09/26/2012 06:14 pm ET Updated Nov 26, 2012

The New College Timeline

Prior to the 2008 economic downturn, if you asked a high school counselor to describe the timeline for the college search and selection process, you would hear a common theme. Most of us in the profession would have encouraged students and parents to begin exploring colleges sometime during the junior year. Exploration could entail perusing college websites, attending college night programs, speaking with college representatives when they visit high schools, reviewing college guides, and visiting college campuses.

Exploration would often include using college search software that asks students to answer questions regarding their preferences. Questions like, "What type of college (two-year or four-year) interests you? What major or program of study interests you? What geographic location do you prefer? What extracurricular activities interest you?"

Answering these questions allowed students and parents to develop an initial list of colleges to pursue. Then, as they used the other tools and resources mentioned above, students would narrow their lists at the start of their senior year. Seniors were encouraged to apply to multiple colleges, perhaps as many as 6 to 10.

After students complete their applications, they and their parents file the Free Application for Federal Student Aid (FAFSA), and in some cases, the CSS Profile. These forms are used by colleges to determine financial aid eligibility.

Following this traditional timeline, families did not learn what their out-of-pocket cost, a term we now call net price, would be for each school until March or April of senior year. The college decision deadline was (and still is) May 1st.

The hazard of this system, of course, is that it was (and still is) very possible that families could spend six to nine months of time, money and energy researching and applying to colleges -- all of which could turn out to be unaffordable options. This led directly to the excessive borrowing of money to fund college, i.e. the college debt crisis!

After 2008, I realized that if we really wanted to help families and end this cycle of college debt, this system had to change. In 2009 I developed the Financial Fit College Search Method. Using this method, families do not start the college search process by talking to college reps, visiting college campuses, or searching for schools by personal preferences alone. Instead, families start the process by systematically assessing what they can actually afford to pay for college yearly -- their affordability threshold. This analysis includes tax credits, cash flow, available savings after an emergency fund, and reasonable family borrowing. I created a 10-item questionnaire to help families determine their affordability threshold.

Next, families learn how to match their affordability threshold with the net prices of colleges. To facilitate this process, I created eight college categories (the Magic 8), which I developed based on my 25 years of experience analyzing college award letters. I learned that net prices for individual families look similar at similar types of colleges, such as flagship state schools, highly selective private colleges, and so on. To determine which categories they can afford, families choose one or more schools from each category and use net price calculators, which are now available on every college's website, to assess their estimated net price at each school.

This is the key to finding financial fits. Using the traditional search method, families are likely to select colleges that are relatively similar to each other and have comparable net prices. With the financial fit method, families can discover different, and often unexpected, kinds of colleges with different net prices that are good Financial Fits. This process leaves students with a more diverse list of options to choose from as they then begin to consider which colleges fit them best academically, socially, geographically, and so on.

Rather than immediately narrowing down their lists of potential schools based on factors like size and location, students are only eliminating colleges from their initial lists if they are significantly unaffordable. Remember, affordability is not based on sticker price (the college's listed price). It is based on net price, what a family pays out-of-pocket after scholarships, grants, a job on campus, and student loans are accounted for.

The beauty of this system is that the cost of college is figured out before students even send out their college applications. Families can avoid the wasted time, energy, and money that results from pursuing unaffordable college options -- and, most importantly, they can avoid the excessive college debt that is plaguing the future of our young people.

Visit College Countdown to learn more about Frank Palmasani and how he can help you figure out what you can afford to spend on college.