October is "FAFSA time" where all seniors are filling out this form in the hopes of getting financial aid to make their colleges at least somewhat affordable.

After a recent conversation I had with a friend of mine whose student has the grades to possibly attend an Ivy League school, I thought I’d write this newsletter on how to approach identifying “good fit colleges” when it comes to discovering where the best financial aid may be.  If affordability is a factor in your student’s college choice, it is extremely important to understand where the money is and how it will be distributed based on your family financial picture as well as your student’s academic abilities.  

First of all, colleges will consider the five different sources for financial aid: 
a) the Family 
b) the Federal government 
c) the State government 
d) the University 
e) Outside Scholarships

Amongst these sources, there are various types of available financial aid that one needs to thoroughly understand. You must understand from which source the different types of funding come from and how a student may be eligible for them in order to maximize ones chances for a good financial aid package:
a) need-based aid 
b) merit-based aid 
c) athletic scholarship aid 
d) work/study 
e) loans 

Finally, there are two types of financial aid forms that your family must fill out in order to determine aid eligibility:
a) the FAFSA
b) the CSS Profile

I see one issue in particular come up again and again in my practice.  Many families assume that because their student has a top GPA and/or test scores, that they will be eligible for scholarships. This is true in many cases since quite a few schools offer merit aid.  Unfortunately, the schools that those top students often want to attend are usually the schools that do not offer any merit aid. Thus, while those top grades may help them “get admitted” to a top school, it will not help them at all when it comes to financial aid relief.  Stanford, all of the Ivy’s, most of the NESCAC schools and many other top schools do not offer any merit aid at all, only need based aid.  In this case, it is important to know which schools offer strong merit aid and direct the student to apply to those colleges.

Let’s move on to need based aid then.  A family can get excellent need-based financial aid from these colleges if their income and assets are below a certain threshold.  However, to determine need-based aid, many of these top schools also use the CSS Profile in addition to the FAFSA, which gives them a meticulous look into your family’s finances. These documents will determine your Expected Family Contribution and thus how much you will be expected to pay towards your student’s cost of attendance.  Even if you are a divorced family, the CSS Profile collects a financial picture of both sets of biological parents and thus will likely double the income and assets, bringing your chances for need-based aid down even further.  In other words, to get good need-based aid, you must understand your Expected Family Contribution and where this number puts you in the context of each colleges’ generosity.  

Finding colleges that meet your family’s specific financial aid requirements is the key.  Strong student?  Direct them to schools that give a lot of merit aid.  Low Expected Family Contribution?  Direct your students to schools that meet a high % of need-based aid.  Know your EFC?  Understand which colleges meet a high % of need and which colleges give good merit aid.  Know which financial aid forms the college takes, how they will interpret your finances and thus how they determine eligibility for funds.    

It’s no wonder that navigating the financial aid process is so confusing and thus creates a great source of anxiety for most families.  Choosing a college for your kids is the second largest investment most families will make  - after purchasing a home.  The process of choosing a college is also costly to families in terms of energy, time and money and so approaching this decision wisely is very important to the emotional and financial health of the entire family. It is crucial to begin this process on solid footing and proper perspective and a thorough understanding of financial aid can greatly help their chances of finding a college that will be affordable in the end.