Unfortunately, graduating with debt has become so common for students nowadays. The amount of student debt in the US has seen a significant rise in the past decade alone. It is undeniable that education is vital, but with the high expenses expected in exchange for education, sometimes it becomes so unattractive. We’re here to help! Here are three tips on how to graduate from college debt-free!
1) Know your Expected Family Contribution (EFC) number (***this number was re-named the Student Aid Index (SAI) starting in 2022, but you might see it written both ways in online resources)
Here is a link that families can use to calculate this number. This SAI/EFC number gives families an idea of the amount the government expects them to contribute per year for their child’s college education. I suggest that parents run both the federal methodology (most public universities) and the institutional methodology (used by most private colleges). Both methodologies are available at the link included above.
2) If your EFC is a “good” number, i.e., the amount you already planned to pay each year, head to Instruction Set A (for context, families making $30k per year will have an EFC of $0, so that would be a “good” number). If your EFC is a “bad” number, i.e., more significant than the amount you plan to pay each year, head to Instruction Set B.
Instruction Set A:
If you like your SAI/EFC number, you should apply to colleges that meet 100% of your demonstrated financial need, i.e., schools that will only charge the SAI/EFC number you’re comfortable paying. Here is a good list of schools that meet the total need:
Since not that many schools meet 100% of demonstrated financial need, I would also consider adding in-state schools and even international colleges that are significantly less expensive than colleges in the US.
Here is a great site that helps students find EU programs taught in English and lets them sort by the program. (check out those costs!) Most UK / EU programs are three years rather than four, and many are tuition-free for Americans, so all the student pays for is housing/rent, which can be very affordable depending on the city.
Instruction Set B:
Now, for plenty of families, this SAI/EFC number is not a number they’re comfortable paying. So, if you don’t like your SAI/EFC number, you can then start planning on how to save money to meet this SAI/EFC number (having a target number is vital during the savings process) and make plans for how to find merit-based scholarships at a school that will help their student.
The first thing to do is find schools that give generous merit scholarships to meet the “gap” between what the government says a family should pay and what that family can afford to pay. An excellent resource for this is this website. Search a school’s name, click the “Financial” tab, and check out the average merit aid award for this school. Ideally, families not comfortable paying the SAI/EFC number will compile a list of schools that offer generous merit aid and eliminate the gap.
3) Run a Net Price Calculator for every college on the student’s college list (Think of this as the double-checking step)
Once you have created your list based on either Instruction Set A or B, you should double-check that the schools on your list are in your price range. You can do this by completing Net Price Calculators at each school on the list before the student applies to get a cost estimate ahead of time. Each school publishes its calculator, and here is an example for Occidental.
Think of it this way: the SAI/EFC calculator in Step 1 is just a general calculator to give you a starting point and estimate how much you should be paying. However, each school has its individualized calculator to assess your financial need. Usually, the general calculator and school-specific calculators match up. But, sometimes, they don’t (usually due to factors like how home equity and divorced parents are taken into account).
To find the Net Price Calculator for each school, simply Google “School Name + NPC,” and it’s the first thing that pops up. If the estimates don’t match your planned budget, consider going back to Steps 1 and 2 and adding different schools to your list.
Some closing thoughts:
Avoid generating additional income during a family’s “base” tax year for FAFSA, and get familiar with when this year will be: This is not intuitive – it’s colloquially called the “prior, prior year” in the education world. That means that the income parents make during their child’s sophomore year, spring – junior year winter, will be the federal government’s income to determine a family’s financial need. During this “base” year, it is not a good year to add more than normal to a family’s income. Typically, parents wouldn’t want to do something that generates unusual income, like selling an investment property or anything with significant capital gains. Also, this base year is the best year to get advice from an accountant or financial advisor, so if they suggest making changes or moving assets, parents need to do so before the end of this base tax year for it to change the family’s SAI/EFC.
Never accept the first offer.
Students should also not accept an offer of admission to a school without first asking for additional merit scholarship money. The answer may be no, and that’s fine, but you lose your leverage if you accept the offer of admission without first asking for more money. Calling the admissions office and saying something along the lines of “If I receive $10,000 more in merit aid, my parents say I can send in my enrollment deposit today,” will make the admissions officer consider the student’s request seriously and decide what’s in their school’s budget to get the student to a “yes” – which is their ultimate goal. To get context for typical merit aid / need-based aid packages at a school, my students and I use the excellent tool which posts each university’s average aid award. These conversations about merit aid happen through the Office of Admissions, not the Financial Aid Office.
Should everyone fill out the financial aid forms even if they think they earn too much? Yes! Every student and parent should be filling out the FAFSA, regardless of the family’s financial situation, for a few reasons:
- The FAFSA / CSS Profile is sometimes required for merit aid as well as need-based aid
- The FAFSA is easy to amend but reasonably difficult to file after the deadline. So in situations like a parent losing a job or having an extreme health expense in the spring of the student’s senior year, they could then amend the FAFSA to reflect that new financial need, even if they didn’t qualify in the fall.
- Families don’t realize they qualify for aid when they do! It happens all the time – especially when parents have more than one child in college at the same time.
Thank you for reading this article! Rachel Coleman’s information is located below. Thank you, Rachel, for writing this fantastic article!
We at LYS also know the importance of education, and we aim to help you out in making sure that your students receive all the help they need to ladder their success. If you are a parent looking for more college resources, click here. If you are a counselor or administrator looking for CCMR programs for your school, click here!
Author Bio:
Rachel Coleman is an IEC (independent education consultant) and Co-Founder of College Essay Editor (https://collegeessayeditor.com/) who has worked for 7+ years as an independent college counselor, helping high school students across all disciplines navigate their academics, financial aid, and college applications. Rachel received her BA in Comparative Literature from Stanford University and her College Counseling Certificate from UCLA. She is now an active member of HECA (Higher Education Consultants Association).
