Chapter 4: December-January

The Money Talk

When the family finally sits down to understand what college actually costs and what they can afford. Financial reality arrives with shocking numbers and difficult decisions.

The Financial Reality Journey

Late December: The FAFSA Completion

The family completes FAFSA and receives an EFC that shocks everyone—$18,000 per year.

Early January: Running Net Price Calculators

Family sits down together for the first time to run realistic cost estimates for each school.

Mid-January: The Reality Conversation

Parents finally share their actual financial situations and calculate what they can afford.

Late January: Exploring All Options

With financial reality on the table, the family researches alternatives they hadn't considered.

The EFC Shock

Expected Family Contribution: $18,000 per year

Emma's Mom's Reaction:

"Eighteen thousand dollars? That's more than a third of my income! How do they expect us to pay that?"

Emma's Dad's Reaction:

"That can't be right. We don't have eighteen thousand dollars sitting around for college."

Net Price Calculator Results

The family sits down together for the first time to run Net Price Calculators on each school's website:

University of Colorado Boulder
In-State
challenging
Total Cost:

$30,000

Est. Aid:

$7,000

Net Price:

$23,000/year

4-Year Total:

$92,000

University of Georgia
Out-of-State
difficult
Total Cost:

$50,000

Est. Aid:

$12,000

Net Price:

$38,000/year

4-Year Total:

$152,000

Arizona State University
Out-of-State
difficult
Total Cost:

$48,000

Est. Aid:

$15,000

Net Price:

$33,000/year

4-Year Total:

$132,000

University of Alabama
Out-of-State
challenging
Total Cost:

$47,000

Est. Aid:

$20,000

Net Price:

$27,000/year

4-Year Total:

$108,000

The Reality Conversation

Emma's parents finally have the conversation they should have had a year ago:

Mom's Financial Reality
  • • Annual income: $55,000
  • • Current college savings: $8,000
  • • Monthly budget available: $500-600
  • • Maximum comfortable debt: $20,000
Dad's Financial Reality
  • • Annual income: $72,000
  • • Current college savings: $12,000
  • • Monthly budget available: $700-800
  • • Maximum comfortable debt: $25,000
Combined Family Capacity
  • • Total savings: $20,000
  • • Monthly contribution capacity: $1,200-1,400
  • • Comfortable debt limit: $45,000
  • • Realistic four-year budget: $85,000-90,000

The Emma Revelation

Emma's Questions
  • • "So we can't afford any of the schools I applied to?"
  • • "Why didn't anyone tell me this before I applied?"
  • • "What happens if I don't get merit scholarships?"
  • • "Should I have applied to cheaper schools?"
Her Parents' Honest Answers
  • • "We can make some of them work, but it'll require sacrifices from all of us"
  • • "We should have had this conversation much earlier"
  • • "Merit scholarships become really important for our family"
  • • "We might need to consider other options we haven't explored"

Exploring All Options

With financial reality on the table, the family starts researching alternatives they hadn't seriously considered:

Community College Start
Two years at local community college, then transfer to CU Boulder
$54,000 total

Pros:

  • • Much more manageable financially
  • • Still gets CU Boulder degree

Cons:

  • • Misses traditional college experience
  • • Delayed campus life
Emma's Reaction:

"I don't want to miss out on the college experience"

In-State Focus with Jobs
Emma works part-time during college, parents take moderate debt
$92,000 with family contribution

Pros:

  • • Emma gains work experience
  • • Stays at preferred school

Cons:

  • • Less time for studies and activities
  • • Family takes on debt
Emma's Reaction:

"I'm willing to work if it means I can go"

Merit Scholarship Strategy
Focus on schools where Emma's stats might earn significant merit aid
Varies by school and aid

Pros:

  • • Could significantly reduce costs
  • • More options to consider

Cons:

  • • Uncertain scholarship outcomes
  • • May require gap year
Emma's Reaction:

"Is it too late to find these schools?"

Out-of-State with Major Debt
Family takes on $50,000+ debt for Emma's dream schools
$100,000+ total debt

Pros:

  • • Emma gets first-choice school
  • • No compromises on experience

Cons:

  • • Financial stress for years
  • • Impacts family's other goals
Emma's Reaction:

"This doesn't feel responsible"

Lessons from the Money Talk

Emma
  • College costs are much higher than she realized
  • Financial aid doesn't cover everything
  • Her family's income affects her college options
  • She needs to be realistic about debt and its consequences
Mom
  • The EFC formula doesn't reflect their actual financial capacity
  • Starting college savings earlier would have created more options
  • Honest financial conversations should happen before applications, not after
Dad
  • Telling Emma 'not to worry about money' was counterproductive
  • Merit scholarships are crucial for middle-income families
  • College planning requires understanding both academic and financial fit
What They Wish They'd Done Differently
  • Started financial planning junior year with realistic cost estimates
  • Built Emma's college list around both academic and financial fit
  • Researched merit scholarship opportunities earlier in the process
  • Had honest family conversations about money before application deadlines
  • Considered a wider range of financially feasible schools

Looking Ahead

As February approaches, Emma's family finally has a realistic understanding of their financial situation. They're anxious about financial aid offers but better prepared to make informed decisions.

The late financial planning has limited their options, but they've learned valuable lessons about college costs, family finances, and the importance of early planning.

Coming Next: February-March
Waiting and Worrying

The anxious months when applications are under review and the family learns more about financial aid processes.

Continue to February-March

Chapter 4 of 6

December-January: The Money Talk

Next: February-March