Paying for College Without Going Broke, 2017 Edition - Princeton Review, Kalman Chany (2016)

PREFACE

FOREWORD

I was the first person in my family to go to college. After completing my undergraduate studies, I went on to law school, and after that—before I entered political office—I was a law professor at the University of Arkansas. The time I spent in the classroom was vital to my professional growth, and I was able to pursue higher education only because I had the help of scholarships, loans, and jobs along the way. Though it wasn’t always easy—as an undergrad, I lived on just a few dollars a week—it was far from impossible, and the investments I made in both time and money have paid immeasurable returns. My schooling, as well as the friends I made and the life experience I gained throughout, gave me opportunities, confidence, and hope for my future.

A college education should never be considered unattainable by any American. There are many avenues for funding available, but knowing how to look for assistance, as well as where to find it, is critical. Fortunately, our country has long recognized the importance of access to higher education. The land grant college system was established under Abraham Lincoln, the GI Bill after World War II, and the Pell Grants in the 1970s. My Administration established the HOPE Scholarship and the Lifetime Learning tax credit, which together have provided billions of dollars in tax credits to tens of millions of American families paying for college. We created AmeriCorps, one of my proudest accomplishments as President, which gave young people the opportunity to serve their communities while earning money for college. We also expanded the Federal Work-Study program, cut student fees and interest rates on all loans, and increased repayment options. Students saved more than $9 billion during my terms in office through the reductions in loan fees and interest rates.

While it has long been a key source of opportunity, a higher education is a necessity in today’s world. The challenges of today’s lightning-paced and information-driven global society mean that investing in the minds of our young people is the most important thing our nation can do. Every American child, regardless of race, religion, or income, will need an education to guarantee our future success as a country and our competitiveness in the world, and I am committed to inspiring more young people to attend and finish college. Both my Foundation and the Clinton Global Initiative, along with many other fine public and private institutions, are working to not only spread the word that the cost of tuition shouldn’t be an obstacle to attending college, but to also improve access to education in measurable ways. The good news is that there is more help than ever before for college-bound students and their families. Paying for College Without Going Broke is a comprehensive guide to the “ins and outs” of financing a college education. This straight-talking volume gives much-needed direction to students and the families who love and support them.

If you invest in your future through education, you’re taking the long view. Both the efforts and the sacrifices you make today will yield great rewards tomorrow.

—Bill Clinton

WHAT’S NEW

If you are reading this book for the first time, you can safely ignore this page. However, if you’ve read prior editions of this book, here’s a quick summary of the major changes that will be impacting aid for the 2017-2018 school year.

CHANGES TO THE FAFSA

In previous versions of the FAFSA, you were asked to provide income information for the calendar year preceding the academic year for which you are requesting aid. Beginning with the 2017-2018 FAFSA, you will be asked to provide income information for the calendar year before that, which has become known as the prior-prior year or PPY. So, for example, the 2017-2018 FAFSA will ask about income in 2015. The 2018-2019 FAFSA will ask about 2016 income, etc. etc. However, all other items such as asset values and household size, will still be based on your situation on the day you complete the FAFSA form.

Thus, even though you may have reported 2015 income information on the 2016-2017 FAFSA, you will again have to repeat that same 2015 income information on the 2017-2018 FAFSA form, with (of course) updated asset and other information.

The FAFSA filing period will no longer start on January 1 before the start of the academic year you are seeking aid; it will start three months earlier. So the 2017-2018 filing period will begin on October 1, 2016.

CHANGES TO THE PROFILE

The PROFILE will mirror the FAFSA methodology, using PPY to calculate the family contribution under the institutional methodology.

A SPECIAL MESSAGE TO FIRST-GENERATION COLLEGE STUDENTS AND THEIR PARENTS

by Shannon Ashford and Felton Booker

Paying for college is difficult for everyone these days, but for first-generation college students and their families, it can be even more of a challenge. In addition to worrying about coming up with the cash, you also have to deal with a completely unfamiliar process. You will face decisions, deadlines, and application requirements that can sometimes seem scarily complicated. This section is designed to provide first-generation students and their parents with some basic information regarding college admissions and college funding that will make the process a little less daunting for you both. It will also dispel some of the myths about the admission and funding process. Later sections in this book will discuss in greater detail the various options and strategies covered here.

PARENTS

For parents of a first-generation college student, the amount of new information to absorb, financial records to collect, fees to pay, and forms to submit can be overwhelming. The pressure of feeling that your child’s educational future may depend on how each admission and aid form is completed doesn’t help.

Here are a few topics some parents may be faced with as they tackle the college process for the first time.

APPROACHING COLLEGE ADMISSION AND FUNDING AS A COLLABORATIVE PROCESS

It is ironic that just at the moment when parents are supposed to be giving their child more autonomy in making his or her own decisions, along comes one of the most critical and expensive decisions that a young adult will ever have to make—a decision bound to test the resolve of any parent trying to let go.

The typical response of many parents, understandably so, is to take control. However, the reality is that many parents are just as much in the dark about the process of selecting, applying, and paying for college as their sons and daughters.

We’ve found that the most successful way to approach all this is to view the college process as a collaborative effort between parents and their college-bound child, with help from resources such as high school guidance counselors, college administrators, and reference guides like this one.

In this collaborative process, parents and children serve as reality checks for each other. Will you be paying for everything, or will your child carry some of the burden? While you don’t need to go into the minute details of your finances, it is a good idea to tell your child what you can really afford. As a parent, are you looking only at schools with very high admission standards? It might be a good idea to work together to select at least one college with a high acceptance rate where your student’s standardized test scores and GPA are above the average for the typically admitted student.

You may also come to realize that you and your child have differing expectations about college. You might want your son to attend school near home, while he actually wants to go to school three states away. Your daughter may want to major in literature, while you’ve always thought she would be an engineer. Although you may suspect that you know best, please take some extra time to consider the incredible opportunity—and daunting challenge—that this period of time presents to your child as a young person on the brink of adulthood.

DON’T BE PROUD, BE HONEST

Many parents traditionally view their family’s financial information as highly personal and perceive questions asked in financial aid applications as invasive, and more plainly, none of the school’s business. As parents, you should be very proud of your efforts to provide for your family. That pride, however, may often result in parents being either hesitant to apply for financial aid or misrepresenting their family’s information when applying. Neither is helpful to the family’s objective: ensuring that their child is financially able to attend a school of his or her choice. Therefore, you don’t want to overstate the value of your income and asset information on the forms. The purpose of these questions is to determine the accurate level of financial aid that may be available to your child. Any overstatement of the parent’s wealth or education may prevent your child from being offered the level of financial aid they are qualified to receive and may require in order to attend college.

On the other hand, it is never a good idea to exaggerate your family’s need. Colleges have sophisticated procedures to verify information in order to ensure that ultimate monetary awards accurately reflect your family’s financial situation.

Despite the complexity of some forms, it is very important that your financial information be accurate. Later in this book, you will see how to accurately represent your situation to your best advantage.

Remember, there is more than $235 billion in financial aid awarded each year, and millions of students and their parents apply for that aid, so you shouldn’t feel self-conscious about being one of them. It is understood that a large percentage of students will not be able to pay for school entirely on their own. That’s why each school has a financial aid office whose responsibility is to allocate public and private funds to college students.

FINANCIAL AID MYTHS

You may have heard a lot of myths about financial aid: that you can’t get it if you own your home, or if you have savings in the bank, or if you make more than a certain amount of money, or even if you are not working. But as you’ll learn in this book, none of that is necessarily true. Many financial aid recipients own their homes and have some savings in the bank. On the other hand, a number of parents who are unemployed, disabled, or receive only government benefits are also able to have their children qualify for financial aid.

One commonly accepted myth regarding financial aid is that the best way to get money for school is to search for little-known awards that go unclaimed each year. The reality is that such scholarships represent less than 5 percent of all the aid that is available. The biggest pieces of the financial aid pie come from funds provided by the federal and state governments as well as the colleges themselves.

Another myth is that you won’t qualify for aid if you are not a U.S. citizen. Certain noncitizens—for example, students who are permanent residents and have a green card—are eligible. In most cases, the parents’ citizenship status is actually not relevant at all.

Many people also assume that the price of tuition is the same for every college, but in fact, the range in prices is huge. Some colleges are very expensive (and unfortunately, these schools tend to get most of the headlines). According to the College Board, however, only about ten percent of students are enrolled in colleges with tuitions of more than $40,000. The reality is that the majority of students attend institutions where the tuition charges are less than $15,000 a year. And if you look at the community college level, the average tuition is about a quarter of that amount.

And not everyone pays the same price for a given college. In fact, going to college is a bit like traveling on an airplane. If you ask the person across the aisle what fare she paid, it may be completely different from your own. Some people may be paying the full fare for college while others pay far less, so you should never initially rule out a school based on “sticker price.”

Yet another big myth students and parents hold is that a student gets the same aid whether he is looking at a community college or a very expensive private university. And perhaps the biggest myth of all is that you should wait to apply for aid until after your child has been accepted to a college. If you do that, you may well be out of luck. It is crucial to meet financial aid application deadlines—and these deadlines sometimes precede the deadlines for the actual admission application to the college.

IS THERE REALLY FINANCIAL AID JUST FOR FIRST-GENERATION STUDENTS?

Yes, there is. A number of state governments and some colleges have specific financial aid programs that are available only to first-generation college students. When filling out financial aid forms, mark what describes the highest level of education completed, not the highest level attempted. For example, if a parent started college but did not complete an associate’s or bachelor’s degree program, then the correct response to a question asking for the parents’ educational attainment would not be “College,” but rather “High School.”

YOU MAY GET MORE AID THAN YOU THINK POSSIBLE

For some families, it may not cost any more to go to a school with a higher tuition than it would to attend one with a relatively inexpensive stated price. While it is true that on average the cost of attending a state institution is less than that of attending a private college or university, depending on a family’s income and a college’s available aid funds, the cost paid by the family for attending even the most expensive Ivy League schools may be less than the cost of attending an in-state public university. The key is to focus not on the “sticker price,” but on how much the family can pay, how much the student has to borrow, and what other kinds of tuition help are available.

Investigate the financial aid options at each institution of interest and get a rough idea of your chances of receiving aid. Of course, a dose of pragmatism isn’t a bad idea. Your child should apply to at least one school you would be able to afford with little or no aid.

STUDENTS

While this book may seem geared toward your parents, this particular section is especially for you. After all, you are the one going to college, and nowhere is that fact more evident than on the financial aid forms themselves; when you fill them out, you will notice that you are the applicant for aid, not your parents. Financially and emotionally, you are the one who, in many cases, will be directly responsible for the choices you and your parents are about to make.

SO WHY COLLEGE IN THE FIRST PLACE?

Do you find that you are repeating that question silently in your head, but are apprehensive about saying it aloud? Even if you feel you have nothing in common with other high school students, this is the one sentiment that binds students everywhere. Such uncertainty is healthy and normal. If you are questioning the importance of college, it indicates a few things: (1) college is on your mind, (2) you’ve devoted time to pondering how it affects your future, and (3) you exhibit a willingness to invest the time needed to examine the benefits college offers as well as the preparations needed to attend.

THE PRACTICAL REASONS FOR COLLEGE

Years ago it was possible to find a job with decent wages even if you possessed only a high school diploma. However, technological progress, the complexity of modern life, the skills needed to support it, and the importance placed on higher education by employers has made a college degree almost a necessity. According to some studies, individuals with a bachelor’s degree will earn on average about $800,000 more than a high school graduate over their lifetimes. In addition, a college degree has much more than monetary value. It can open doors to personal growth, social development, and cultural awareness.

IS COLLEGE REALLY THE NEXT STEP?

While the global marketplace increasingly requires a workforce with some type of post-secondary education or specialized skill, it should be noted that earning a degree is a personal decision that should not be made lightly. The process of getting to that decision can take many forms. You should take your time exploring the opportunities college presents and the ways you need to go about researching financial aid options. Reading this book is a good place to start.

Just as the process of searching for the right college and the ways to pay for it can take many paths, it can also happen in different stages. A student might start by attending a community college, junior college, or technical school, and then transfer to a four-year institution. This would enable her to “get her footing” by saving money or improving her academic transcripts. A student might take a year off from school before beginning college—to earn money to pay for college, to travel, or to work in a national community service program like AmeriCorps.

If your plans to attend a four-year college include taking time off before enrolling, or attending a smaller school and then transferring, you still should educate yourself about the details of the process now. More information on such options is contained in the chapter of this book titled “What the Student Can Do.” Sit down with your parents, guidance counselor, or mentor. Include them in your plans, ask them for input, and create a path that will allow you to attain the goals you have set for yourself. Start as soon as you can, and keep an open mind.

COMMUNICATE

It’s the most critical part of this process. You will need to discuss applying, attending, and financing college with your parents, guardians, mentors, teachers, guidance counselors, and anyone else whose role it is to ensure your future well-being. Difficult as that might seem, it often has side benefits. For example, your parents may not even know what you want until you tell them. Articulating out loud to them (and others) what you want may help you to define exactly what that is. So you should talk often and candidly with your parents about college. It might even help if you develop some type of check-in or update system that your parents agree to, so that everyone knows when planned conversations about college and your progress in applying will occur. And remember to keep the lines of communication open, even though you may express a different perspective than your parents. You can agree to disagree sometimes. Try to keep in mind that you are all working toward the same goal: making the best decisions for your future.

If throughout the course of these discussions your parents seem unwilling to accept your point of view, you may want to consider having an outside party join in your conversations. Another adult family member, or even someone more familiar with the college process such as a guidance counselor, may be of great help in such situations. Remember also that people who are most informed about a subject are more likely to be respected and listened to throughout a conversation. Do your research. Show your parents and others that you are serious about this process and that your opinions deserve to be respected. And bear in mind that no matter how tense your family situation, if you miss a deadline or ignore a college’s request for more information, you may have your admissions application rejected or lose your aid eligibility. So stay on top of those deadlines!

SAFETY IN NUMBERS

It may seem like a challenging process, but millions of students and parents have successfully gotten through the college decision and financial aid process before. No matter what you hear about how hard this is, know that there are tools in place that can make it possible for any student to get a college education. But you’ll have to work smart, and Paying for College Without Going Broke will show you how to do just that.

About the Authors of A Special Message to First-Generation College Students and Their Parents

Shannon Ashford is a native of Columbia, South Carolina, and a graduate of Stanford University.

Felton Booker, a native of Los Angeles, received a B.A. from Williams College and a J.D./MBA from Columbia University.

Ashford and Booker participated in the William J. Clinton Presidential Foundation Intern Program in the 2003 Summer Session.