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It's FAFSA Season In America!

It's FAFSA Season In America!

October 13, 2020

It’s FAFSA Season in America!


The leaves are turning.  The nights are getting a bit nippy.  It’s time to put away the shorts and bathing suits and get out the sweaters and jackets.  Football season is going strong and it’s time to fill out the FAFSA!  What?? 

FAFSA is the Free Application for Federal Student Aid.  The Free Application for Federal Student Aid (FAFSA) is used by the federal government to determine a family's eligibility for grants, work-study, and loans to pay for college.  The FAFSA form allows you to be considered for federal financial aid.  It is also used by colleges and universities to award their own scholarships, grants and loans.  Basically, it is the starting point to help figure out how much you are going to have to pay for a particular college.

How Much Does It Cost to Go to College?


Over the past several decades, inflation has generally been quite low.  On the other hand, the cost of a college education has been increasing dramatically.  The website,, says on average, tuition tends to increase at 8% per year.  Using the rule of 72, this means the cost of college doubles every 9 years! 

I remember standing in line to pay my final semester of tuition at the University of New Mexico in 1986.  The price was $450.00.  I told my friend, Monty Pope, dude, we’re getting out of this place just in time.  It’s getting expensive.  Today the tuition for a New Mexico resident at U.N.M. costs $7,875 per year.  The cost for an out of state student is $23,292.  When I put those numbers into my handy, dandy, HP 12C calculator, that works out to 6.58%.  A little less than the 8% rate, but close enough for rock & roll!

When I was a senior in high school, I got accepted to the University of Notre Dame.  Luckily for my family, I was offered a Presidential Scholarship to attend U.N.M. and the rest is history.  I just looked up the tuition for this year at the University of Notre Dame and it is $55,553.  In 2000, the same school’s tuition was, $22,187 per year.  That works out to a 4.69% increase over the past 20 years. 

These are just the retail prices.  When you look at various websites, you will see the retail price and then you will see the cost for the average student.  All of this gets confusing for students and especially, parents.  In addition to this, there are approximately 5,300 colleges and universities in the United States.

For a lot of my clients, saving and paying for their children’s education and planning their own retirement are their biggest priorities.  When we put the retail cost of a college education into our planning software, the numbers can prove daunting.  In order to pay for the full cost of an in state, public university, parents need to save anywhere from $500.00 - $700.00 per month for 18 years.   For a private school, if we were to use today’s rate of $55,000 in tuition and another $15,000 in room and board, we’re talking about needing over $168,000 per year for 4 years, 18 years into the future.  That means saving approximately $1700.00 per month from the time the child is born.  And that’s only one kid!  Ouch!!

Is There a Better Way?


Recently I met Mark Salisbury through LinkedIn. Mark has a company called, TuitionFit.  TuitionFit uses crowdsourcing to help parents and students compare the actual costs of colleges more efficiently.  It allows us to see what colleges and universities are charging other students in very similar situations like grade points, test scores and EFC (Expected Family Contribution).  This gives parents and students real price transparency.  Mark was quoted in this recent New York Times piece.

He also did a Ted Talk titled, The Simplest Way to Bring Down the Cost of College.  You can watch that here.

The first slide in his talk shows the costs of college tuition and fees increasing by 1,332% from 1979-2019 while at the same time family income growth was 359%.  Houston, we have a problem.

Everyone is in the Y.O.Y.O. Economy When Planning for College


I talk a lot about the You’re on Your Own Economy. I mostly focus on professionals who own their own practices like attorneys and dentists or people who have come into money because of a job change, retirement or receiving an inheritance.  But when it comes to saving and paying for our kid’s education, everybody is on their own.  You’re trying to plan and pay for an event whose cost is increasing 3 to 4 times the increase in family wages and normal inflation.  You have a relatively short time to accumulate the money to pay for it and you don’t really know how much it is going to cost for your son or daughter. 

Using tools that I have available like TuitionFit, doing some ongoing planning and monitoring and taking advantage of some of the college savings programs like 529 plans, I think I can help you and your children plan for college.  If you would like to talk about this, feel free to reach out to me.  You can click the get in touch button at the top of my website, email me or give me a call.  As always, thanks for reading!  KB