## How to become a more educated consumer when it comes to finding the best deals for college

When you’re researching colleges, there are three important questions you need to get answers to in order to become a more educated consumer and have a fighting chance to beat the colleges at their own game.

In order to be able to ask these questions effectively though, you have to do a little homework ahead of time. You’ll first want to determine what the cost of attendance (COA) is at each school. Basically the cost of attendance is one year of everything – tuition, room and board, books and fees, personal expenses, travel expenses, etc. It’s the big ugly sticker price you find when you’re looking for what the total budget will be for each school on an annual basis.

The second thing you need to determine is what you’re expected family contribution (EFC) is. There are 74 criteria that go into determining your share of the college bill. To the degree that you can understand how those components come together to affect your families expected contribution, you can sometimes drastically reduce that number an increase your eligibility for financial aid. I’ll be talking more about that in the future, but for now do the best you can to determine what your EFC is in lower it is much as possible.

Once you know the cost of attendance and your expected family contribution, you can subtract the expected family contribution from the cost of attendance to determine if you have a financial need at that particular school. If you do, you now have the groundwork in place to ask these three questions and gain an advantage in the planning process that can save you tens of thousands of dollars or more.

**Question 1**
The first question you want to ask is **what percentage of my need will you meet?** You’ve use the formula above to determine that you have a need, so now you want to know how much of it each college will meet, right?

What would you like their answer to be?

Of course, __you want them to meet 100% of your need__. Is that asking too much?

No, it’s not. Who has deeper pockets - you are the college? Of course they do. And if you have a financial need, you want to have them meet as much of it is possible. The good news is many colleges do meet 100% of your need, but you can’t always judge a book by its cover or a college’s generosity by how well-known they are. You have to take the time and do the research to determine how they handle things from a financial aid standpoint and the results can be very eye-opening.

**Question 2**
The second question is after you’ve determined that you have a need and you’ve determine how much the college is going to meet of that need, you want to ask the college **what percentage of the need will they meet with gift aid versus self-help?**

Gift aid is free money. It’s what everyone is looking for, right? Self-help is basically everything else – student loans, parent loans, work-study, etc. Naturally, you’d like to get as much gift aid as possible so as you asked the question, “What percentage of my need will you meet with gift aid?”, how would you like to school to respond?

That’s right! You’d like to have them tell you that they will meet 100% of your need entirely with free money, or gift aid. Is that asking too much?

No, it’s not. Many colleges __do__ meet 100% of your need or at least a very high percentage of that need with gift aid. But as I mentioned before, you can’t always tell that just by looking at the college or by how well-known their brand name is. You have to do the research.

**Here’s how you use these questions to your advantage**
Let me give you a quick example to show you how this works. Let’s say you’re considering two colleges. College A is maybe an out-of-state university or private college. It costs $40,000/yr. School B is something in-state and it costs $20,000 to go there. Now it doesn’t matter exactly what School A is for purposes of this illustration. All we know is that School B costs half as much as School A does.

Now, since you’ve determined your EFC ($10,000 in this case), you can subtract it from the cost of attendance at each of these colleges to determine if you have a need at each school. And as you can see by using the formula I gave you earlier, you have a $30,000 need at School A and a $10,000 need at School B.

As a side note, one of the great things about knowing what your EFC is ahead of time is that once you determine what it is, it’s roughly the same in every college. That allows you to determine your need and predict what your out-of-pocket expenses will be at each college before you ever apply.

So now let’s go back and look at School A. The first question was what percentage of my need will you meet? School A meets 100% of your need. School B only meets 60% of your need.

The second question was what percentage of my need will you meet with gift aid? School A meets 80% with gift aid and 20% with self-help. School B does a 50-50 split between gift aid in self-help

So now let’s look at what each school will ultimately cost.

Because you had a $30,000 needed School A and because they met 100% of your need and then met 80% of that with gift aid, you can see that the amount of free money they offered was $24,000. The other $6,000 they awarded you was offered as self-help – which for our purposes here could be a student loan.

School B met 60% of your need but they only offered half of it to you as gift aid. You can see that in the $3,000 listed above. They also offered you another $3,000 of self-help, which for our purposes again here could be a student loan.

One interesting thing to note here is that because they did not meet 100% of your need the additional $4,000 of unmet need got rolled back into your EFC making your out-of-pocket portion there $14,000 compared your original EFC of only $10,000. Now when you take that $14,000 plus the self-help portion of $3,000, your total out-of-pocket expenses for School B are $17,000. Compare that to School A where your total out-of-pocket cost at would be only $16,000, your $10,000 EFC plus the $6000 of self-help.

Although School B started at only $20,000, you end up paying $1,000 more per year to go there than School A would cost, even though their cost of attendance was twice as high as School B at the beginning.

I see this all the time and it seems that many people’s mindset is hardwired to think that they have to stay in-state because it’s the most affordable option. In many cases that’s simply not true. Don’t be afraid to look at private universities or out-of-state universities, especially if you have a strong student for whom you’d like to provide the best opportunities possible. You have to get answers to these first two questions in advance to know where you stand. And you simply can’t shop by sticker price or you’re going to cause yourself to miss out on some great values.

**Question 3**
Now that you understand questions one and two; let’s take a look at question number three. Question number three is **what is the average length of time it takes students to graduate?**

Some colleges do a much better job than others and getting kids off your payroll sooner.

And think about it, if you had two similar colleges that were going to cost roughly the same, or maybe if one college costs a little bit more but they tended to graduate students a year sooner than the other one, wouldn’t you like to know that information in advance?

You can. Colleges routinely publish these stats online or you can ask their admissions office for them directly. The financial aid office will handle the answers to questions one and two, but the answer to this question will come from Admissions.

**Planning to win**
With the answer to these three important questions in hand, you can determine in advance what each college will likely cost and what kind of timeline you would be looking at for your son or daughter to graduate. Most families figure this out as they go, but that’s a little bit like jumping off a cliff and trying to build an airplane on the way down. Why put that kind of pressure on yourself or leave so much to chance when there’s clearly a better way?

Use the formula I’ve given you to determine your need at each college and take the time to get answers to these three questions and any others that you feel are important to help you become a more educated consumer. College is expensive and the colleges know that you’ll spend money for your kids that you wouldn’t otherwise spend on yourself. That’s why I’ve made it my mission to make sure that people only pay their fair share of the college bill and stay in control of the relationship they have with the colleges throughout the planning process. This is an important milestone in your family’s life and you only get one chance to get it right.

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