College Costs – Let Me Count the Ways

College costs are a leading topic of conversation in the higher education realm, especially when FAFSA season rolls around. It’s human nature. At tax time the talk is about taxes, at Christmas it’s about all the money we’re putting out on gifts and so on. When it’s in, it’s in.

Putting Off the Inevitable

Right now there are even more college cost conversations underway, many that have sat dormant and now are all rising to a big head. Each year about this time parents have the job of sitting down and completing their college-bound kids’ FAFSA form. In order to do that a careful summarization of their last year’s income is tallied and submitted online to get back the dreaded Expected Family Contribution (EFC)—a figure that ranks your eligibility for and level of financial aid.

Expected Family Contribution—a Narrow-minded Figure

The manner in which the EFC is calculated is the same throughout the U.S. Newsday today raises the question: what about families who live in areas with a very high cost of living? For example, what about families who live in California, or New York, New Jersey and Connecticut; their income may seem “well-to-do” compared to many in the country, but

“The government’s formula for determining financial aid, used by many of the nation’s 2,533 colleges, factors income but does not account for the costs of housing, energy, insurance or sales and property taxes.”

Neglected or Overlooked Processes Cost Too

For some maybe it is the EFC that strings them precariously along the financial aid spectrum, for others, reports the New York Times (“Cracking the Books for Financial Aid to College,” Chura), college costs may mount in more elusive places, like simple ignorance of the whole process, such as deadlines and availability of aid resources, the limits of 529 accounts and a slew of other factors:

“People shortchange themselves if they wait to understand their options until they are in the thick of filling out aid applications.”

For those who have some investments and the recommended 529 accounts, apparently there are “mistakes” that can be made that cost you even more when all is said and done:

“Mistakes range from giving money directly to a minor to selling investments in the year that an aid application is made.”

For example, many parents have had the wherewithal to open custodial accounts and/or 529s, but they must have enough advance notice on college plans to be able to use them effectively. Using funds improperly, even the financial differences between types of colleges and programs, could cost in fees, lost interest and other ways that may just be too late to see.

Half Empty or Half Full?

Again, many Americans simply neglect financial chores, the FAFSA and other aid forms being big chores. Miss deadlines for financial aid and you stand to lose thousands. If you don’t look for scholarships, you also stand to lose. They have deadlines, too, by the way.

Add up everything you have to lose and it’s enough to drive you to drink, but think about all you may gain, and you may just pull out all those forms you’ve stacked up and simply get it done.

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