Paying for College

As your student enters the final summer before college, things are about to get real. Your family will soon pay the first bill to cover tuition and fees, and possibly housing and dining, for the first semester. Having a plan for not only the first bill, but all college expenses, will make life easier.

Why It Matters

A full financial plan is essential.
Imagine telling your student that there is no more money available after the first two or three semesters. Having a plan to pay for an entire college career will help avoid that scenario.
Financial aid is complicated.
The process of applying for, receiving and using financial aid can be difficult to navigate. The delayed 2024-2025 FAFSA implementation and processing this year has definitely complicated matters. A plan helps ensure that all steps are completed in a timely manner.
Know what loans are required.
If your student will be relying on student loans or loans that you borrow to help fund college, it’s important to understand the loan process and a reasonable amount of debt for the desired degree.

What Your Student Can Do Now

Understand complete cost.
If it hasn’t been done already, your student should make a realistic estimate of total college costs between now and graduation (March Article Two on your personal dashboard). The financial aid offer and our College Funding Forecaster can help. Another helpful tool may be this formula handout. Determine the tool that makes the most sense for your family, or create your own.
Create a financial plan.
If you have a financial aid offer from the preferred school, your student should determine how much of the total college cost will be paid for from savings, previous and future earnings, family contributions, scholarships, other aid and loans for each year of college, whether that’s two or four years. Remind your student that some awards are available for only one year, so they may need to come up with ways to replace some of that aid. Even if a financial aid offer hasn’t yet been received, information about costs, fees and scholarships are available on college websites to aid in using the College Funding Forecaster. Your research and patience will be worth it in the end!
Complete outstanding financial aid items.
If your student is asked to provide additional documents to the school due to FAFSA verification or because of other requirements that are specific to the school, it does not necessarily mean any aid will be denied. The college may be performing required due diligence or have valid reasons for requesting these documents; it’s important to comply quickly and completely. In addition, your student may need to formally accept or decline aid through an online portal or form.

What Your Student Can Do Later

Evaluate the need for loans.
If it appears your student will need to take out loans to cover any gap after considering available financial aid and existing funds, they should make informed decisions (March Article One on your personal dashboard). One important guideline is that students should not take out more in loans to pay for a degree than they expect to earn during the first year out of college.
Complete federal loan entrance counseling.
If your student will accept federal student loans, they will be required to participate in entrance counseling. This presentation is designed to be sure your student understands the responsibilities of taking on debt and the obligations to repay it in the future.
Accept loan terms.
Before loan funds will be sent to the college on your student’s behalf, they will need to review and agree to the loan terms. Federal student loans have a promissory note — called the Master Promissory Note or MPN — that your student is required to sign. Private student loans have a similar agreement called a credit agreement. If your student has questions about any of the information in these documents, they should consult with the financial aid office or the lender before signing.

What You Can Do

Be honest.
As we’ve mentioned before, it’s important for you and your student to both understand expectations when it comes to paying for college to avoid unpleasant surprises later on. Revisit the topic to be sure your student is making realistic plans based on actual financial circumstances and reinforce the understanding of how much your family will contribute.
Review your financial aid to-do list.
If you and your student have filed the FAFSA, be sure to check its status with the college’s financial aid office to see if additional information or documents are needed. Submitting them in a timely manner will ensure there are no delays in receiving financial aid. We’ve included some financial aid terms in the right sidebar for additional assistance.
Understand the commitment.
When you cosign a loan for your student, you become equally responsible for the debt, even if your student doesn’t graduate, doesn’t find a job with the expected earnings or has other difficulties. If you plan to take loans yourself to help your student with college costs, understand that the debt will be your responsibility from the lender’s standpoint, regardless of any agreement you make with your student.

Next Steps

Be sure to complete the survey questions at the end of this article to be entered into the 529 deposit giveaway!

Additional references, handouts and talking points are available in the right sidebar to use at your leisure. They may prove beneficial to reference now or after receiving future emails — we’ll leave it completely up to you. Use our emails like a recipe for a successful outcome — assemble the recommended ingredients and then follow accompanying directions to add flavor and depth.