Is the Net Price Calculator a Reliable Tool?

Is the Net Price Calculator a Reliable Tool?

I was just corresponding with some fellow educational consultants about financial aid and net price calculators. For those of you not familiar with the term, a NPC is a very good tool used to determine how much a family would be paying for college. You can find NPCs in all – or almost all – college websites, in the financial aid page. You plug in your financial information and…tada! It spits out what you will pay for college. However, every tool has limitations and it might be useful to know what those are. My colleague Jeff Levy summarizes his thoughts here:
“My experience with net price calculators is that they are a good way for families to learn generally what a set of four, five, or six colleges might cost them. I don’t, however, think they are necessarily an accurate predictor of what any specific institution might cost them because so much depends upon the applicant pool the candidate is in. NPCs are using, at best, past data to inform their results, but they are not using current applicant pool data that financial aid administrators and enrollment folks are extensively relying on as they build their class and build their financial aid packages, applicant by applicant, simultaneously ensuring that they are meeting their enrollment revenue goals.
I am also usually not a proponent of using financial reasons to pull out of the ED contract, even though there is nothing unethical about doing so. Imagine a student is admitted to their ED dream school, but the award at this need-blind school that meets full need is $5K short of what the NPC predicted. For a family with an EFC of $18,000, an additional $5K annually is a lot of money, probably making the school unaffordable. What does a parent tell their child on December 20 when they receive this great news about their acceptance and heartbreaking news about their award? “We will negotiate with them,” the parent says. A likely response from the financial aid office, once they reopen after the holidays, is, “We have met your full need and are unable to increase your award.” Does the parent then tell this child that she must turn down the offer, not knowing for at least three months if she will get admitted at her selective RD schools and if she does get admitted whether those financial aid offers will be competitive with the one they are turning down? 
Guiding families wisely requires that we understand how important a factor cost is to them, and helping them understand fully the pros and cons of going the ED route.”
Questions? Let’s chat!
Bettina Weil
Founder, Weil College Advising, LLC
Seniors: Making your Budget for College

Seniors: Making your Budget for College

Admission offers received – check! 

Enrollment decision made – check! 

What’s next?  You’ll be getting a lot of information about next steps from your college for registration and orientation.  Meanwhile, you might want to start a conversation with your parents about a spending money budget for college.

Here are 6 money management tips for you to consider.

  1. Open a bank account and get an ATM card (if you don’t already have one).  You may want to research the local banking options at the school you will attend.  Many colleges have a bank or credit union on campus.  Make it a joint account (you and a parent).  That way you can access your money when away from home (in college). 
  2. Learn how to check your bank balance from your phone It’s a good practice to check your bank balance before you get gas or stop by Starbucks to be sure you have money in your account for the purchase. 
  3. Learn how to deposit checks.  Most bank mobile apps will allow you to deposit checks right from your phone.  Great for those graduation checks you will receive. 
  4. Create a budget.  A spending plan is essential.  Know how much money you will have each month from your financial aid, a campus job, or from your family.  With your parents, create a realistic monthly budget.  Then, your biggest task will be to stick to your budget. 
  5. Learn how to schedule & pay bills from your account.  You might have a phone bill or other bills you are responsible for.  Learn how to pay on time and keep within a budget. 
  6. Decide with your parents and if you choose, open a credit card account BEFORE leaving for college Credit card companies will offer many promotions for new students on campus – free shirts, new tech gear, etc.  Don’t be tempted by free stuff!  Open ONLY oncredit card and use this card as a “backup” (if you don’t have cash) to help establish good credit.  

Start practicing good money management skills now so that you have one less thing to worry about freshman year. 

Take Action 

Use the Cost of Attendance on your college’s website to calculate your college budget. List your personal expenses.  Divide the number by 9 months to determine your monthly budget. 

Questions? Let’s chat!

Bettina Weil

Weil College Advising, LLC

info@weilcollegeadvising.com

Seniors: Financial Aid in the time of COVID-19

Seniors: Financial Aid in the time of COVID-19

Although the COVID-19 pandemic has caused some schools to push back their enrollment deadlines, some colleges are still asking students to deposit by May 1.  Financial aid awards likely play a big part in your final decision.  But interpreting those awards might seem a bit like reading a foreign language.  Below are six common terms that you will see on a financial aid award and some ideas on how to assess your offers.   

In addition, it’s possible that your family’s financial circumstances have changed since you applied.  Whether that is related to the current coronavirus pandemic or other reasons, colleges have a process for reconsidering your financial aid award. This process is often called Professional Judgement.  We’ve included information at the end of this post on how to appeal your financial aid award.   

  • Cost of Attendance – The Cost of Attendance is more than just tuition; it is an estimate of the total expense for one year of attendance.  It should include – 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the financial aid award does not include these items, search the website for the information or call the college.
  • Expected Family Contribution (EFC) – The amount your family is expected to pay toward college (your EFC) is calculated by the FAFSA (Free Application for Student Aid).  You can find your EFC on the confirmation page you received when you submitted your FAFSA form.  This number should be listed on all your awards.  If it’s not there, ask the college why. Cost of Attendance – Expected Family Contribution = Need
  • Student Financial Need – Use the financial aid equation above to determine your “financial need” for each school.  Then check the college’s award letter.  If the school’s total financial aid award is less than your financial need, you have a “financial aid gap.”  You must pay this gap (in addition to paying your EFC amount) with other sources of funding not provided by the school.  Scholarships from community groups or other sources, personal savings, or private loans are examples of how students pay their EFC plus any financial gap.
  • Grants and Scholarships – Grants and scholarships are awards that do not need to be repaid.  Are these grants or scholarships renewable (will you received them for just freshman year or every year)?  What are the eligibility requirements that you must meet to receive the scholarship for additional years (a minimum GPA, a certain number of course credits, etc.)
  • Loans – Has the college included student or parent loans in your award?  This money must be repaid by you or your parents.  A financial aid offer with only loans may not be the best choice for you.
  • Work-study – A work-study award is potential income that you may earn by working part-time in a work-study position.  Most work-study jobs are on-campus which can make them convenient, but a work-study award does not guarantee you a work-study job.  You must apply for work-study positions like any other part-time job.  And just like other part-time jobs, you will receive a paycheck for your work-study earnings.  It is not automatically applied to your cost of attendance.  Contact the university financial aid office to learn about the availability and application process for work-study positions.     

Are you being offered a mix of grants, scholarships, loans, and work-study?  The more money you don’t have to pay back or earn by working, (ideally – more scholarships and grants, fewer loans and work-study) the better.     

Appealing for Additional Financial Aid 

Especially in the wake of the coronavirus pandemic, many families find themselves facing a very different financial reality than a few months ago.  If a parent has lost their job, has become ill which has caused them to stop work, has lost wages due to quarantine or “stay at home” order, or even lost a substantial amount of savings/assets due to stock market changes, you may have good cause to appeal your financial aid award. Contact the admissions or financial aid office at the college directly.  

Tips on Appealing an Award, by Lynn O’Shaughnessy, author and higher ed/financial journalist

1. Contact individual schools regarding what their procedure is for appealing an award. Some might prefer that you complete an online form while others might want a letter.

2. The more specific you can be regarding your circumstance, the better. For instance, explain how much you lost in your college accounts. And mention, if relevant, that the money needs to stretch for more than one child.

3. Let schools know if a parent has lost a job or has had hours cut. Ideally, you will have a letter from the employer stating the salary cut back.

4. Also mention other extenuating circumstances. For instance,  because of the coronavirus crisis, you may now be supporting other relatives.

5. What you shouldn’t do is include in the letter how special your child is and how the college would be lucky to have her/him. Also don’t use the term negotiate. Financial aid staffers hate that.

For more detailed instructions on how to appeal a financial aid offer, contact us at info@weilcollegeadvising.com

Bettina Weil

Founder, Weil College Advising, LLC

 

What If I’m Waitlisted?

What If I’m Waitlisted?

By now, application decisions should be rolling in to your inbox/mailbox.  If you haven’t already heard back from all your schools, the wait is almost over.  Most colleges aim to have final decisions to everyone who applied before April 1.  But what if your “final” decision isn’t so final?…  What does it mean to be on the waitlist? 

Why do colleges have waitlists?  Can’t they just say yes or no?  
With students applying to more and more schools, it’s become more difficult for colleges to predict how many of their admitted students will actually enroll.  Students are being accepted to many colleges – but you can only enroll at one.  That means many students who have been admitted to the college are not going to attend.   

Enrollment targets are a serious issue for colleges – too many students result in overcrowded dorms and classroom, but not enough can mean funding shortages.  If a college realizes they may fall short of their enrollment target, they can accept students from their waitlist to fill the gap.   

So – I’m on the waitlist.  What should I do? 
Essentially, you can reply to the waitlist offer one of two ways: 

  1. “No, thanks!”  Although the college offered you a spot on their waitlist, you are not obligated to accept that offer.  Maybe the school that waitlisted you is not your first choice – if so, no big deal.  You can let the college know that you do not plan to remain on their waitlist.   
  2. “Yes, I’m willing to wait.”  If you think this school might really be the one, let them know that you are interested in waiting.  Follow the reply directions in your decision to confirm you intend to remain on the waitlist.  It’s also a great idea to follow up with a personal email to tell the school – if they accept you from the waitlist you intend to enroll (only do this if it’s true).  You can also reiterate why you think this college is such a good fit and ask if any additional information like new SAT/ACT scores, senior year final grades, etc. could help to improve your chances of admission from the waitlist.       

You should seriously consider all of the admission offers you receive.  Schedule visits, compare financial aid packages, talk with your parents and your counselor, make a pro/con list, etc.  You have to confirm your enrollment with a college by May 1 (that’s the National Candidates Reply Date).  Most schools won’t make decisions about their waitlist until after May 1.   

In addition, there are typically only a small number of students admitted from the waitlist (sometimes not any).  You should confirm your enrollment with one of the colleges that has admitted you (even if you stay on the waitlist at another college).  It’s hard to hear that you are on the waitlist (especially if it was your first choice), but maybe it’s an opportunity to get excited about a school that really wants you (and hopefully they offered you great financial aid to prove it).  Many colleges can be a good fit if you have the right mindset.   

Questions? Let’s chat!

Bettina Weil

Founder, Weil College Advising, LLC.

Comparing Financial Aid Offers from Colleges

Comparing Financial Aid Offers from Colleges

Comparing Financial Aid Offers from Colleges

You got into the top schools on your list.  Each has sent you a financial aid award.  One offer looks better than the other, but is it really?  It’s important to compare apples to apples when looking at financial aid offers.  Here are 6 questions to ask: 

  1. What is the Student Budget?  Does the college list all the costs for going to college: 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus).  If the award does not include these items, search the website for the information or call the college.
     
  2. What is your Expected Family Contribution (EFC) on your Student Aid Report?  The amount your family is expected to pay toward college is on the student aid report generated when you filed the FAFSA (Free Application for Federal Student Aid).  This number is needed for comparing financial aid awards.  If your family contribution is close to or more than the student budget, then your awards from the college are going to be based on merit, and not on the financial need you have.
  3. Is there a gap?  You should know your EFC from filing your FAFSA.  To calculate how much financial aid you should be receiving, subtract your expected family contribution from the total student budget (all five items from question 1).  The remainder is your estimated financial need at the college.  Is the college meeting your full need, or only a portion of it?Total Cost of Attendance – Expected Family Contribution = Need 
  4. How much of your award is grants or scholarships?  Grants and scholarships are money that you will not have to repay later.  You want to maximize the amount of grants and scholarships you receive and minimize the amount of loan money you must take out.  Are the grants or scholarships renewable for four years?  What conditions exist for the renewable awards (a minimum GPA, number of credits completed, etc.)?
  5. How much is in student or parent loans?  How much of the offer is a parent loan?  A financial aid award of $20,000 parent loan – but no grants or scholarships – is not a good offer.  Parent loans (when necessary) should ideally be used to help pay for the expected family contribution not meet your financial need.
  6. Is there a good mix?  Is there something missing?  Are you being offered grants, scholarships, loans and work?  Look for a good mix.  If you are not offered “work-study” ask about it.  It is especially helpful If you are looking for a campus job to earn money for your personal expenses while in college.   

Questions? Let’s chat!

Bettina Weil

Weil College Advising, LLC

info@weilcollegeadvising.com

Financial Aid Offers: How to Read the Fine Print

Financial Aid Offers: How to Read the Fine Print

Financial Aid Offers: How to Read the Fine Print

Financial aid terminology is foreign – to say the least – to most parents and students. After all, how would a “regular person” understand the complex scenario of grants, scholarships and different types of loans that are specific to college tuition and expense? Even us, full time educational consultants, have to stay on our toes with the changes and nuances of the financial aid system.

Here are some tips that might help clarify a few of the most common mistakes.

  1. What you receive from the Financial Aid office at your college is not an “award”. Grants and scholarship are awards. Loans are not awards. Work-study is not an award; it is the potential for employment that offers earnings to students.
  2. In the financial aid offer, look for the cost of attendance. For any student and/or family to be able to make an informed decision, the amount of aid received must be compared to the total cost of attendance in order to determine the student/family financial contribution. Net cost is the difference between the total cost of attendance (COA) and all grant/scholarship aid received.
  3. Break down the cost of attendance into clear components. For students and families to be able to plan how to cover costs, the provided cost of attendance needs to be transparent about what is and is not included. While basic needs like food and shelter are critical, other keys costs such as books, supplies, medical insurance and transportation also need to be anticipated as you determine if a school is a financial fit.
  4. Student loans have different sources: federal, state, institutional, or private. Federal student loans come with important protections for students and families, often have lower long-term interest rates, and repayment starts six months after graduation. Read the title of the loan to know the source and to identify which loans come with these protections.
  5. Parent PLUS loans are not student loans. Parent PLUS loans are different than student loans and involve higher risk. Repayment starts immediately for parents who borrow PLUS loans, not after the student graduates from college, and PLUS loans include higher origination fees and interest rates. In addition, a parent must have no adverse credit history to qualify and further application is required to confirm eligibility.
  6. The financial aid process can be intimidating, often with deadlines and fees that are not intuitive. Make sure you take note of the specific next several steps that a student/family should follow to accept or decline financial aid.

When students and families understand financial aid offers, they make informed decisions that help to increase persistence, completion, and successful repayment of student loans. It is everybody’s best interest that you and your family understand the financial aid package you are offered. If you have questions about a specific financial aid package, don’t hesitate to reach out to the financial aid office at the college.

Questions? Let’s chat!

Bettina Weil
Founder
Weil College Advising, LLC
info@weilcollegeadvising.com
914.723.8080