Choose a plan that offers flexible mutual fund investment options that will enable you to broadly diversify across asset classes, regions, and sectors. For plan comparisons visit
Determine Financial Aid
Parents must get savvy about the financial aid process, says Kalman A. Chany, author of Paying for College Without Going Broke (Princeton Review; $20). Financial aid officers come up with offers composed of a mixture of grants, loans, and work-study programs to help families make up the difference. It’s important that parents and students actively seek assistance from a college or university’s financial aid department to get assistance with their financing options.
To qualify for financial aid, families must fill out the Free Application for Federal Student Aid, or FAFSA. A formula is applied that looks at the income and assets of the parents and the student to determine the Expected Family Contribution (see “How to Negotiate a Better Financial Aid Package,” September 2011).
Since October 29, 2011, nearly every college and university is required by law to have a net price calculator posted online that gives an estimate of how much a student would have to pay after financial aid is awarded. This calculator uses academic, family, and financial information to estimate the grants, scholarships, and other financial aid that is likely to be available. Your “net price” is the difference between that amount and the current year’s cost of attendance at that school. There are some flaws, however, says Kantrowitz. Some calculators collect less information and provide a less accurate financial aid estimate than others. For that reason, it’s hard to compare college costs between two schools strictly using the calculators, but “they will tell you whether the colleges are inside or outside the ballpark of affordability,” he says.
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