September 2021
The Path to Affording Higher Education
 
College affordability is a hot topic in today’s world. The good news is that several things can be done to make higher education more affordable for our students. Below are five steps families can take to ensure their students have affordable options available.
1. Start Saving Now

Saving is a critical step in making higher education affordable. Most families, including our most financially needy, find there is a remaining balance even after financial aid. Middle and upper-income families are often shocked to see that their Expected Family Contribution (EFC), is higher than they anticipated. The good news is that saving, especially when started early, can make a big difference and provide families with more options. Savings have no impact on financial aid eligibility for many Maine families, and very little impact even for higher-earning families. Learn more about one option, the NextGen 529™ program, with matching grants available to Maine residents. Though starting to save early is ideal, it’s never too late to start!
2. Get Financially Fit

Ideally, families should start preparing to pay for college when their student starts high school by paying down debt, reducing existing expenses where possible, and resisting the urge to take on new expenses. Taking these steps will help “free up” money in the family budget and make tuition payment plans an option. These plans allow payments to be spread over a semester or academic year, and unlike loans, don’t charge interest. Paying for college is a piecemeal approach, and having more “pieces” available, including financial aid, savings, tuition payment plans, merit aid, student summer earnings, and scholarships, will make the process more manageable and reduce the need to borrow.
3. Have the Conversation

It's a challenging conversation to have, but an early discussion to clarify expectations around who is paying for college and how much the family can afford will make school selection easier. For example, what if there is a balance remaining after financial aid? How much is each party able to contribute? How does everyone feel about borrowing? How much borrowing is comfortable and who is going to borrow? Check out important conversation starters on the back of our Path to Affording Higher Education PDF. Having these conversations before senior year will help get everyone on the same page before financial aid offers arrive and the final school selection decisions need to be made. Let me know if there is a better way of wording or sharing this info.
4.  Build a List of Affordable Schools

Many factors determine which schools might be a good fit. But too often, affordability isn’t considered until late in the process. Researching affordability earlier can result in a better list of viable options. One key is to focus on net price, not sticker price. Net price is the cost for one year after grants and scholarships, which don’t have to be repaid, but can vary dramatically by school. A Net Price Calculator (NPC) can be found on each school’s website and gives students an estimate of what that school will cost them. The results are only estimates but can help students identify schools that appear to be a good financial fit. Students should also make sure their list includes a financial “safety school” that is affordable even if the financial aid offer isn’t great.
5. Compare Financial Aid Offers and Consider the Return on Investment

Each financial aid offer may look different, and to make an informed decision, families should do an “apples to apples” comparison of aid, net cost, and remaining balance. FAME’s Comparing Cost and Financial Aid Offers worksheet can help determine and compare the cost across schools. If borrowing is needed, it is important to understand the return on investment. Before committing to a school and borrowing any loans, use FAME’s Student Loan/Salary Calculator. This tool can help students connect the dots between the amount they’re borrowing and their ability to repay after graduation.
 
Deciding which school to attend can be stressful and there are many factors to take into consideration. It’s helpful to keep in mind that typically there are multiple academic and training pathways that allow students to achieve their goals. The plan for life after high school is like the first draft of a paper – it is meant to be revised, edited, and occasionally rewritten. The key is to have a variety of good options available and to make as informed a decision as possible.
 
For more information on The Path to Affording Higher Education, click here.
For more information check out the recording of our recent webinar:
For additional helpful information and resources, find  previous tips (formerly know as 5 on the 5th) on our website.
 
FAME's College Access and Financial Education Team:
 
Mila TappanCollege Access and Outreach Manager
Jessica WhittierCollege Access Counselor 
Nikki VachonCollege Access Counselor
Maria MacDougalCollege Access Counselor
Floreka MalualCollege Planning Advisor
Mary DyerFinancial Education Officer
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