Know before you go  - College Pre-Approval™

Know before you go - College Pre-Approval™

September 12, 2018

Now that high school is back in swing, many Seniors will be starting their college applications and targeting schools.  My experience from meeting with my clients is that many parents are not giving their children clear guidance on what type of schools they can and should target that fit into the family finances.  Not guiding this process can cause a lot of conflicts for your family.

Here are some starting tips as you plan for this process:

Know your EFC(Expected Family Contribution):  What will colleges expect you to contribute?  This will be determined through filling out the FAFSA form or for a private school the CSS profile.  Be sure to read the instructions before you start to fill these forms out because they can be very confusing. In general, you do not include any assets designated for retirement on the FAFSA but that is not very clear.  A recent change is that you can use your income from the 2 years prior so you don’t have to wait until your taxes need to be filed to calculate this.  For example, for current seniors, your EFC will be calculated from the 2016 tax return.  Your income has the biggest impact on your EFC.  Some more details on EFC can be found at

What Cash flow will free Up?  If you child has played a lot of club sports, you may have some extra cash flow that you didn’t think about.  Hockey and Cheer parents will have a lot.

Will you get any tax credits?  Education credits can be used to offset the cost also.  Do you qualify?

What scholarships might be available?  Know if a school gives Merit scholarships or only Need based.  Many of the elite schools give NO merit awards.  Unless you are prepared to pay $60,000 per year, you may want to reconsider if your child applies to these schools.

What is an acceptable loan amount?  All jobs are not created equal.  An engineer will have far more capacity for loan payments than a social worker.  Be the adult and be honest with your child.  The most your student should take in loans should be their first year starting salary.

Once you have some of these numbers, you have a budget amount that your family can afford. 

Assets available + Cash flow Available + Scholarship + Tax Credits + Total Loan = Funds Available for College

The sum of these equals your funds available as your student starts looking for schools.

Think of this as College PreApproval™ – Just like Mortgage PreApproval.