Many people ask me: “How much does college cost?”
Before providing a number, I am reminded of the families who have saved thousands using the college success plan and those whom called years later wishing they had followed the path’s outlines. Now, how I answer that question will impact the colleges they select and potentially the happiness of their child for the rest of their lives.
See, if I tell them the average private school’s cost of attendance (COA) is $42,000+ annually, they might dismiss all private schools as too expensive. The same would happen if I told them that the average out of state public school cost is $32,500, they might think “I can only afford to stay in Georgia.”
What people need to ask is: “how do I save save and have a successful outcome?”
So, how much will college cost your family?
At our Partner in Education free workshops with the local high schools, we educate families on the cost of college and tell them the list cost is only a “sticker price.”
One of the most important facts is that the cost of college is dependent on your Expected Family Contribution (EFC), not the listed price on a college’s website.
Every family will pay something different depending on their financial information. It is very similar to walking on an airplane, you know everyone has paid something different and it was based on the situational variables at the time of their ticket buying decision.
College is no different and your family will have many variables that will impact your costs. However, your family’s expected family contribution (EFC) should and better be your initial starting point.
Why is your expected family contribution (EFC) so important?
Your EFC is the guidepost schools use to calculate what your family can afford at their university. It’s the first domino in the college planning process because you can’t start selecting colleges before you know what the possible costs might be for your family.
Your family’s EFC will tell you how you should look at schools, and how they will look at your family. Some people in the college planning community haven’t been trained, or do not have the background to calculate a true EFC for a family.
Think about it, would you go to an attorney to do your taxes? Of course not, you might need an attorney to help you with your tax situation, but they have no experience or training in tax returns.
The same is true for calculating a family’s expected family contribution. You should not go to just anyone, you should go to a financial professional that specializes in college financial planning…a professional that has experience with financial aid and college selection.
The research points out that 80 percent of families pay more than their EFC.
Why do they overpay on college?
It’s because they did not properly calculate their expected family contribution or ask “how much does college cost for my family?”
So, before you get someone to review your EFC, make sure they have a financial planning background and the ability to help you with all the ways to lower your EFC. Ask this question: what’s your experience with financial aid, financial planning, investment planning and tax planning?
Three tips for a proper EFC Review:
1) Verify the professional’s financial experience for your analysis.
2) Make sure they can explain the three methodologies to calculate your EFC.
3) Ask them what licenses they have if they recommend repositioning your assets? Anyone who is not a registered investment advisor should not be making recommendations on repositioning your investments.
By finding a team with financial training and an experience in college guidance, your child can attend their dream college without you going broke.
So in conclusion, I always answer the question on how much college costs with two questions:
- Do you know your EFC?
- Do you know what it should be?
If you can answer yes to both questions, we can tell you how much college will cost.
If not, you might overpay.
Schedule a 20-minute EFC call with our team, or a free 1 hour college EFC review and college consultation.
Here are some additional posts that can help you lower college costs:
- College Funding 101: How will I pay for this?
- Early Action Vs. Early Decision
- My student goes to private school, why do I need a college planner