EFC PLUS, college planning software compares Award letters and helps families understand the “bottom line” or cost of their child’s college choices. The college acceptance letter arrives with an award letter containing the college financial aid package. Comparing the financial award letters can be overwhelming and confusing due to institutions having different formats and terminology. This is why we have included an award comparison feature in the EFC PLUS, College Cost Analyzer.
The EFC PLUS college financial aid award tool eliminates the confusion of different college award formats by having each of the award letters in one place and in the same standard structure. The accepted schools are listed based on the net cost over four years. This makes the value comparison easier. The tool has the ability to compare up to 20 schools at one time. Hopefully, there are fewer schools to compare at this point in the selection process.
To analyze an award letter properly, a family should separate the financial aid into merit-based aid, need-based aid and self-help. This process helps families understand the “free money” amounts or money that does not need to be paid. Some need-based aid will come in the form of loans or work-study that will need to be paid back after graduation or earned while in college. EFC PLUS, College Cost Analyzer makes award letter comparison easier for families by arranging the information in a consistent format.
Net Price Calculator
EFC PLUS, College Cost Analyzer is different than most net price calculators. It has an innovative four-year cash flow that calculates and projects the net four-year cost of each college based on each student’s specific situation and award. The advantage of generating a four-year projection for a family is that a family’s net cost could change significantly when other siblings are enrolled in a post-secondary program. The actual college award letter only gives the family a one-year cost of college. By using the historical gifting policy of a college, the EFC PLUS tool is able to estimate the future financial award amounts. This is especially important if the family has multiple children in college at one time. With this financial information, families can make a better college financial decision.
Another feature that is unique to EFC PLUS College Cost Analyzer, is that a family can input a customized budget amount into the system. It then takes the actual award letter and with the budget amount projects the additional resources to attend a specific college. With this analysis, a family can see when and how to structure the debt, if needed. The EFC PLUS process identifies the true affordability of a college based on the financial award and a family’s budget.
Different scenarios or budget amounts can be inputted into the system to show how the college cost would change depending on how the budget constraints of the family. It will also calculate the monthly payment based on how you structure the debt at graduation.
EFC PLUS presents the calculations in an easy to read graphical format. The EFC PLUS award cash flow graph allows families to graphically see the results. Here is an example of the EFC PLUS Award cash flow graph.
As part of the EFC PLUS calculation, the software also projects the total debt and monthly payment at graduation by college. The freshmen award letter will list all the need-based aid and self-help money. The details of the award letter will be entered into the system and then the tool calculates an estimated four-year financial aid award package. If additional funds are needed, the tool will give the family the ability to compare the various ways to borrow the funds such as a parent plus, home equity amount or private loan. You are able to input the actual interest rate percentage custom to your lending score.
Some colleges include the Parent PLUS loan as part of their award letter packaging. The EFC PLUS method does not include that as part of the award letter input since it distorts the net cost of the college.
EFC PLUS Award Letter Analysis uses the ten-year standard loan repayment for the projected monthly loan payment amounts. Other loan repayments options could be less expensive. For comparison purposes, we have chosen to use the ten-year standard since this is the default method given and it consistent for easier comparisons.
Engage the student
When we raise our children, we should teach them about finances. Today, in my business I have seen a decline in the graduates truly understanding the debt that they have incurred. This is why when we developed EFC PLUS. The college decision is very emotional and parents need to engage the student in the financial college decision.
How is this done with EFC PLUS, College Cost Analyzer?
The parent’s financial information can be hidden from the child and they will only see the list of colleges with the net cost. This allows the parents and student to discuss the true value of getting their college degree.
One of the highest reasons for transferring is financial. By not making the correct decision, students increase the risk of delaying graduation, which increases the cost. The College Cost Analyzer shows both college retention and graduation rates. Having all of this information in one place increases you chances of making the right decision.
Summarizing the colleges by cost
The summary included in the EFC PLUS award tool sorts the colleges by the lowest net cost. We understand that cost is not the only decision point in the college selection process. The college decision will also need to include other factors outside of the financial items such as retention, graduation rates, academic strength, size , location, and job placement to name a few. These are just some of the subjective items that need to be analyzed to make the best decision.
Here are a few other benefits the EFC PLUS College Cost Analyzer provides:
- Warning of front-loaded award letter
- Minimizes the risk of transferring and lost credits
- Identify risk of financial gap
- Proper understanding of college debt structure
We understand the difficulty of the college selection decision. This commitment involves both factual and subjective inputs. It is a very emotional decision. The goal of the EFC PLUS college planning software is to inform families of the projected net college costs of each college based on their situation. Being comfortable and understanding your own customized budget is a step that should be done before you submit the enrollment deposit. Do not let your college debt decision become a lifetime burden.