Impact of the College Transfer
During the months of February and March, EFC PLUS will have both blogs and webinars specifically geared to the college financial decision. Our information will give families better clarity on their financial aid award letters and insight into their financial future. The goal of the series “Making a Better College Decision” is to help students and parents find the best college fit. We are trying to reverse the trends of declining graduation rates, increased transfer rates and growing student debt.
This blog post is the first part of four articles focusing on how to analyze the financial aid award letter. The first goal is to help families understand the cost at each of the colleges that the student has been accepted to. Each college has a cost of attendance (COA). The COA is the average cost per student at each specific college. The cost of attendance includes tuition, room, board fees, books, transportation and personal expenses.
This number is important since it is the starting point of the financial aid award and is a major factor in the final net cost each year. The COA is subtracted from the Expected Family Contribution to determine the financial need at a college. A family gets their EFC after completing the FAFSA.
Some schools have a secondary financial aid process, which is called the institutional method. The most common institutional method is the CSS Profile. The Institutional Expected Family Contribution (EFC) is often not disclosed and will vary by institution. This may make the award letter harder to understand when these schools are on a student’s list.
Included in the cost of attendance are books, travel and personal living expenses. These amounts are not paid directly to the school and are considered indirect costs of college. These can vary greatly by student and can be controlled better than the tuition, room and board cost.
A student’s travel costs and personal spending are two expenses that can vary and are highly dependent on the individual student. Keep in mind that the personal living expense may be a highly variable amount based on where you attend college. As an example, the cost of doing things in New York City will be much higher that a rural college town in most states.
At the same time, the distance from home and the method of travel will impact travel cost. When creating a travel budget consider the modes of travel and timing. During high travel period, when demand is high, costs are normally also higher.
Distance from home can also affect other family cost. Based on the location of the selected college, parents must include their own travel to visit their child as an expense. Non-student travel, hotel and meals are not part of the COA. If you have a child attending a college that is not close to home, this expense could quickly add up especially if a plane fare is needed. In our own experience, we had a daughter who was very homesick in her freshman year and we had increased bus and car expenses involved in driving 3 hours to get her back to school.
The cost of attendance is adjusted each year by the college to reflect changes in the cost of living and changes in tuition. If a family is trying to create a four-year financial plan, housing may vary each year. Many schools may also only offer housing for a limited number of semesters and investigating these costs can help in your plan. Living off campus may be less expensive. It can also be a shock, since many leases need to be signed in the fall for the next school year.
An advanced feature of the EFC PLUS College Cost Analyzer is that allows the family to create a customized cost of attendance. Once the student receives their financial aid award letter, they can enter their financial awards which will result in a better projection of a family’s net cost. The software then compares all of the colleges in the same format.
The College Cost Analyzer takes the award letter and projects a four-year cost analysis by college. This is important because it factors the changes in the Expected Family Contribution due to the dynamics of the family timeline. Additional helpful information shows funding gaps that may occur over the four years. The student and parents can get a better understanding of what loans will need to be taken to pay for tuition. With this approach, families can make better college decisions and avoid excessive student loan decisions. It can help them find the best college value.
As part of our “Make a Better College Decision” program, EFC PLUS will have a webinar for the Financial Aid Award letter. It will be held on February 23, 2017 and on March 29, 2017. Click here to register for the webinar.