| People have often asked me, "what's the cheapest | | | | that $90,000 is all they had to come up with out of |
| way to get my kids through college?" My typical | | | | their own pockets. |
| response is "have triplets." Generally that is followed by | | | | Now let's look at the McNeal family. The McNeals |
| a quick laugh by everyone involved. | | | | have two children who are twins. Both of them will be |
| By the time I am talking with families, their "family | | | | going to college in 2010. Again we'll assume each child |
| planning" is long over with. So my response is at least | | | | will graduate in four years, and they also have a |
| half jesting. But there is a tremendous amount of truth | | | | $15,000 EFC. In the McNeal's case since both students |
| to the comment as well. | | | | enter and leave college at the same time, they will only |
| College finances are typically more manageable the | | | | have to come up with the EFC for four years instead |
| more students you have enrolled. The expected family | | | | of six. So their cumulative EFC is $15,000 x 4 = |
| contribution (EFC) is substantially affected by the | | | | $60,000. Now if they chose very generous schools as |
| number of students you have in school at the same | | | | well and were only expected to pay the EFC, then |
| time. In fact for the parent's portion of the EFC, it is split | | | | their out of pocket costs would be $60,000 to get both |
| equally among the students enrolled in college. So if the | | | | their students through college. |
| parent's EFC is $20,000 with one child in college, it will | | | | Consider one more example... the Jones family has |
| be $10,000 for each child when there are two in | | | | twins. Their EFC is $15,000. One child wants to go to |
| college. Now this may not sound like that big of a help | | | | an "expensive" private college (sticker price: $50,000 |
| at first, but consider the following. | | | | per year). The other twin really wants to stay around |
| The Ellis family has two children, two years apart. The | | | | home and goes to the local community college (sticker |
| oldest will start college in 2010, and the second child will | | | | price $5,000 per year). The EFC is still split equally |
| start in 2012. We'll assume for this example that each | | | | between the twins, both at $7,500 each. For the one |
| child will complete college in four years. For the first | | | | twin going to community college, their EFC doesn't |
| child, the Ellis' EFC is $15,000, and because they have | | | | even get down the the cost of the school and doesn't |
| done proper planning, the children will not have an EFC | | | | really give them much benefit. But for the student going |
| contribution to add to the parent's. So their total EFC is | | | | to the "expensive" private college, they still receive the |
| $15,000. Now suppose that the EFC remains constant | | | | full benefit of the split EFC. The first student's cost will |
| throughout the two students' time in college. For the | | | | be $5,000 per year. And because the family chose a |
| two years that both are in school at the same time, | | | | college with a generous financial track record, the |
| 2012-13 and 2013-14; their EFC will be spit between the | | | | second student's out of pocket cost will be $7,500. So |
| two students. Each will have a $7,500 EFC. So for all | | | | the family's annual out of pocket costs will be only |
| six years, the combined EFC is $15,000 x 6 = $90,000. | | | | $12,500. |
| And because they also chose very generous colleges, | | | | |