When planning for college, there are 20 areas that just about everybody should work on. In fact, most people will need to include all of these things in their college planning, and virtually everyone will do most of them.
They generally fall into four categories, which are College Finances, Choosing a School, Getting Accepted, and Your Family’s Plan.
So let’s get started with the first category and start reviewing the 20 key aspects of a good college plan.
1. Merit aid
Merit aid is provided based on your student’s academic, athletic, or other qualifications.
People think of merit aid as a high academic achiever who wins scholarships, and that’s true, but it can also be a student with musical talent, athletic skills, a particular racial or ethnic background, or even from a specific geography. There are many reasons why a college might pursue a particular student and provide merit aid.
It’s important to realize that, at some schools, the bar for merit aid is very high. At other schools, it’s lower.
For example, a student who might barely be accepted at a highly prestigious school might be accepted and receive mid-level scholarships at a less prestigious school, and the same student might be seen as a rock star at a third school and receive a full-ride scholarship.
So, the same student might be wait listed at a prestigious out-of-state private school, accepted at a local state school, and receive extensive merit aid from a local private college where she is head-and-shoulders above the typical applicant.
2. Need-Based Aid
Need-based aid is based on the income and assets of parents and the student. This aid is made available if you qualify and the school determines your income and assets may not cover all of the costs.
Most families don’t understand whether they qualify or not, so it’s important to run the numbers and understand how much aid you may qualify to receive.
Each school usually provides estimated costs of attendance and a financial aid calculator to help you estimate how much, if any, need-based aid you might receive. I also have an estimated family contribution (EFC) calculator on my website, and you can use this to get an accurate estimate of how much you might be expected to pay toward college costs.
3. Saving and Investing
Some families have been saving and investing since their children were small, while others haven’t started at all. Regardless of which category you’re in, now is the time to evaluate whether you should do more saving and investing, and how you would go about it.
To begin, ask yourself a number of key questions. Are you saving enough? Could you save more? Should you? How are you currently saving or investing money?
What can you afford to save or invest? What should you be doing to get to your goals? How are you investing? Are you investing in a college savings plan, a retirement-type plan, or more flexible general investments such as stocks, bonds, and mutual funds? Are these choices appropriate for what you’re trying to do? Will you have enough savings and investments to pay?
As you answer these questions and evaluate your needs, options, and choices, there are three key areas you should understand about saving and investing:
- Will your savings and investments impact need-based aid? If you have more savings and investments, you may not qualify for need-based aid or may receive less based on how much more you save and invest before your student applies to college.
- Will your saving and investing provide tax advantages? Certain savings or investments may provide tax advantages, which I discuss in the Tax Planning section below. It’s important to know how particular choices might help you save more toward college by reducing your tax liability.
- Are there rules or restrictions on your accounts?
There are investments specifically designed for college that may offer benefits such as state tax deductions or tax deferred growth. Often these benefits come with additional restrictions or penalties. For example, an account may be tax free if it’s used for college and taxes and penalties will be assessed if it’s not used for college.
So make sure you know whether any of your savings or investments involves restrictions and how they might impact your college planning and choices.
Is your family going to consider loans to help cover college costs? Some families don’t believe in loans, and they want to figure out how to make college happen without loans. Other families go deeply into loans and ultimately borrow extensively.
If you want to pursue loans, are you looking for loans to your student, or loans to mom and dad to cover your contribution? Who is going to repay the loans? How much are you willing to borrow?
You’ll need to ask and answer these questions so you know whether loans will be in the picture and how you might handle them.
5. Tax Planning
There are a lot of tax advantages surrounding college. Some of the key advantages are things like saving and investing properly, taking advantage of available tax breaks, deducting student loan interest and tuition payments, and making tax-free 529 investments to help pay for college.
Some states offer better tax benefits on their 529 plans than others, so you need to be aware of that as well.
Tax savings probably won’t pay for college, but if you can save an extra few thousand dollars per year by doing quality tax planning and get more money for college, most families would certainly want to do that. So it’s important to understand your tax planning options and their prospective benefits.
6. College Budget
A big factor in college planning is the cost. How much are you willing to spend on college? What can you afford now and in the future in terms of cash flow, savings, what’s earmarked for college, and maybe what isn’t earmarked for college but could be moved into the college bucket if it makes sense and you want to spend it.
Look at what you’re budgeting and determine if it’s a realistic amount of money compared to what colleges will actually cost. If it’s not, could you be saving more and could you afford more out-of-pocket costs during college?
Scholarships from colleges are another form of merit aid, but then there are outside scholarships. These are offered by third parties and organizations separate from the colleges.
Regardless of the source, scholarships can be anything from a big focus of your college planning to something you choose to ignore. However, many families don’t understand scholarships, so they miss the boat on them. By the time they figure them out, it’s too late to apply.
So it’s a good idea to make sure you understand scholarships, their potential benefits, whether your student will qualify, whether you’ll pursue them, and how much effort you’re willing to put into scholarships.
There is an application process with deadlines and submission requirements for many scholarships, particularly when they’re from outside a school, so pursuing them requires work. Your student will normally have to assume most of the responsibility.
When it comes to outside scholarships, there are three choices:
- You can pursue many of them
- You can choose a few that are a good fit and a really good choice
- You can choose to ignore scholarships altogether
For school scholarships, these will often be awarded based on merit and will be part of your student’s financial aid award. However, each school may offer additional scholarship opportunities that require separate applications to be submitted.
Choosing a School
8. Career Planning
A lot of kids are undecided about their career, while other students have a clear idea about going into a particular career or major.
If your student is undecided, that has a big impact on what college you might consider. You might need a school that offers a wide variety of choices to accommodate your student’s needs once a career or major is decided.
On the other hand, if your student is really focused on a particular career or major, that might determine the colleges you’ll consider because you’re looking only at schools that are strong in that area.
Students need to do their career planning in parallel with choosing a school. Sometimes career planning nails things down, but sometimes it’s undecided. There’s nothing fundamentally wrong with being undecided, but be aware that it alters the process of choosing a school.
9. College Research
To narrow down your choices and help your student select a school, college research is required. You need to learn more about the colleges that are a good fit for your student, what they offer, and what this means for your student and your family.
Research might include web searches, reading articles and discussions online, buying college guidebooks, taking virtual or in-person tours, and using all the available means to gather information and determine which schools are appropriate and preferable for your student.
If you can talk to current or former students of particular schools, this can be a way to validate what you learn. It helps you make sure you’re getting the real story from a student’s perspective and not just information from a third-party source that is gathering facts and data from afar.
10. College Visits
Coordinating campus visits is usually one of the first college planning steps that many families need to tackle, and, with those visits, they gather information to help them work on some of the other pieces of the plan and refine the plan.
This might include how the finances may work, what it’s going to take to get accepted, financial aid and scholarships, and other components that go into building a college plan.
As part of the college selection process, most families are going to visit somewhere between two and twenty schools. Sometimes the visit process is pretty simple because there are only a couple of local schools to visit, and you can do that in three or four days without a lot of planning.
But visit planning can get more complex if students are considering going around the country. These visits might require air travel, road trips, and family time off.
11. True College Costs
What people actually pay for college compared to the “sticker price” is drastically lower for some families. For others, it’s not so different. So you need to figure out what the likely price is going to be for your family.
This will vary first based on whether your student plans to attend a local state school, a high-end private school, a local private school, or an out-of-state public university.
Each of these schools may have a different price based on a number of factors, such as whether it’s in-state or out-of-state, and whether it offers merit aid or need-based aid (and you qualify). It may also depend on whether a school offers reciprocity, which means it offers in-state prices to students from neighboring states.
12. College Testing Plan
To help a student get accepted, you need to work on a college testing plan. This is another area that often comes up early in the planning process because tests usually take place during a student’s junior year in high school.
Understanding how important tests are for your student is critical. If you’re just going to the local state school, test scores may not make a lot of difference. A lot depends on the school, the average test scores of accepted students, and how important scores are in the admissions process.
At other times, a good test score could mean the difference between a $2,000 per year scholarship or getting $10,000 per year.
Testing can be a big deal, or it might be relatively simple. You need to figure that out, and that’s often something you can learn more about during campus visits.
A little later in the college planning process, you need to start working on applications and understand what it’s going to take to get accepted.
First, you need to determine if you’re qualified to be accepted. Do you have the right qualifications to meet the school’s requirements?
If you’re qualified, how do you demonstrate that? You will have to complete an application and probably an entrance essay, and you may need to document extracurricular activities and obtain letters of recommendations.
You’ll need to determine what is involved in applying to a particular school and estimate the odds of being accepted based on that application.
14. High School Academics
Hopefully, as part of the college planning process, a high school counselor is helping your student. This should include helping your student choose the right high school coursework to be eligible to be accepted at the colleges they’re interested in attending.
Examples include putting together a good college prep curriculum for their specific goals as well as taking the right amount of math or science and a foreign language.
Make sure your student is enrolled in the right classes and getting the proper instruction to prepare for college and be qualified to attend your student’s preferred schools.
15. Extracurricular Activities
In planning to be accepted at a college of your choice, you need to determine how important extracurricular activities are. Will your student’s extracurricular activities have any impact on the colleges you’re considering?
Some colleges weigh extracurriculars more heavily than others. So, if you want to attend one of those schools, you may need to build an extracurricular resume. In other cases, you may not need to worry much about it at all.
A lot depends on your path, your desired college, and how extracurricular activities fit into the picture for your particular student. Make sure you know how much they matter, whether your student is building the right resume to demonstrate them, and what you might need to do to differently.
Your Family’s Plan
16. Family Discussions
As part of your family’s overall college planning, it makes sense to have family meetings to discuss each area, what you’re going to do, and how you’re going to do it.
Sometimes it may just be the parents discussing things to determine what they feel is appropriate and get on the same page. Additional discussions might include the student as you start deciding what schools you might consider, where to visit, how to qualify for admission, and how to go about applying.
17. Parent vs. Student Responsibilities
To successfully execute a plan, you have to determine who is responsible for which part of the college planning process. Typically, the parents are responsible for the financial side of it, and the student is responsible for deciding on careers and majors, researching schools, test preparation, and filling out applications.
Parents and students might do some of these things together, whereas the roles might be different in others. It’s important to define responsibilities for your family, figure out what needs to be done, who’s going to do it, and when it’s going to happen.
18. Building a Team
To help you with developing and executing your plan, you’ll want to build a team. Typically this centers on the resources you have at hand, with at least one or both parents and your student at the core.
You might expand your team by adding key resources at your high schools, such as a guidance counselor or career counselor. You might also be interested in hiring outside help.
For example, you might have an existing financial planner, or you may look to hire a college financial planning specialist to help you with the financial side of college. You can also hire career and life coaches to help choose a career and major, and there are even college admissions specialists to help you build a list of schools that are a good fit and help with the application process and essays.
Test prep experts are another resource you can hire to help you with SAT or ACT preparation and provide one-on-one or online lessons and tutoring, group classes, and other assistance.
19. How You’ll Learn More
While I hope this article helps you, reading it on its own won’t make you a college planning expert. To really master college planning, you’ll need to learn more.
So determine a plan for how you’ll learn more and how you’ll walk through the planning process.
To learn more, you can read books and online articles, attend college events (such as college fairs at your high school), consult colleges themselves, or hire professional experts. You may want to do a combination of all of these.
It pays to think about and identify what you need to learn, the information you need to gather, how you’ll go about it, who’s going to make the effort, and when that will happen.
20. Executing Your Plan
Finally, we get to executing your plan. It doesn’t make sense to develop a plan without actually executing it.
So you need to learn about all of these things, develop your plan accordingly, and then execute it. This way, you’ll actually find a school that’s a good fit, determine how much it will cost, identify how much you need to save, how much aid you might receive, and get the full benefits of tax savings, having a team in place, and all the things a good college plan should include.
On my EFC page, you’ll also find an easy-to-use calculator to estimate your expected family contribution, along with more information, tips, and quick links to videos and resources to help with your college planning.Last Updated on January 10, 2017 at 7:15 am