For parents just starting the college search, there are certain college search vocabulary words you need to understand. Today I want to lay a few of these out and provide you with resources to check out for more information.
Expected Family Contribution (EFC) – This is how much a college will expect you to pay for your student’s education. It varies by college. There is also a federal formula for assessing the EFC through the FAFSA, the next term explained below.
FAFSA – This is the Free Application for Federal Student Aid. Most colleges use FAFSA to assess EFC and dole out financial aid. You must file the FAFSA to be eligible for federal student loans. You have to re-file every year that your student is in college and the FAFSA application opens on January 1 of each year. When you want to file, make sure you are on the real government FAFSA site. There are a lot of services that pretend to be the site and then charge you to submit your application to the government.
FAFSA4caster – A FAFSA estimator provided by the government that you can use when your student is in high school to get an idea of what the FAFSA will calculate as your EFC.
Net Price Calculator – A tool that college websites provide for you to estimate the financial aid they will offer your student. Sometimes these also calculate merit aid (defined below). The net price calculator is extremely valuable to help you know how much a college will actually cost. You can usually find the net price calculator in the Admissions or Financial Aid section of a college website.
529 Plan – Currently, this is one of the best ways to save for college. Plan earnings grow tax free and many states offer state tax breaks for savers. The money withdrawn must be used for qualified educational expenses to avoid taxes. The 529 plan has been in the news a lot recently because President Obama is proposing taxing 529 plan earnings as student income. This may change the desirability of this college savings medium.
Merit Aid – “Free money” that a college offers your student based on merit and not financial need. This is usually related to a student’s GPA, ACT/SAT score, and possibly other things like class rank, leadership ability, or community service.
Talent Scholarships – Some schools offer free money for talents such as music, art, theater and dance. These scholarships usually require an audition or a portfolio submission. Check the school websites for details.
Athletic Scholarships – Most people know that colleges may offer scholarships to attract athletes, but most people don’t know that the majority of these are not full-ride scholarships and only specific types of colleges can offer athletic scholarships. The NCSA website is a great place to go for all the details.
College Search Spreadsheet – A way to keep track of all the information on all the schools your student is or may be interested in. I have a free template for you to download.
There are many more college search vocabulary words you will run into as you start preparing for your kid’s college search. I encourage you to use all the websites that are available to help you in the college search process to learn more about all of these terms. My Top 10 College Search Information Websites is a great place to start finding websites that will be invaluable in the college search process.