Thursday, March 26, 2015

After The Thrill is Gone: Financial Aid Part II

"What can you do when your dreams come true and
it's not quite like you planned?... After the thrill is gone"
- Eagles, After the Thrill is Gone

I imagine a lot of students, and especially parents, are having that feeling about now.  The excitement and pride of seeing that big envelope arrive and the joy of being admitted to your top choice for college begins to be replaced with the financial realities of paying for college.  As financial aid awards arrive, confusion and uncertainty can quickly set in.  For many, it's not quite like they planned at all. Before the thrill really does fade away there are a couple of important things everyone should consider as they look at those aid awards.

Cost of Attendance:  One of the numbers you will find on your aid award is the Cost of Attendance, or COA.  Remember this is not the amount you need to write a check for.  It is meant to be an estimate of what it realistically might cost to attend for the full year. Everyone's actual costs may be different and there are things you can do to lower those costs.  For example, there are standard allowances for travel, living expenses, and books included in the COA.  Each of those may vary greatly from student to student and each family should try and estimate their own budget.  (For purposes of calculating financial aid, however, financial aid offices are required to use a standard set of costs as an estimate).  Tuition, fees, and room and board costs (living on campus and having a meal plan) are the "fixed costs" that will need to be paid each semester.

Expected Family Contribution (EFC):  This is the result of completing the FAFSA and the federal formula used to determine a family's need.  As imperfect as it may be, it is the number colleges are going to subtract from the cost of attendance to determine how much need you might have at a particular school.  If there are special circumstances (beyond the fact that you don't agree with it), let your school know.  They may be able to make adjustments to your award.  For example, if a family owns their own business and there are large fluctuations in income from year to year; if there are special medical expenses that might not have been reflected on the FAFSA; or if family circumstances have changed since filing the FAFSA - these are all situations you should bring to the attention of the aid office.  However, simply not agreeing with how much you are expected to contribute is not reason enough (although a lot of families will not agree with their EFC!).  

Borrowing:  A lot has been written about student and parent debt.  It is a serious issue, but the fact is that the vast majority of students borrow money to go to college, get good paying jobs, and pay those loans back.  (USD's default rate is among one of the lowest in the nation at less than 2%).  Borrowing amounts through the federal government are set, and provide low interest opportunities to help offset the cost of attending college.  Parent borrowing is a little different.  PLUS loans are credit based and likely to be found in almost all of your awards.  It does not mean that parents should automatically think they have to borrow the full amount, it means that is what you are eligible to borrow.  

Something else families should know about their aid package.  Colleges do their best to spread their financial resources as effectively as they can.  USD, like almost all private institutions, cannot meet all the demonstrated need for all our students.  As I've written about before, we have enrollment goals and priorities to meet and we not only consider those priorities in selecting our class, but in allocating financial aid, too.  Why this matters is that families will sometimes assume that each institution will meet all of the demonstrated need they have (calculated by subtracting EFC from COA - see above).  This is not always the case.  Often, only a percentage of that demonstrated need will be met. This is where parent loans come in - to close the difference.  Each family needs to decide how much they are willing to contribute to their child's education and weigh the costs versus the benefits of attending a particular school.  I encourage you to check out our information at

Payment Plans:  Most schools, certainly USD, have payment options that spread out payment over the course of the year.  These can make a large balance much more manageable.  For more information about how this works at USD, visit

Investment:  Perhaps there is no greater way to invest in our children than to help them obtain a college education.  As I mentioned earlier, each family needs to make a decision that fits their own priorities and budget.  Among the considerations in determining value are graduation rates, average starting salaries, job placement rates, acceptances to graduate schools, but there are many others.  In addition to the pages above, please visit our career center pages, parent and alumni pages, as well as the financial aid section of our website for more information about investing in a USD education.  

Hopefully this helps you look at those awards in a new light.  Ultimately, each family needs to make a sound financial decision.  Our staff is available to help and we wish you well in deciding.  Rather than feel like the "thrill is gone", we want you to have that "peaceful, easy feeling" as you make this important decision.

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