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Paying the bill

Choose the best colleges for you FIRST,
then work on the finances

Too often, parents have been known to say, “That school’s too expensive – there’s no way.” But until you apply and get accepted to a college, you really don't know what the out-of-pocket cost will be. It’s like the sticker price on a new car – very few people pay out-of-pocket the full sticker price. So the correct order is:

  1. Decide where you want to go to college.
  2. Fill out the applications and send them in.
  3. Then begin the work on figuring out the finances.

The real first step in the process began 16 years ago, when your parents began a college savings fund for you. Most people, though, cannot pay the full cost of college through savings. So to begin the strategy to cover costs, everyone starts by filling out the primary financial aid form: The Free Application for Federal Student Aid or FAFSA. The form and instructions are available online or in paper form in your high school’s guidance office or a college admissions office.

This form is filled out as soon as you can into the calendar year you will be starting college (if you’re going to college in September, 2015, submit the FAFSA form soon after January 1, 2015). Filling out the FAFSA is similar to filling out an income tax form – not fun to most people, but doable and necessary in order to maximize your financial aid opportunities. Your parents will need their tax information and your tax information from the year that just ended to be able to fill out the FAFSA form. The tax forms themselves do not have to be completed, though, before you send in the FAFSA.

After you’ve submitted the carefully completed FAFSA form, in one to four weeks the U.S. Department of Education will send you your Student Aid Report (SAR), which confirms the information you sent and tells you your Expected Family Contribution (EFC). You should have included the colleges you are applying to in the FAFSA information, so the EFC is part of the equation that the colleges’ financial aid officers will use to calculate how much federal student aid for which you qualify and what kind of financial aid “package” the college will offer. The colleges will send you an "award letter," stating what combination of scholarships, loans, work and family contributions are expected to meet the cost of that college.

Financial aid breaks down into three basic categories:

Move on to "5. Succeeding"