Preparing for College

Well, the obvious first step in preparing for college would be to study hard, and get good grades. We can expand that recommendation by taking the most challenging courses your school offers. Many colleges require SAT (Scholastic Aptitude Test) scores, so taking the test in the spring of your junior year and repeating in the fall of your senior year to see if you improve can be helpful. Involvement in extra-curricular and community activities demonstrates you are a well-rounded candidate for an institution of higher learning. For most high school seniors, the next logical step is apply and be accepted by an institution of your choosing.
 
One detail that is often missing in this college preparation scenario is… how and who is going to pay for what is likely your student’s most expensive single expense to date? Let’s start with the “who is” question. What discussions have you had with your student about your family’s financial situation and how much, if any financial assistance you are able and willing to provide? More often than not, I find families have not had this discussion which leads to misunderstandings and hurt feelings when suddenly the college acceptance letter arrives soon followed by the first semester bill. Another issue is that no one has “done the math” to calculate the costs involved in 4+ years of post-secondary education. Just checking on Clarion’s website 4 years of in-state tuition, room and board and other fees will run $60,000! Now is not the time to panic, but rather answer the second question.
 
How are you going to pay for college? Maybe you were able to establish and fund a section 529 college savings fund or a Coverdell education account for your student. Perhaps you purchased US Savings Bonds which will be tax-free if cashed and used for education expenses. The one common key to all students requiring help with financing college is completion of the FAFSA (Free Application for Federal Student Aid). This form must be completed for each year of post-secondary education that you need financial aid and Pennsylvania residents must meet the May 1 deadline or earlier if you school has a different deadline. Much of the information necessary to complete the FAFSA can be gleaned from your Federal income tax return (both parent and student tax returns if applicable). Do not feel the need to rush to complete your tax return in order to complete the FAFSA. You can use last year’s data in order to get the FAFSA on its way and then amend the information once you actually have your tax return complete for this year.
 
Based on the information you provide, your college financial aid office will put together a financial aid package which may include scholarships, grants, work-study and other funding sources. Many families make up the difference using student loans and loans guaranteed by parents. Again, my caution is “do the math”. Let’s assume of that $60,000 bill to Clarion you were able to pay for $20,000 through personal savings and the financial aid package. The remaining $40,000 was paid for by loans at 8% interest rate over 10 years. This is a monthly payment of $485 for new graduates during their young adulthood when they are also purchasing cars, a home, maybe getting married, starting a family. Remember when you sign the loan promissory note; you are promising to pay back the loan based on the loan agreement.