Graduation...and summer. Times of wonderful memories and lots of productive activity...And for parents of college bound students, the bill for fall college tuition is looming.
With college the 2nd most expensive ticket item in ones life, every year parents and students continue to make life altering choices, that will enslave them for decades. Parents haven’t saved enough, and neither have students. In many cases, the family is has barely enough money for the first year, and has a “pay as you go” plan for the rest…of the 4, 5, or 6 years.
And the hard truth is that large portion of students will either change schools, change majors, or drop out entirely, after the freshman year. Just got a call from a family whose child is supposedly heading to USC in the fall…they said they were going to “pay as we go”…but already have run into financial problems…and he is not even gone yet!
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So what about this ZERO Debt gig???
Zero debt starts with knowing what your family can afford (out of pocket), and applying to the right schools that will give the appropriate ratio of need and merit aid, good work opportunities, and the opportunity to get out in 4 years or less. Some colleges have a “no loan” policy, some pay full tuition if the student gets admitted…some give a LOT of money for those who have fallen on financial hard times. The family needs to know what those ratios look like, and work within them. That starts WAY before the senior year of high school.
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When a school implements a no-loan policy, the loan component is eliminated and replaced with grant money and sometimes a modest work-study. The family must still come up with their expected family contribution (EFC), but having no loans in the financial aid package is a marvelous feature.
Princeton has long been a leader and innovator in implementing generous financial aid packaging policies. The university has had a “no-loan” financial aid policy for years. Many highly-selective schools are beginning to adopt this policy.
More than 60 private colleges offer financial aid that meets 100% of a family’s need. The package may vary, however, from school to school due to the fact that financial aid has three components: grants (free money), work-study (work it off) and loans (pay it back with interest). Schools have a variety of policies when it comes to “packaging” these components. Often the mix consists of a high portion of university grant money and a smaller portion of loans/work-study.
For families with incomes under $60,000 several universities including Princeton, Harvard and Stanford offer near full-ride university grants. Sadly, few families in this income range tend to be aware of this, and the result is that many students who would qualify for such help fail to apply to colleges with sticker prices of $60,000+.
It’s important to note that for those families whose EFC is higher than the college’s cost of attendance, the no-loan policy does not apply. Unsubsidized Stafford loans, parent PLUS loans, and private education loans are still viable options to help pay for college.
For more info, go to the website: www.GetCollegeFunding.org
