school will meet your full need. Here are some better options: Continue reading Better EFC Strategies
Net Price Matters More
What do the numbers $7,000, $42,000, $44,000, $56,000, $58,000, $72,000 and $81,000 have in common? Each is a net price estimate (rounded) that we received from a different college, using the same data inputs. That’s one example of why one might reasonably argue that Expected Family Contribution (EFC) is of marginal significance. Continue reading Net Price Matters More
Does EFC Matter?
When you start looking at specific colleges, net price calculators are the best tool to figure out how much the school will actually cost– especially since they will show the aid package including self-help aid (loans and work study). Anyone who has gone through this process knows that the net price tends to differ quite a bit from EFC. And only the FAFSA provides an EFC, so you’re definitely going to get a different cost from a school that requires the CSS Profile. Which begs the question, does EFC matter? Continue reading Does EFC Matter?
What to Expect in the 2020-2021 FAFSA
Last month– as it does every May– the Department of Education released its Needs Methodology for the coming FAFSA. The Higher Education Act of 1965 requires that the Income Protection Allowance, Adjusted Net Worth of a Business or Farm, the Education Savings and Asset Protection Allowance, and the Assessment Schedules and Rates be updated annually for inflation. Continue reading What to Expect in the 2020-2021 FAFSA
Community College as a Pathway to a Four-Year Degree
Community colleges are often promoted as a great way for students to start on the path to a four-year degree: they’re lower cost than four-year colleges and it’s more likely the student can live at home to save additional money. However, a recent study showed that while 81% of students entering community colleges aspired to a bachelor’s degree, only 14% actually earn one within six years of starting at a community college. In fact, only 1/3 of community college students in the study’s cohort even transferred to a four-year institution. Continue reading Community College as a Pathway to a Four-Year Degree