<p>Congratuations on thinking ahead. All of the college guides advise you to pick your schools without regard to their costs because you may qualify for a lot of financial aid. This is true, but there are also ways to estimate in advance how much financial aid that you may qualify for. Most financial aid is based on need and not merit. All FA at the Ivy League schools is based on need. This is not to say that you won't get a merit scholarship, but the following will provide the basic information about awards based on need.</p>
<p>First, each college calculates their own COA (cost of attendance) which is the total of everything to attend their school. It includes tuition, room and board, fees, books, and money for travel. Except for minor differences, this is pretty much the same number for all students. Students who live farther away may have more money allowed for travel.</p>
<p>For each student, the college will calculate the student's EFC (estimated family contribution). This is the dollar amount that they expect you or your family to actually pay them. Go to the following website to find a EFC calculator to estimate what your EFC will be: </p>
<p><a href="http://apps.collegeboard.com/fincalc/efc_welcome.jsp%5B/url%5D">http://apps.collegeboard.com/fincalc/efc_welcome.jsp</a></p>
<p>When you actually apply for aid, your parents will fill out a federal government FAFSA form (free application for student assistance) as soon as possible after January 1st. This form can be filled out online. The federal government accepts all of your information about income and assets, calculates your EFC, and then sends it to any colleges that you request it to be sent to. Income is the thing that will raise the EFC the most. Only about 5% of your parents assets will be used in calculating the EFC while 35% of assets in your name will be used. The equity in the family home and money in retirement accounts will not be used. The value of cars will not be used. The number of children currently attending college affects the EFC. Because your assets raise the EFC so much more than your parents, you don't want any money in your own name.</p>
<p>You may also have to go to <a href="http://www.collegeboard.com%5B/url%5D">www.collegeboard.com</a> and submit a PROFILE which contains basically the same information. This is in addition to the FAFSA form.</p>
<p>Once the financial aid officier has the COA and EFC, they will calculate your NEED by subtracting the EFC from the COA. The COA and EFC are calculated separately and then used to obtain the NEED. If your EFC is $15K and you go to a school with a COA of $40K, your need is $25K. If you go to a school with a COA of $20K, then your need is $5K. The college will try to meet your need. They will try to meet your need with scholarships and grants (free money), loans, and work study. </p>
<p>The problem with this utopia where your need is meet is as follows: 1) Some people have a very high EFC. 2) Some colleges may not meet all of your calculated need. </p>
<p>In either case, you must get more money from somewhere. Your parents might get a home equity loan or you might get student loans not associated with the college. The federal government is a source of loans to be taken out either by your parents or yourself or both.</p>
<p>Different colleges have better FA packages than others. A prestigious school with a tuition of $32K will take the full price from the people who can pay it, and give deals to those who can't. Whether or not this is fair is a social question such as whether or not the rich should be taxed more so that we can increase welfare to the poor. Colleges publish the average freshman grant and the average indeptedness of a graduate. I would say that a $20K debt upon graduation is considered acceptable to them. Schools with big endowments will use grants to meet your need, and other schools will use loans. </p>
<p>The people who are really squeezed by this are middle class families, particularly when both parents work. A lower income family may have to pay only a few thousand dollars if the child goes to Harvard or State U. Lets say that a poor family has a EFC of $5K, then .... If the COA at Harvard is $45K per year, they will get a FA package of $40K where the grant is $35K and loans are $5K. If the COA at State U is $25K, they will get a FA package of $20K where the grant is $15K and loans are $5K. They pay the same for Harvard as they would for State U. In fact, Harvard might be cheaper. If you apply to an expensive school, your need is greater and you may get a bigger grant. The money is based on need and not merit.</p>
<p>Your parents should go to one of the EFC estimators on the web, and look up what their EFC is likely to be. The EFC is most affected by income, and from what you said, I would expect it to be about $25K or $30K. This is truly outrageous. It means that the college expects you to pay over $2K per month because your father makes $98K per year. (Is it possible he may be retiring soon?) Nobody could do that. </p>
<p>With an EFC of $25K, a private college with a COA of $43K would probably you a grant of $13K and a loan of $5K per year. (43 - 25 = 18 and 13 + 5 = 18). You still have to come up with $25K per year and this needs to come from savings or home equity loans or federal loans.</p>
<p>In a lot of families (particularly when both parents work), the EFC exceeds the COA, and they get no help.</p>
<p>When choosing colleges, it is good to have both academic safeties and financial safeties. A financial safety would be a public state school that you know you can afford even with no financial aid.</p>