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Too Rich for Financial Aid, Too Broke to Pay For College

It's a question I hear all the time. Do we make too much money for need-based financial aid? Unfortunately for families where I've lived recently - the North Shore of Chicago and Southern California, the answer is often yes. Income is THE single most important variable in the financial aid equation. The numbers may vary slightly based on how many children you have in college and your tax situation, but on average, if you make more than $150,000, you are unlikely to be eligible for need-based financial aid.

That's the bad news.

The good news is that there are strategies you can use to help with the second half of the equation - the part where you have to PAY for college. This is helpful, because most families that I know, that make that kind of income, do not have extra cash sitting around to write a $25,000-$50,000 check for tuition and room and board each year. 

I wrote my previous blog post about the biggest mistake families make - failing to plan how they are going to pay. Obviously, planning is important. Hiring someone to help you plan financially is a great investment to make in your financial future. But who else can actually help you in ways that will cut the cost of college?

Professionals I partner with to help families cut the cost of college generally fall into two categories: Independent Education Consultants (or IECs), and Test Prep Experts. These can be the same person, but may not be. 

IECs can specialize in areas like essay writing, the application process, and building a great list of colleges. Some also offer packages where they combine all of these services. The good ones have previous experience in high-school or college counseling or admissions roles. They are members of organizations like IECA, NACAC, or HECA

For Test Prep, I'm sure everyone has heard of the big players like Kaplan and Sylvan. There are also free test prep resources available in Khan Academy. Everyone learns differently and has different budgets, and those two options are certainly a fit for some. The other option is personal test prep assistance. These professionals can help determine which test will allow your child to receive their strongest score, and focus on methodologies and knowledge specific to their needs. 

So what does this have to do with cutting the cost of college? In future posts, I'm going to invite guests like these to tell you in their own words what they do and how they help. But here's the answer - picking the "right" school (one that will be a good social, academic, and financial fit), and increasing your test scores are two of the most impactful actions you can take to lower the cost of college.

Why is that? The right school wants your child to attend and is WAY more likely to offer "merit" aid or tuition discounts - even if they don't have perfect academic credentials. Getting even 1 point higher on a standardized test can get you $24,000 over four years in merit scholarship money (example). 

Just because you aren't eligible for need-based aid, all is not lost. Higher test scores and picking the right school can help you cut the cost of college and pay for it without going broke or jeopardizing your financial future. Reach out if you need help!