her belt, earning both a high school
diploma and an associate’s degree. While
the family estimates this saved them
about $22,000 in college tuition, it ended
up hurting their financial aid chances.
“Maeghan is not considered a first-
Scholarships and grants
time college student,” says Sam. “Most
of the financial aid we have found wants
her to be a freshman entering school
“Earning college credits while in high
school is a great idea,” says Schwartz,
explaining that most students do this to
get ahead academically. “Just make sure
the college will actually give you credit
toward graduation.” And that those cred-
its won’t affect your ability to qualify for
Most scholarships and grants come
from the schools themselves, versus private organizations. Making sure your
child qualifies for freshman scholarships
It’s what swayed Beth Brody’s son,
Jake, to attend James Madison University
in Harrisonburg, Virginia. The Costco
member received a merit-based scholarship in STEM (science, technology, engineering, math) as an incoming freshman.
It cut tuition costs by a quarter. As long
as Jake keeps his GPA above 3. 25, the
scholarship renews each year.
Jake is covering half of the remaining
Plan for limits
cost of college, through savings, part-time
work and two small scholarships he
received from civic organizations in
Flemington, New Jersey, where he grew
up. His parents are covering the other
half, through 529 plan savings and
income. All told, Jake’s cost of attendance
is $27,812 for his freshman year.
“The Federal Direct Unsubsidized
Loans are offered at an interest rate stu-
dents likely won’t be able to find any-
where else,” says Schwartz, “so if they
need to borrow, they absolutely need to
max out what is offered through these
Still, families need to be aware that
there are limits to how much a student
can borrow from the federal government:
no more than $31,000 total over their
entire undergraduate education. Without
proper planning, this could lead to the
need to take out private loans at much
higher interest rates.
And proper planning is, unfortunately, not done nearly enough. Sallie
Mae reports that fewer than 4 in 10 families actually have a plan in place to pay
for college, which results in many students on the hook for huge loan amounts
when they graduate or unable
to afford the college of their dreams.
Making a plan
• Visit colleges sooner. Even
middle school students can
benefit from time on a college
campus, taking a tour and
attending an information
session. This is usually when
you can ask questions about
tuition, financial aid and more.
• Become familiar with the
Net Price Calculator. The
U.S. Department of Education requires every college
and university that receives
federal student aid funding to
have this on its website. This
calculator helps you estimate
your child’s expected cost
of attendance. It may not be
exact, but it will be eye-opening about how much college
• If you think taking out loans
will be the best way to pay
for college, spend the years
before your child enrolls
improving your credit score.
Parents with excellent credit
are likely to get private college loans at a lower interest
rate than parents who do not
have a good credit history.
• Encourage your high school
student to take the most
challenging class schedule
within reason. This will make
your child more attractive to
colleges and might help them
get more merit aid.—LI
Decoding the definitions
529 plan: A tax-free way
to save for college.
Expected family contribution
(EFC): EFC is the amount
the college believes families
can afford to pay for college.
It is often much more than
parents believe they should
have to pay.
Cost of attendance (COA):
COA includes all of the costs
your student is likely to incur
at college, including tuition,
housing, books and fees.
Grants and scholarships:
Financial aid that does
not have to be paid back,
Free Application for Federal
Student Aid (FAFSA): The
FAFSA is the only way to
qualify for federal student
Need-based aid: Financial aid
based on parental income,
or lack thereof, in the form of
scholarships, grants, loans
and work-study jobs.
Merit aid: Financial aid, in
the form of scholarships and
grants, based on a student’s
academic or civic merit.
Pell Grant: Federal grant program for families earning less
than $50,000 annually.—LI