March Madness: College Admissions Style

Today is March 1, and we have now moved from the "Dog Days" of February (as I described in my last post) to our own version of March Madness.  In the next few weeks (next week for USD), schools will begin sending out their regular decision acceptance, deny and wait list letters.  This will be a difficult time as many students deal with disappointment while others will be thrilled to get good news from their top choice.  It's always a difficult period for the admission staff, too, as we have to turn away so many wonderful students.  We know, however, that there are other choices and whatever happens over the next few weeks, we hope everyone remembers what I talked about in an earlier post; that this will all work out OK and everyone will find a good place at the end.

Once those letters go out and families have their list of acceptances, the next challenge begins - how to pay for college. Tomorrow is March 2 and it is the priority deadline for completing the Free Application for Federal Student Aid (FAFSA).  This must be completed for any family hoping to be considered for need-based financial aid.  If you haven't yet done this, please visit http://www.fafsa.gov/  and complete this very important form.  You need to make sure you identify the schools that you want to get the results.  You don't need to have completed your taxes, but you will need last year's family financial information. 

If you're like most, this part of the college search process causes the most anxiety.  As a parent of a college freshman, I can still remember feeling overwhelmed as the reality of paying for tuition, room and board, and the many other costs associated with going to college came upon us.  However, there are resources that can help and like many other things in life that can cause stress, there are certain things you can do to prepare and manage your expectations about paying for college.  Unfortunately, many families come to this part of the process with unrealistic expectations about what their responsibilities are and what they can expect from the college.  This can cause additional stress for everyone involved and often leads to disappointment later on.

One of the first principles of financing a college education is that the primary responsibility for paying for college rests with the family.  The financial aid system has been built around the premise that each family will contribute what they can toward their child's education and additional help may be available for those that need it.  The FAFSA is intended to provide some way to measure what that contribution is and it is reflected in the Expected Family Contribution.  This figure is often the source of disbelief for many families.  They tell us that there is no way they can contribute what the federal government has said they should contribute.  This may be so - it is an imperfect system.  However, this is how colleges and universities are going to determine the amount of aid you are eligible for.  Each school has the flexibility to adjust that figure, using professional judgment for special circumstances, and some schools even require additional forms, such as the College Board's Profile, which enable it to collect additional information and perhaps reach a different conclusion about a family's ability to pay.

But it is the family's ability to pay that is at the heart of this process.  That is different from a family's willingness to pay, and it is around this distinction that we have many conversations with families.  When my wife and I were considering where our son would go to school, we always had the belief that his education was the most important thing we could invest in.  We knew that we might not qualify for very much aid (our FAFSA results confirmed that), but it had always been our intention that we would sacrifice and prioritize spending to invest in our kid's education.  It is important for everyone to keep in mind, that even if you may not feel the same way or place the same value on education, most colleges and universities will make that assumption and financial aid is typically administered around that principle. 

Once you have completed the FAFSA and the assumption about how much you as a family should contribute to your child's education is made, each school will then put together a financial aid award based on how much is left over.  The simple formula is the total cost of attendance (tuition, room and board, fees, other costs such as transportation, general living expenses, etc) minus the family's contribution (Expected Family Contribution) equals a student's need to attend that particular school.   While that seems like a simple formula, it is executed differently at each institution depending on the size and quality of the admitted student pool, the financial resources of the school, the availabilty of merit scholarships, federal and state aid, and many other factors.  This is why you will find that each school that your child has been admitted to may present you with very different financial aid awards.

You should carefully review and certainly compare those awards.  Be sure to know what the terms and conditions of each award are, understand the loans that you will be expected to take, and what the actual cost will end up being for you on a month to month basis (most schools have payment plan options - ask about them if they don't tell you).  Just like we have been talking all along about finding the right match for your student, this is another point of "matchmaking" - each family is going to have to find the right financial match after the careful review of these awards.

This is where each family's willingness to pay comes into play.  As you look at the educational opportunities of the schools you are considering, there will be a value proposition made with regard to each award.  Does attending a school that maybe offered you less money seem to be a better value than choosing the one that gave you more money?  Only your family can decide that, but once a school has provided you with its financial aid package, it is important to remember that this does not signal the beginning of a bargaining session.  Schools are not going to negotiate an award so that the bottom line becomes more favorable to you.  We make these awards, as I mentioned earlier, within the context of our enrollment goals, our financial resources, aid policies and strength of the admitted pool of students.  We do our best to help families afford the investment and we can consider changes in a family's situation or special circumstances, but our award reflects the help we can provide to each family within our means.

This is a very difficult time for many families and it can seem daunting to think about the cost of higher education.  But there is perhaps no greater investment we can make for our children and by considering all the possible ways we can gather resources - loans, private scholarships, work, etc - this investment can sometimes be more manageable than it might first appear.  Next time, we'll talk more about other ways to help finance an education and how you can assess the value of a school relative to those awards.  For now, good luck as our decisions begin to make their way to you. 

Let the madness begin...