If it Wasn't Already Hard Enough...
Before we delve into today’s post, just a heads up that I won’t be posting next Monday as I’ll be out of the office.
On to this week’s post…
We’re getting deeper into tax season and that’s stressful for just about everybody. Yet another, perhaps larger stressor for some families right now is that we’re also entering college acceptance season. Some high school seniors have already received acceptance letters but most traditionally learn their fate from about mid-March to mid-April. Also traditionally students and their families are expected to choose a school by May 1st. It’s an exciting time that’s been upended this year by our government that, ironically, was only trying to help.
I’m sure Congress passed the FAFSA Simplification Act a few years ago with all the best intentions. The Department of Education was directed to make the Free Application for Federal Student Aid process faster and friendlier, and aid eligibility calculations would be overhauled. This would help more students go to college without as much debt, and so forth. But as was perhaps inevitable, the new website and application process went through delays caused by development oversights and technical glitches. These issues have been referred to in the press as a “smorgasbord of errors” and, my personal favorite, as a “nexus of chaos”. The bottom line is that families began the process later than normal and, due to further delays, relevant financial information will be late going to schools by at least a month.
This creates the unfortunate and anticlimactic scenario where students open their acceptance letters to find little meaningful information about what attending Brand X University will cost them. Yes, there’s probably information in the envelope or email about the sticker price of the institution but nothing about specific aid awards. Net price calculators on school websites and elsewhere offer a school’s typical total cost of attendance, but those can be inaccurate. This can be due to old data, such as for the 2021-22 academic year in one case or, in another case, the “old algorithm” according to a school’s admissions rep. So the student is overjoyed at being accepted to their out-of-state dream school while their parents are left with the conundrum, “How can we afford this if we don’t know what it will cost”?
We’re dealing with these same issues in my household with our son. We completed the FAFSA process early and he’s been accepted to multiple schools, which is great, but now we’re playing the waiting game with everyone else. Maybe the “reach” school would be affordable if we knew how much aid was available, if any. Or maybe the hypothetically “cheaper” state school is a better and more affordable option anyway. It’s an odd thing to consider these weighty financial commitments with such limited information.
Parents and students are scrambling but so are schools. Ordinarily kids have until May 1st to decide but some schools like the UC and CSU system in California have bumped this back to May 15th. Other schools extended to June or later, while others haven’t but offer flexibility if the student asks for it. And some schools are using alternate means to send out aid estimates, so it’s all over the place. Either way I think it's best to call the school and ask instead of waiting.
Unfortunately this FAFSA delay is compressing a set of difficult decisions into a very short timeframe. Along these lines and while we wait, here’s a fascinating update on college planning from JPMorgan. This is a slide presentation with all sorts of details pertaining to why college matters (it still does, I think – I know that’s up for debate these days…), cost, aid, the new Student Aid Index that replaces the old Expected Family Contribution and saving/investing for college.
Beyond that, I wish you and your family luck if you’re going through this process with your student. It’s a huge decision that’s very stressful for everyone involved, and not just financially!
Here’s the link to the slides…
Have questions? Ask us. We can help.
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