COA - EFC = ??? The Financial Aid Award Letter

This is the season for college acceptances--which means it’s also time when financial aid awards are made.  If you’re like me, the whole financial aid process remains pretty obtuse. 

First of all, there are so many terms and forms to consider from COA (Cost of Attendance) to EFC (Expected Family Contribution) from FAFSA (Free Application for Federal Student Aid) to the CSS Profile (a not-free application for aid requested by many private schools). 

Then there is the application process itself, followed months later by sending in (before April 15) tax forms. Finally, a financial aid letter appears alongside the acceptance letter.   Now it’s time to sort out what is actually aid or grant money and what parts of the award are loans, both subsidized and unsubsidized.

I’m not a numbers whiz or a financial expert, so I’m not giving advice here.  I’m just empathizing with students and families who not only have to determine the best-fit college in these coming weeks, but

they also need to analyze their financial aid offers carefully.

Just a few observations about interpreting financial aid awards gleaned from my financial aid expert friends and workshops I’ve attended:

--Merit Aid is not Financial Aid.  Some schools, often in an attempt to raise their academic profile, offer aid or “discounts” to students with strong academic records.  This type of aid is not dependent of financial circumstances.  It can be a boon to middle class families whose children would like to attend liberal arts colleges but find them too expensive compared with state universities.

--Different schools offer widely different packages and combinations of grants and loans, as they base their decision on a variety of criteria.  And some schools have larger endowments to give from!

--The award contains aid from various “sources,” that is part of it may be federal and state grants, which aren’t repaid, part of it may be subsidized loans, which are repaid with interest after graduation, and part of it may be unsubsidized or private loans, which accumulate interest while the student is attending school.  Work-study, or the student’s on campus job, will also be included.

One example of an financial aid letter: I volunteer with a low income student through College Track, a college preparatory program that helps students from under-resourced schools perform well and apply for college.  My advisee has applied to California State University Schools as well as some local private universities.  Last week she was overjoyed to receive an acceptance from Notre Dame de Namur University until I pointed out that over $17K of her financial aid award consisted of unsubsidized loans.  For a student with an EFC (Estimated Family Contribution) of 0, that amount is untenable.

--If your student is awarded a scholarship, the amount of aid will be adjusted.  Some schools reduce the self-help (work-study) level before replacing institutional aid or grants; others don’t.

--If the financial aid letter truly doesn’t meet your student’s financial need, you can appeal.  It

helps to have offers of aid from other schools for a comparison basis.

If you need help figuring out how to finance your child’s college education, there are experts out there who can guide you.  I highly recommend my colleague Beatrice Schultz at Westface College Planning, who will not only explain award letters much better than I, but she can lead you through a step-by-step process of preparing a budget for college costs, applying for aid, and maximizing your tax savings.

When it’s time to fill out the FAFSA and CSS Profile in January, (which you/your student will need to do every year while attending college), there are also online resources to help including:

--Studentaid.ed.gov (U.S. Department of Education)

--Finaid.org (a private, non-profit website offering information on loans and scholarships)

--Bigfuture.collegeboard.org (the College Board website, the organization that administers the CSS Profile)

Thoughts on the “new” SAT 2016

The New York Times has featured several articles recently about the College Board’s decision to change the format and contents of the SAT in response to relentless criticism from students, educators, and college admissions staff among others.  In my view, the changes, mostly to the reading and writing sections of the exam, are for the better, but the reasons for the reform and the results of them might be somewhat different from what is discussed.

First, a summary of the changes:

--The essay section will become optional and will be an analysis of a passage rather than an amorphous reflection on the relevance of a quotation.

--No more abstruse vocabulary sections—instead the exam will ask students to define words used in daily and school.

--Reading passages will include texts from “founding” historical documents such as the Constitution, the Bill of Rights, and the Gettysburg Address. Students will select answers based on evidence from the passages themselves.

--Calculators will be permitted only on part of the math sections. 

--Math sections will focus on problem solving, data analysis, algebra and complex equations.

--Tests will be structured more like “achievement” or AP tests.

--No more deductions for incorrect scores.

These are significant but not radical changes.  They will shape the test to be more like the SAT’s competitor the ACT, which has content drawn more from actual high school coursework.   In the past few years the number of students taking the ACT vs. the SAT has risen considerably, so one might argue that the College Board, the non-profit organization that administers the SAT, is responding to its competition.

Whatever its reasons for reform, the new College Board president, David Coleman, appears to be genuinely concerned with reaching more high achieving low income students, who have not had the advantage of taking prep courses for exams.  He is working with Khan Academy to develop online tailored tutorials for any student who wants to take the test, hopefully leveling the playing field at least to some degree.

A few cents of advice gleaned from reading and experience:

--Be wary of test preparation courses.  They may be helpful in instilling discipline for studying, but they cannot guarantee score enhancement.

--Consider opportunity cost.  After our daughter Lily performed much better on the ACT than the SAT, despite taking a Revolution Prep course for the SAT, she decided not to re-take the SAT, but to submit her ACT scores instead.  If your high school junior or even sophomore is currently considering either taking a prep course or re-taking the exam several times, it’s worth evaluating what is often called the “opportunity cost.”  What else might your son or daughter be doing to prepare for college instead of studying for or taking standardized tests?  Seeking new experiences whether academic or extra-curricular might be a better option. 

--Take or re-take either the SAT or ACT, not both. Lily’s high school college counselor also advises students to take the SAT and ACT each once—I think a practice test in each would suffice—and see which format works better.  Some students perform significantly better in one format vs. the other.  Re-take the test in which you performed best. 

--Consider applying to test optional schools.  Last month a new report was issued supporting the view of several test optional colleges that standardized tests like the SAT and ACT are not an accurate predictor of student performance at all.  A student’s GPA is much better.  In 2008, a number of colleges and universities began eliminating the SAT and ACT from admissions requirements.  Schools like Wake-Forest have admitted much stronger students academically since that time.  It’s worth considering applying to at least some of these schools.  

I doubt standardized college admissions testing will ever be eliminated from college admissions. But we can at least begin to diminish their outsized influence on the whole evaluation process.