By Dr. Pamela Ellis, MBA, PhD of Compass College Advisory and member of NAWBO Columbus
As a self-employed parent, paying for our teen’s college education can seem overwhelming. Our income might fluctuate, and without the traditional benefits of steady paychecks or employer-sponsored savings plans, the road to financing higher education can appear daunting.
As a mom-preneur of three who runs a college admissions firm, I thought the process would have been easier, but I also felt the enormous stress of paying for college. It’s great to now be on the other side of sending all three to their top choice colleges.
With the right strategy, you too can successfully navigate the college funding landscape and ensure that your teen has the opportunity to pursue their college dreams.
Getting Past the Sticker Price Myth
One of the most important concepts to grasp early in the college search process is not to let the sticker price scare you. Many parents fall into the trap of focusing on the advertised cost of attendance, which can easily exceed $70,000 per year at some private institutions. However, this sticker price is often far from what families actually pay, thanks to financial aid, scholarships and grants.
Understanding College Funding Options
When exploring how to finance your teen’s education, it’s crucial to understand the various types of financial aid available:
- Grants and Scholarships: These are funds that do not need to be repaid and are often awarded based on need, merit or a combination of both. Scholarships are frequently merit-based, while grants are typically need-based.
- Work-Study Programs: These allow students to work part-time during their studies, often in positions related to their field of study, to help cover educational expenses.
- Loans: While less desirable, loans can be a necessary part of the equation. However, it’s important to be cautious, especially with Parent PLUS loans, which can become a significant financial burden. We strongly advise against these loans unless absolutely necessary.
Accessing Federal, State and Institutional Aid
The money for college comes from several sources, including the federal government, state programs and the colleges themselves:
- Federal Aid: This includes grants, scholarships, work-study and loans. For lower-income families, federal aid can cover a significant portion of college expenses.
- State Aid: States also offer grants and scholarships only.
- Institutional Aid: Colleges often have their own scholarships and grants. Many institutions, regardless of income, offer merit-based aid, and sometimes this aid is tied to the college’s specific priorities, such as gender balance or program-specific needs.
Completing the Necessary Forms
To access most forms of financial aid, parents must complete the Free Application for Federal Student Aid (FAFSA). Despite common misconceptions, we recommend that all families, regardless of income, fill out the FAFSA. Even families with higher incomes can benefit, as some colleges use FAFSA information to award scholarships or cover additional costs, such as books.
In addition to the FAFSA, some private colleges require the CSS Profile. While this form comes with a fee, it opens the door to additional institutional funds that aren’t capped like federal aid. As a self-employed parent, understanding how your business income is assessed in these calculations is crucial.
Choosing Early Decision and Its Financial Implications
When your teen is a senior, it can be very enticing to submit applications as early as possible. That’s a great idea when your teen is applying to an Early Action deadline. However, applying early decision (ED) is a strategic choice that can affect financial planning. Families who apply ED are often committing to paying the full price. When your teen applies to the ED deadline and is admitted, they must attend that college regardless of financial aid.
Conclusion
Paying for college as a self-employed parent requires strategic planning, understanding the financial aid landscape and making informed decisions. By staying informed and proactive, you can ensure that your teen’s college education is both attainable and affordable.
About the Author…
Pamela Ellis, MBA, PhD, The Education Doctor®, partners with busy moms to help their teens find the perfect college fit without the stress of overpaying. With over two decades of experience and visits to 500+ colleges worldwide, she provides insider knowledge and proven strategies that ensure your child’s success from high school to college and beyond. Dr. Pamela is passionate about empowering families to make informed decisions that set their teens up for success. Contact Compass College Advisory today to make your teen’s college dreams a reality while securing your financial peace of mind. Dr. Pamela is a member of NAWBO Columbus and Secretary of the NAWBO Columbus Board of Directors.