I am trying to advise a parent of high school junior about financial aid estimating resources, but my own experience is almost 10 years old. Is this a good place to start? - https://studentaid.gov/understand-aid/estimate
Or do parents tend to look for more college-specific estimators, once some target colleges are defined?
Checking each college’s net price calculator to determine whether a college is a financially realistic target is a commonly advised process. That should be done early in the process of considering the college, rather than at the end which may result in throwing away a lot of work researching the college’s other aspects.
If the college’s net price calculator indicates that need-based financial aid is insufficient, but merit scholarships are available, the reach/match/likely/safety designation for the college must be based on the likelihood of getting the needed-for-affordability merit scholarships, not just admission.
Students now can use the net price calculators which are on every college website.
If the parents aren’t divorced, don’t own a business, are not self employed, don’t own real estate other than their primary residence…and are not international students…the net price calculators should be a decent estimate.
They did not exist 10 years ago.
The parent could also start their own CC account and ask questions. I’m sure they would get good responses.
Yes, use the NPCs for each specific school, but some require FAFSA EFC (actual or estimated)…so do complete the fafsa4caster at the link above.
Some NPCs are more accurate than others, and for merit giving schools some will include that merit, some won’t. So you do have to look into the details.
Good luck.
If the parents are divorced, things get more complicated.
@ucbalumnus I put that about divorced parents in my post above.
If you answer NO to all of these questions, the net price calculators will give a decent estimate:
If no to all the above, and the family has really W-2 income from employers only…then the NPCs are a good starting point.
Myintuition.org has a simplified estimator and includes quite a few schools. Most people can probably fill it out without using tax forms. It provides a good ballpark estimate and also makes the range of “need” calculations apparent. Then I’d follow up with the more detailed NPC at schools of interest, which require more info and will be more accurate.
There have been reports on this site about the inaccuracy of myintuition.com. If you can complete this by guessing numbers instead of using your tax forms, it’s likely not going to be as accurate as the net price calculators on the college sites.
It’s always best to use college specific estimators, and VERY accurate numbers from tax returns and assets. Garbage in, garbage out.
@thumper1 Yes, as I mentioned, the NPC will be more precise because it asks for more detailed information. But myintuition is a good place to start in order to get a ballpark range based on very few questions. It is, in fact, a “college specific estimator”, and colleges themselves point people to it as a first step for an early estimate.
Regarding #6 … my spouse and I are both self-employed, 1099 workers. We have found NPCs to be very accurate. We are in professions that have no assets and no sale value. Examples of such professions include: consultant, tutor, counselor, freelance journalist, freelance graphic artists, musicians.
You are lucky. If you don’t take business deductions for tax purposes it would be OK.
But some colleges do add back some business deductions as income
We do take business deductions. But they are reasonable and expected. Office rent is the biggest one. The ones that FA offices don’t like are things like depreciation on equipment and multiple thousands in entertainment expenses.
^^^they ALSO add back in deductions for IRA retirement accts.
Probably why divorced parent situations give so much trouble. Many divorced parents do not want to reveal finances to each other, so no one person can know all of the correct information to put in the net price calculator (even if it accounts for divorced parent situations like many do).
@brantly exactly…entertainment, travel, cell phones, home office and home office utilities, clothing (unless it is something very specialized). Those deductions frequently get added back in because they are expenses you would have anyway…even without your business.
Wow - thanks for all the feedback.
I thought of other general tips for parents new to these threads (other should feel free to clarify / expand as needed)
SIBLINGS: The family EFC (Expected Family Contribution) is spread across the in-college students (at least for FAFSA I think; CSA may vary). So even if no need-based Financial Aid possible with first child alone, that could change for years with more than one student in college.
At most schools, you can’t “stack” Merit Scholarships and need-based Financial Aid.
Many schools are not able to meet “Full Need” (by FAFSA or CSA forumulas) . Or if they do it may be heavy on parent loans. The Ivy League schools are hard admits, but they seem to have best chance to meet full need.
For FASFA purposes, when there are two in college, the total EFC will be split roughly 50/50. BUT this doesn’t mean your student will get a nickel more of need based aid when a sibling joins them in college. Most schools don’t meet financial need for all…so this expectation of more money with more kids in college shouldn’t be an expectation.
For Profile schools, the total family contribution is usually 60/60. But again…not every school meets full need.
A suggestion that is less than perfect…run the net price calculator with one in college, and then again with 2 in college. See what the difference is. But keep in mind, the NPCs are set up for incoming freshmen so this should not be a laid in stone estimate
"Most schools don’t meet financial need for all… " - Excellent reminder.
The Need (Cost - EFC) is the best case assistance, but at most schools the Financial Aid package will not cover full Need.
Some have limited stacking, where merit scholarships can replace expected student work earnings, federal direct loans, and/or unmet need before reducing FA grants. However, only a few colleges publicly state their policies on how merit scholarships and need-based FA are handled.
Some have discounts that are both merit and need based. These can include merit scholarships whose amount varies by need, merit scholarships that have some need-based eligibility requirements, need-based grants that require a specific level of academic stats (e.g. some state grants), or need-based aid that is “preferentially packaged” to admitted students that the college is most interested in enticing to matriculate.
For everyone. Not just self-employed.