College-bound high schoolers focus on a strong finish

Bill Cass, CFP®, CPWA®

Bill Cass, CFP®, CPWA®, 09/08/21


As students get closer to making that final college decision, the last two years of high school are particularly important.

Parents will want to review their financial strategy to meet the costs of college, taking into account current savings, financial aid, school merit, and loan options. Students face many deadlines for standardized tests and application requirements.

Having an action plan can help families focus on multiple tasks, stay on top of the deadlines and decrease stress. Putnam has a four-year action plan for parents and students that can be helpful for staying on track.

Considerations for junior year

While not quite crunch-time in the task of preparing for college, the junior year is busy as parents research deeper into financial aid and juniors think more about academic requirements. Since the application process begins during the first half of senior year, a student’s academic record during junior year is especially important.

Financial priorities for parents

  • If needed, explore a home equity loan as a potential source of funding
  • Determine the expected family contribution (EFC) for financial aid. The EFC process factors income from the "prior-prior" year. This means that, for a student entering college in the fall of 2022, the financial aid calculation will be based on information from the 2020 calendar year tax return (which was generally filed in April, 2021). Note that increases in income, for example, from the sale of a stock or a Roth IRA conversion, may negatively impact aid
  • The financial aid calculator (FAFSA4caster) on the FAFSA website (studentaid.gov) can estimate potential federal financial aid. Review 529 account ownership to determine if changes are appropriate when considering financial aid. For example, for the next couple years, withdrawals from 529 accounts not owned by the parent (such as a grandparent) may negatively affect the next financial aid award
  • Research whether targeted colleges require the College Scholarship Service Profile (CSS Profile) application as part of their financial aid process in addition to the FAFSA application
  • Start compiling information for FAFSA submission, including tax returns and information on savings, investments, and assets for both the parents and student(s)
Action items for students
  • Research college costs and financial aid with parents to establish expectations around school options and funding
  • Prepare for standardized tests (PSAT in the fall, SAT/ACT later in the year); take a test prep course or work with a tutor
  • Build a resume including interests, summer employment, internships, community service, and achievements
  • Start compiling your target list of schools based on various factors (academic fit, cost, geographic preference, type of school, type of campus, etc.)
  • Begin college visits, making sure to get contact information for the admissions contact assigned to your region. Email each contact to establish the relationship and provide an indication of interest in the school
  • Get advice from older friends and family who have recently gone through the process
  • Before the end of the school year, meet with teachers, coaches, or mentors to request letters of recommendation
  • Make sure coursework, such as number of Advanced Placement (AP) classes, reflects the academic requirements of targeted schools
  • Register with the NCAA if pursuing athletics

Considerations for senior year

Senior year in high school is a memorable one as students focus on a major milestone: graduation. For students planning for college, it’s a year with many deadlines and final preparations.

Financial priorities for parents

  • Ask employer if scholarships are available for children attending college
  • Make sure you have enough liquid assets for college-related expenses. This may require investment transfers within college savings accounts to more conservative options
  • Consider allocating funds within a custodial account (for example, UGMA or UTMA) or a regular savings account for travel costs, which are not considered "qualified expenses" for 529 plans
  • Identify which savings accounts to tap into first for expenses based on investment, tax, or financial aid considerations
  • Research tax credits and deductions to help with college costs
  • Attend a college aid workshop or meet with a professional college counselor
  • Complete the FAFSA form (between October 1 and June 30). Note that many states and colleges request FAFSA submission as soon as possible after October 1
  • Have student complete a healthcare proxy when turning 18 and before going to college
Action items for students
  • Over the summer, start working on the Common Application and college essay and consider taking the SAT in the fall
  • Review social media accounts before applying to make sure posted content would not jeopardize an admissions decision
  • Start to establish a professional presence by creating a LinkedIn profile
  • Complete applications as soon as possible; be aware of early decision/early action and regular decision dates; make sure the high school has the final list to send transcripts
  • Research and apply for local scholarships
  • Schedule official campus visits when school is in session to experience daily life on campus, and set up on-campus interviews
  • If pursuing athletics, contact coaches to schedule official on-campus visits in the fall
  • Trim your college list to a range of options: safety, match, and reach schools
  • Keep track of all user ID/passwords for each college admission page as they review your application; check frequently to make sure all items are received

Consult with an advisor

A financial advisor can help families navigate the entire process. From saving and financial planning and taking advantage of tax-efficient strategies, an advisor can be a critical resource. Check out our college savings page for tools to help calculate costs and select the plan or plans that fit your savings needs.

link to 529 page on website

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