Next to buying a home, the largest investment many families will make is their child’s college education. A college education is very expensive. Even at lower-priced, state-supported colleges, a four year degree can cost in excess of $50,000.
In a recent survey conducted by the American Council on Education it was found that financing their children’s college education is one of the top five concerns facing American parents today. In today’s economy, after paying the family’s bills there’s not much left over for a child’s college education.
This shortfall places parents in the stressful position of having to either plunge into debt by procuring loans or “stealing” from their own retirement which ultimately compounds the problem. I have seen this phenomenon force parents to work through retirement age while also hurting the chances for their second and third student to obtain a quality education as well. Over 50% of all college students are forced to drop out, many due to the lack of funds.
A good alternative strategy is to go after merit-based endowment “free” monies that don’t have to be paid back. Colleges control over 95% of the money that students receive each year. They literally have billions of dollars to attract the students they want. Lehigh University, my alma mater, has over $1 billion in their endowment fund and this figure still places them outside the top 50.
Years ago colleges looked at financial aid as a charitable operation within their institution. Financial aid has now evolved into an important recruiting tool for colleges. Although funding was originally designed to go to those in most need, it actually goes to those who know the most about the process. The more you know about the deadlines, where funding comes from and who is most likely to be awarded it, the more money you will receive.
Unfortunately, this is where most high school guidance offices falter badly. They rarely have the knowledge or expertise to become involved with funding issues or the negotiation and appeals process. Without careful planning and guidance, many families will lose out on tens of thousands of available dollars for their child’s education. For additional information go to www.yourguidanceoffice.com;
There are two profound mistakes I have witnessed over the years that are worth noting. One, is the notion of waiting to submit the FAFSA until after finishing your taxes. Second, is spending time writing essays for small $500 type scholarship competitions.
The FAFSA needs to be completed and submitted by January 1st of the students’ senior year. Many schools will give you $1,000 per year off for just for filing on time. That’s $4,000 right there. Keep in mind that endowment money is first come first serve so why not get to the front of the line while their coffers are full? Waiting until March or April will also put your student in competition with thousands of others making the same filing mistake. Once your taxes are done simply adjust the FAFSA numbers and re-submit.
For the higher performing students, seeking small essay writing scholarships can be a costly waste of time. In fact, there are schools that will decrease scholarship amounts commensurate to what the student received from other sources. This unwelcome surprise typically occurs after freshman year when it’s time to renew the scholarship.
Your preparation for college will be time well spent. With proper planning, you will be able to gain admission to your dream school and receive the necessary funds to attend!
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