What to do if you have not saved up for college

by Grace

Middle- and upper-income families who have not saved for college, and who cannot pay tuition from current income, will likely be taking out loans to finance their children’s higher education.

You are probably not going to get rewarded for having saved nothing. Everyone seems to know a family in their area with a big house, fancy passport stamps and no savings with a child who nevertheless got an amazing financial aid package from a top school. Don’t believe the stories. The details of financial aid are so complex that many families don’t understand their own packages, or the rumormongers transmit the details incorrectly. Income tends to matter in financial aid more than assets and savings, especially at public universities.

Grants typically pay only a relatively small part of the costs, except for the most selective colleges where money flows freely for everyone but the rich.

THE COLLEGES Most families with no savings will be hoping that at least some colleges they apply to will offer large grants and ask them to borrow less money than others. But popular, highly ranked schools tend to have a lot of applicants. Even if you do get in, many of them may not offer outsize rewards or be flexible if you appeal for more money once you get in. Apply and cross your fingers, but don’t count on generosity here unless the school is particularly well endowed.

Here’s a way to start.

THE DATA For families with little or nothing saved, the process has to begin with a crash course in how colleges make decisions about financial aid. First, you’ll want to use the calculator on the College Board’s website that estimates your expected family contribution, the number that the federal government will use in figuring out how much federal aid you are eligible for once you fill out the Fafsa (Free Application for Federal Student Aid) form later in a child’s senior year in high school. Colleges will also use this number, with additional tweaks in some cases, as a baseline for what you can pay each year, though it’s no guarantee that they’ll make up the difference with grants or work-study jobs and not a link to a bunch of loan applications.

There’s more information at the link below for families who face college without savings.  And check out this additional advice for parents of high schoolers facing the high cost of college.


Ron Liebera, “College Financial Aid Guide for Families Who Have Saved Nothing”, New York Times, Oct. 17, 2014.hing.html?_r=0

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