My twins completed high school in 2022 and entered a state University. Like many parents, I spent countless hours trying to understand the process and getting information. I then had many sleepness nights wondering how we could make this work from a financial perspective.

Here are some key points I wish I knew a year ago ….

Like many other parents, the last year of my children’s high school was very stressful – for both parent and child. During that year, I spent time talking to other parents who have already gone through this process, read a lot of articles and spent time thinking about what was best for all of us.

This blog is purely based on my experience – its only one datapoint.

Depending on your specific situation, only some of this will be relevant to you. All I am trying to do is convey some key pieces of information I wish I knew.

Background

In order for you to decide how much of this blog is relevant to you, here’s some context:

• Both of my children want to pursue careers which require Graduate education. To me, that meant the key was for them to get a solid undergraduate education which would enable them to get into a good Graduate school.
• The kids went to a very good public High School in Maryland. Our particular county has very high standards for a public schools.
• Given that our kids would need Graduate School, we wanted to preserve as many financial resources as possible while providing a solid stepping-stone towards their careers.
• One kid focussed primarily on Public Universities, with a couple of Private Universities.
• The other kid focussed much more heavily on Private Liberal Arts schools, with fewer Public Universities.

Pressure from Colleges and Universities

Here’s the first hard lesson: colleges and universities put a LOT of pressure on kids. They will actively send out a lot of email, glossy brochures, applications, etc. It is nice to get invitations from top schools, even Ivy League schools, but keep in mind there is zero commitment from that school!

In our case, I felt all these schools achieved was putting undue pressure on my kids, especially when they correspondence from elite schools. 

Both my kids had a set of schools they were interested in, including some top-notch Universities. All this correspondence achieved was continually make them second-guess their choices.

College Tours

To me, this is another aspect of Colleges putting pressure on kids and families. In those communications, they would invite you to tour the campus. In all the invitations we received, only one offered to pay for any costs!

Unfortunately, College Tours were a point of contention in my family. My perspective was that a college tours are not cheap and its better to apply and then tour if you got accepted. 

I think I was the in minority here, I saw many families tour dozens of schools and spend thousands of dollars in the process.

After my kids got their list of accepted schools, we then toured the top 3 or 4 Universities. It really felt like a sales pitch with the tour guide really accentuating the positives. However, we did find that when we asked pointed questions, like “why did you pick this University?“, the guides were pretty candid in their response.

FAFSA

If you don’t know this form already, you soon will!

Basically, you put in all your financial information, including submitting tax returns, and they determine an amount they believe you can afford to pay for college.

When I filled out the form, I had no idea how much this would affect our financial decisions!

FAFSA and Cost Calculations

In our case, the FAFSA number came back as $40K. In other words, the College Board, which does the calculation based on some proprietary formula, has decided we can afford to pay $40K per child per year. That’s right, FAFSA has determined we can pay up to $80K / year based off some proprietary calculation!

FAFSA and Liberal Arts College cost:

The following is an representative example cost breakdown. This will give you an idea of what the school provides in their Financial Aid package. 

Again, this is my experience, yours may be quite different!

• Typical total cost: $85K (includes board, tuition, books, fees, etc)
  • Parent contribution: $40K (per the FAFSA calculation)
  • Financial Aid: $35K
  • Student Loan: $5K
  • Work/Study: $5K

FAFSA and Public University cost:

In our case, Public University is less than $30K, which in our case, is less than the FAFSA Parent Contribution (which was calculated to $40K/child).

This effectively means that the Public Universities will not offer any Financial Aid and its up to the Parents to pay the cost. In our case, our kids managed to secure some merit-based scholarships which helped!

Other Financial Pointers

• To my surprised, when one of my kids got into Public Universities in other states, they were offered some financial aid. Basically, the aid they were offered made their cost comparable to our in-state tuition.
• If your kid wins a substantial scholarship, it may negatively affect their Financial Aid offer. For one of those Liberal Arts schools, they said they would deduct 50% of the scholarship amount. For example, if my kid won a $5K scholarship, they would deduct $2,500 from their Financial Aid.

Final Thoughts

Navigating the college application process is not easy! In our case, there was a lot of stress for both parent and kid.

For one of my kids, the decision was easy. 

For the other, it was not. They did not get into their dream school and the Liberal Arts university packages simply didn’t make sense, given the need for Graduate school.

There will be a lot of distractions during the process, from teachers, family and of course, the universities themselves. You may need to course-correct once you get key pieces of information, like your FAFSA contribution and the list of accepted schools. My best advice is to try and get your priorities in order, and only adjust when necessary, throughout the process.