Posted on November 26th, 2024

This Month's Highlights:

• The New & Improved FAFSA
• Colleges Are Worried
• Put This Information To Your Advantage
• Financial Aid Insider: Should I Apply When I'm Sure We Won't Get Anything?

Here are some fun facts about November:

• Name: November comes from the Latin word novem, which means "nine".
• Birthstones: November has two birthstones: topaz and citrine. Topaz is the traditional birthstone and is usually yellow or amber in color. The ancient Greeks believed topaz could make the wearer invisible.
• Birth flower: The birth flower for November is the chrysanthemum. Chrysanthemums symbolize beauty and joy, and have different meanings in different cultures.
• Zodiac signs: November babies are either Scorpios or Sagittariuses.
• Holidays: November 1st is All Saints' Day. Other holidays celebrated in November include World's Diabetes Day and Veterans Day.
• Historical events: The first Boston Female Medical School opened on November 1, 1848. British archaeologist Howard Carter discovered King Tut's tomb in Luxor, Egypt on November 4, 1922.
• Famous people: Leonardo DiCaprio, Scarlett Johansson, and Mark Twain were all born in November.

The New and Improved FAFSA

Last week I was on a call with the Department of Education. It was all about the FAFSA and what we can expect. There have been several beta tests and the results have been encouraging. They are going to let students file the FAFSA beginning Friday, November 22nd. The official open is still December 1st.

One thing that really surprised me was that they hope not everyone starts filing on the first day. They are quietly freaking out because they have no idea what will happen. Frankly, given the issues that still aren't fixed I can't say I blame them. They know they can't dissuade anyone from filing right away. Students and their parents are at a fever pitch waiting to file out of fear they will lose out on free money.

The best advice I can give is to make sure your student creates a Federal Student Aid ID and also at least one parent gets one, too. AND, give it a couple of weeks before filing your FAFSA. Second week of December is early enough.

Colleges Are Worried

The fallout of the "Better" FAFSA saw total college enrollments drop by 5%! Now it's anyone's guess as to what will happen this year. One thing looks certain and that's between years 2025 and 2029, the number of college-bound students will decline by over 400,000 fewer students in a span of four years, an average loss of 100,000 students per year. Colleges concerned about declining enrollment are adapting and responding in creative ways. They're sharpening up their identities, adding more online programs, offering students more fun activities, and making a special effort to reach out to under-served groups.

As a result of this decline the closing or merging of colleges will continue. I fear that many of the smaller regional private colleges and even many public universities will continue to eliminate majors and sports.

College presidents are under attack for their policies and actions taken and continue to be taken during the campus protests over the Israel–Hamas war. Not only do they have to deal with very difficult student issues, their main job of raising money is impeded.

Regardless of White House policies, it's essential to keep higher education affordability at the forefront. The College Cost Transparency Initiative plays a vital role in ensuring that, despite ongoing uncertainty around federal aid, students and families have the clear information they need to make informed decisions about college costs, enrollment, and borrowing.

With the courts challenging just about every aspect of student and parent loan repayment programs, and the new President's plan to eliminate the Department of Education, it's difficult for professionals like myself to advise clients on ideal borrowing strategies.

Put This Information To Your Advantage

On balance, because most colleges are not 'elite' or in the Ivy League, the vast majority of private schools offer merit scholarships and grants (tuition discounts). The question is how much wiggle room is there in your student's package?

Given the record gains in the stock markets, college endowments should be quite healthy. Of course, the "at-risk" of closing or merging would probably use their gains to keep up appearances. It's quite expensive to maintain a college no matter the size.

For those colleges that are still healthy and seeing increases in admission applications it may be that financial award packages may not be as lucrative as before. With more students vying for slots at the brand name colleges, the chances of being admitted go down.

What may also happen is that colleges could become pickier about the kinds of students they admit. The students who have a greater financial need vs the more well-heeled ones could be overlooked. Colleges, after all, are a business. Despite the recent plight of college presidents, when they aren't under attack, they, just like members of Congress, spend most of their time raising money.

Colleges want certainty. They are a business, and they have to meet their projections, and fill as many seats as possible. Selling too few seats means shutting down programs and firing teachers and professors. It also means cutting majors from the curriculum. Even their credit ratings go down.

None of which makes for a great college experience for the students they desperately need to attend. Now, there is no certainty - which means parents are in the unique position to level the playing field. At colleges that aren't elite nor at the bottom of the barrel, parents have the upper hand, and these colleges are willing to negotiate more than ever.

There are colleges reducing their tuition. Last year, Colby-Sawyer College, a private college in New Hampshire cut its tuition from $46,364 to $17,500, a drop of more than 60%.

Keep in mind that most students don't pay college sticker prices, as institutions discount depending on their own financial needs, a family's ability to pay and what admissions offices perceive as a student's academic merit.

In a recent study of more than 350 private, nonprofit colleges by the National Association of College and University Business Officers, first-time undergraduates received an average discount of nearly 55% off the advertised price. Though tuition has risen more than 9% in the past decade, net tuition after discounting has remained relatively flat.

The most competitive colleges may freeze their tuition, but most aren't going to lower their prices. They believe that parents will think a lower price somehow "cheapens" the product. A lower price? These colleges are already over $90,000 per year!!!

Each month, we provide you with tips on your best ways to pay for college regardless of your financial situation.

Should I Apply When I'm Sure We Won't Get Anything?

Yes! Many extremely financially comfortable families mistakenly assume that they do not qualify for aid and miss out on financial aid opportunities offered by the U.S. Department of Education, their state, and colleges. The FAFSA is a free application that will facilitate your qualification for as much aid as possible while you explore different financial aid offers. Contrary to popular belief, there is no such thing as a FAFSA income "cut-off".

There are half a dozen reasons why affluent families should file the aid forms. If you've been following me for a while you already know what they are. But most important is that colleges want good paying customers whose students will become donors after graduation. That's worth giving up some money now for a perennial payoff down the road.

The colleges must think you're pretty dumb because so many parents pay whatever the college tells them to. My advice is to find the colleges most likely to give your student big tuition discounts and negotiate with them for even more. Don't prove the colleges right. Be a knowledgeable consumer of higher education. They need you more than you need them. File the forms and see how it all plays out. You could save quite a bit more than the usual tuition discount.

In the financial aid system, there are more trapdoors and landmines than ever before. Do everything you can to avoid mistakes. It's never too late to prepare for the financial aid process.

If you aren't a client already, feel free to reach out and schedule a meeting with me and discover if there is a match between what we do and what it is that you want. We may be able to reduce your college costs.

'Till next time, save room for your favorite Thanksgiving dessert!

Bob Chitrathorn