This is the time of year when many families are faced with tough decisions about sending one of their children to college. They have gone through all the difficult work of applying to colleges, filing the FAFSA, and searching for scholarships. It felt like they were close to reaching their goal until the financial aid award letters started arriving, and it suddenly became apparent that financial aid wasn’t going to be enough to cover all of their college costs.
In some cases, it is possible to talk to the financial aid office and discuss the situation, but in most cases the award that is received is their best offer. Now what? In those instances, the families will have to make some tough choices:
• We may not be able to afford a particular school: This could be a crushing blow to some families and any students who might have set their hearts on a particular college institution. Sometimes reality can be a bitter teacher. These families have to choose whether they want to put themselves deeply into debt and risk their financial future to pay these costs, or whether they should start looking at more affordable alternatives.
• We may all have to work harder: Sometimes the difference between the college costs and the available financial aid is a reasonable amount. The family may decide as a unit that they can all work harder to make up the difference. The student may be able to find a part-time job while attending classes. Creative students might be able to sell some of their work online. Parents might decide to forego a vacation or a home remodel in order to direct more money towards tuition. If everyone works together, it might be possible to stretch the budget enough to cover all of the costs.
• We might have to borrow more than we thought: The financial aid package might include federal student loans and PLUS loans, and there could still be a gap amount. That is when you have to consider the pros and cons of private student loans. Be sure to compare private lenders, and be very aware of the total amount you are borrowing. Estimate the financial situation for the family and the student four years down the road and determine whether you will realistically be able to make the monthly payments for the amount that has been borrowed.
• We might have to cut back on expectations: Perhaps the student wanted to live on campus, and might have to commute for a few years. Or it might be necessary to start at a local community college, or take some summer classes close to home, in order to transfer and graduate from the desired college.
These are not pleasant choices, but it is best to sit down as a family and discuss the alternatives. Everyone should have a say in how the family can collectively solve the problem, and still get the student a good college education.