“My child will get some type of merit scholarship.”
Spoiler: According to a survey by the Wall Street Journal, 92 percent of financial aid counselors say parents overestimate the availability of scholarship money. The average is about $15K per year.
“My child will borrow the amount needed through low interest government loans.”
Spoiler: The federal government actually caps the amount undergraduates can borrow over four years to $27,000. The current interest rate for an unsubsidized Direct Loan is expected to be 2.75% + loan fee of about 1.06%. A college student should not borrow more than their anticipated first year salary.
“Financial aid is only loan money.”
Spoiler: Between 60 to 70 percent of all financial aid packages may be free money in scholarships that doe not have to be repaid.
“We will get no financial aid.”
Spoiler: About 35 percent of parents incorrectly assume they will not get financial aid; 70% of those parents assumed incorrectly. Don’t rule out before you do your research.
“With two children in college, we will have to pay twice the amount.”
Spoiler: The federal Financial Aid formula calculates the expected family