From our experience, most of the colleges that promise to meet “100 percent of demonstrated need” utilize the CSS Profile, which asks for much more detailed family financial information than the FAFSA does. In fact, one of the colleges that our D applied to in their CSS Profile supplement even asked what year, make, and model cars we drive!
Another factor is that most colleges do not take into consideration the cost of living where you live when calculating your EFC. Our D recently graduated from a “meets 100 percent of demonstrated need” highly selective university. We live in a very high cost of living area, but our EFC for each year for her undergraduate education at the private university was still about 25 percent of the adjusted gross income on our married filing jointly tax return each year. FWIW, I found that that the cost calculators on the various college websites that our D applied to weren’t that accurate for our family’s financial situation, so we received less need-based aid than we expected.
Our D utilized all of her Federal student loans she was entitled to each year, but we declined use of Parent PLUS loans. For the additional funding needed beyond what we had saved up in our parent owned 529 plan, we utilized private student loans which I cosigned for our D because I didn’t want to liquidate our other investments to pay for her college expenses.
Fortunately, because of my high credit score, we received very competitive interest rates on our private student loans far lower than the Parent PLUS loan rates, with no origination fees, and I made both interest and principal payments on both her Federal and private loans throughout the 4 years of her undergraduate study.
Now that she has received her undergraduate degree and excelled in her studies (she graduated magna cum laude), we’re allowing our D to keep her Federal student loans as her responsibility, but I’m refinancing and consolidating her private student loans which I cosigned into my name only as a private parent loan. I’ll have about 1.5 times our most recent annual EFC to pay off in the consolidated private parent loan, which is manageable for us, especially since I received a very competitive fixed rate and no origination fee on this loan, either.
Every family’s situation is different and this strategy might not work for everyone, but it has worked well for us.