Four questions about paying for college to discuss with your student

father and son discussing college costs

Not sure where to focus when talking about education costs? Use this as your college checklist of to-dos and to-knows.

Is college in your student’s future? Great! Have you talked about how to pay for it? No? It’s an important discussion and one worth having with your student well in advance of dorm check-in day.

Focus on the basic things your student needs to know and to do to secure financial aid for their first college semester and beyond. Here’s a checklist of questions you may ask to help get them and your whole family started in the right direction.

1. Have you completed the FAFSA?

The most important item on a college checklist should be to fill out the FAFSA (Free Application for Federal Student Loan). Why is the FAFSA so important? In order to be eligible for all federal student loans (like grants and loans), your student needs to have filled out a FAFSA. Most schools require you to have completed a FAFSA before they make an aid offer from their sources, such as merit scholarships, school grants, waivers that give out-of-state students in-state rates, and more. Plus, more students than ever are eligible for Federal Pell Grants — so more families may be able to find financial aid that they don’t need to pay back.

Start this process early — applications open October 1 — so you have plenty of time to gather all of the documents you need to fill out the form. Keep in mind that while the newest FAFSA deadline for submission each year is June 30, most schools have deadlines for financial aid much earlier than that date. And there is only so much financial aid available in any given year federally and at each school. Apply early!

Remember, too, that filling out the FAFSA is an annual process. Your student will complete it every year they’re in school.

2. Have you received your Student Aid Report?

If your student answered “No” to question 1, their answer to this question is also going to be “No.” The Student Aid Report (SAR) is the government’s reply to your annual FAFSA application. This document gives you all the basic information about your student’s federal financial aid eligibility for the upcoming school year. You can choose to receive it digitally or by old-fashioned snail mail.

Parents should especially pay attention to the Expected Family Contribution (EFC) area of the SAR. Before you panic, your EFC is not the amount of money you will have to pay for your student to go to college. Instead, this is the dollar amount that a college or university will focus on helping the family cover in its need-based scholarships and aid. You’ll want to make sure that your son or daughter cross-references the information to make sure it’s correct and complete.

3. Are you applying for scholarships?

Before and after the FAFSA application process, your student may bring in more money for college costs through merit- and need-based scholarships. Students can search their top schools for relevant scholarships and also check the extensive database of scholarship programs at TFS Scholarships. Again, they should start the application process sooner rather than later as deadlines can come as early as junior year of high school.

Help your student by working together to create a list of scholarship deadlines to keep you both up to date and on track.

4. Do you understand what a promissory note is?

If your student is going to take out a loan of any kind to cover college costs, you should explain to them how promissory notes work. This is the one document you should be sure they completely understand before signing on the dotted line of any loan. Promissory notes are a “promise to pay,” like a handshake but more formal and legally binding. This is a legal document that outlines all the details of their student loan.

By signing a promissory note, your student is making a legal promise to pay back their debt — with interest. If they break that promise, they could face consequences ranging from damage of their credit rating to penalty fees above and beyond their loan interest and principal amounts. Be sure they pay attention to the details as this document also outlines how much they’ll owe and what their interest rate is. They should be asking questions like if they’ll have a six-month grace period or if their loan will cover more than just tuition and books, like housing and transportation as well. It’s important for your student to understand that just because you qualify for or are offered a loan doesn’t mean you are required to accept it. You can borrow a lower amount and cover costs through other means like part-time work, commuting to school from home, or even choose to enroll at a school that costs less. 

Make sure you’re staying involved in the process whether that’s guiding your student through their money questions or simply being a shoulder to lean on for emotional support.

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