Posts Tagged ‘PJ Horan’

Even Warren Buffett should file the FAFSA

Tuesday, March 13th, 2018

“I don’t want any financial aid”…said no one ever.

Well that is the path you’ll go down if you don’t file the Free Application for Federal Student Aid, commonly known as FAFSA. It is estimated that $2.3 billion in federal aid was left on the table in 2017 by students who did not file. Many parents think they make too much money to get any aid and choose not to file the FAFSA. Actually, anyone making $250,000 or less can qualify for aid, and that’s 95% of Americans. I’m not suggesting that a household making $150,000 a year is going to get their tuition fully funded, but they will be offered a Federal Direct Loan. You probably remember these as the Stafford loan, and that the interest rates are much lower than private student loans. On some of these loans, the interest doesn’t start until after you graduate. Saving money on high interest loans is like a mini scholarship in and of itself.

It is a good idea to file even if you aren’t going to take any loans. Many schools will look at a student’s FAFSA before awarding any aid including merit aid. Some admissions departments are even more likely to accept a student who has completed the FAFSA because it shows the student is more likely to attend college. Financial aid officers may be more likely to award a school-specific scholarship to a student who is just outside the need-based financial aid formula, but still could use some assistance with tuition. Some states even award aid that is not based on need at all, but will not award the aid without a FAFSA on file.

Things Change

It’s a good idea to file the FAFSA even if you end up not qualifying for aid, because a year may come where circumstances find you in a different financial position.  Some common reasons a FAFSA award can change are:

  • Parental Separation
  • Parental Death
  • Sibling Attendance
  • Loss of Job
  • Selling of an asset like a business or property

These changes could have big effects on your need for aid, but if you don’t have a previous FAFSA on file, these circumstances may be hard to prove.

Bottom Line: There is no downside to filing the FAFSA!

Authored by PJ Horan

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What if you could name your own price for college?

Friday, March 9th, 2018

Have you seen the Progressive Insurance commercial with the “Name Your Price” tool? If you haven’t, the premise is that Flo (the spokeswoman) gives the price scanning gun to the customer to let them name their price for insurance. In actuality, when a customer approaches Progressive about getting Insurance coverage, they get to pick and choose certain features of their policy until the price is where they want it. What if I told you that you can use the “Name Your Price” tool when you are shopping for college? Okay, not exactly, but the price that any college or university advertises is very rarely the price that you will pay. Don’t let sticker shock deter you from researching a college.











In 2016, the average discount rate for an incoming Freshman was 48.6%! That is like a Black Friday sale! So why do the schools advertise such high costs if they aren’t going to collect it? Because some families still have to pay full price (but I’m writing this to make sure you are NOT one of those families). At first glance, private college A might have double the sticker price of state university B, but things aren’t always what they seem. Many private schools have large endowments and lots of money to give, while most state schools are funded entirely by their state government. Some state schools do have large endowments, but they have a lot more students to financially support, almost 3-1 on average. A big state school may not be able to meet as much of your need as a small private college. Another thing to remember is that there are two types of aid: gift aid and self-help. Gift aid is just that, a gift. It is in the form of a grant or a scholarship and you don’t pay it back. Self-help is student loans and work study programs. Self help will factor in to your “net price” because technically you’re still paying.











So what can you do to figure out how much a school will cost your family?

  • Start by figuring out your E.F.C. That’s your Expected Family Contribution. There are tons of calculators out there like this one.
  • Once you know your EFC, head over to and start your research. You can determine what a school charges, how much need they meet, what % of each type of aid it is (and almost any other financial data you’d like to collect).

Just remember that picking the right school should always be the first goal. A student at the right school is more likely to graduate in 4 years with a degree which will save a lot more money than gift aid or self-help! 

Authored by PJ Horan

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