A quick review of financial aid stats
for our state universities** indicates
that approximately 60 to 65 percent of
the need gap between that EFC and
the "retail" cost of college is met by
financial aid. So state college is even
less affordable. Private schools, while
generally meeting a higher percentage
of need, are starting from retail prices
that often exceed $60,000 per year.
Your Clients Need Your Advice ...
Before you recommend anything, you
must have an estimate of what the
family's EFC will be. The chart on page
10 estimates EFC under a variety of
circumstances. If the number for your
client is lower than the retail cost of the
college(s) that they are interested in,
that student is likely a need-based aid
The problem is that you need to make
your clients aware of that early. Be-
cause of recent timing changes re-
quested by the Department of Educa-
tion, if a child is going to start college
in the fall of 2018, it's the 2016 tax re-
turn income that will impact that EFC.
So What's the Plan?
If the student is looking like a need-
based aid candidate, paying attention
to both income and asset levels for
parents and (especially) the child is im-
portant. Lots of income and assets in
the student's name (think UTMA and
UGMA accounts) will work to their det-
riment. Part-time earnings are OK, as
long as they don't exceed the standard
deduction ($6,300 for 2015).
Make sure your clients understand that
Uncle Sam may be able to help them,
at least in a small way.
· Review your database of your
clients. Look for the ones who
have children who are 13, 14, or
15; you have their dates of birth.
· Make lots of copies of the chart
in this article (or email me at
I will send you a digital copy).
· After tax season, invite each
client in for coffee and circle
the EFC number on this chart
that most closely matches his or
her situation with a red pen.
Ask what the plan is to come
up with at least that number ...
for four years ... for each of
· Have a box of tissues handy.