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Financial Aid: 8 Important Points
By Heather Bruce
Financial Aid is Given on a First-Come, First Served Basis
In the world of financial aid, good things do not come to those who wait! It is a “first come, first served” situation. The priority filing date for the Free Application for Federal Student Aid (FAFSA) is January 1st of the student’s senior year in high school. Private schools and colleges requiring the College Scholarship Service Profile (CSS Profile) form have deadlines varying from school to school that are just as important to keep track of. Missing deadlines of financial aid forms basically guarantees you will have a smaller pot of money to share.
Apply for Financial Aid, No Matter What!
Financial aid experts assess a family’s entire financial situation, from the number of children in college to special situations like high medical bills or a recent loss of employment. It is worth a shot! Whether you have hefty bank accounts or live paycheck-to-paycheck, it may be possible to receive financial assistance with your child’s college education.
Your Savings May Disqualify You for the Aid You Are Counting On
Savings accounts, 529 Plans, CD’s, and other assets may disqualify you from receiving financial aid if they are not positioned correctly. In most cases, any money in the student’s name will be weighed much more heavily than money in the parents’ names. This is almost the exact opposite of what a CPA or tax preparer would suggest! It is vital that you consult the services of a qualified college funding professional before altering your financial profile.
Dot the I’s and Cross the T’s
Mistakes on your financial aid forms can cost you precious financial aid dollars. The FAFSA form, the CSS Profile, and a college’s own Institutional forms must be completed correctly and on time. Are you using the proper year’s tax forms? Is the non-custodial parent’s information required? How much home equity should be reported? Answers must be consistent across all financial aid documents and often schools will request proof such as copies of tax returns or balance sheets.
Private Schools May Cost You Less Than a State School!
Private schools with expensive tuition rates have large endowment funds from distinguished alumni, meaning they have more aid to give to incoming students than a state school. Private schools often pride themselves on having a diverse student body including diversification of all income levels. If your student is a strong candidate for a private school, then the chance of receiving aid is high if you demonstrate the need. Experts recommend deferring cost considerations until late in the college selection process. Ignore the “sticker price” and concentrate on finding schools that match a student’s academic, career, and personal needs.
There is no Financial Aid for Retirement, There is for College
College funding is a retirement problem. At Education Funding Solutions, we encounter too many people planning to use their 401(k) and IRA money to put their children through college. We strongly discourage this course of action. You may face penalties for withdrawing funds prior to retirement age, and any money you withdraw will be added onto your income, decreasing your eligibility for receiving financial aid. If possible, wouldn’t you take advantage of the financial aid—grants, scholarships, low-interest loans, work-study programs—that may be available to help you pay for college? After all, when you enter retirement age, can you count on a hefty grant or generous scholarship to help you enjoy your golden years? Unfortunately not!
Understand How Home Equity Can Help Pay for College
Hopefully even in this “soft” real estate market, your house has appreciated into the gold mine you were banking on. Instead of refinancing, taking the check and dividing it between your child’s college of choice and your retirement home on a remote island in the Caribbean, make your home equity work for you. Education Funding Solutions can put together a personalized plan to make your college-bound child’s and your retirement dreams become reality.
There Are Professionals Who Can Help!
College Funding Advisors are a little known but important ally in the financial aid process. A qualified advisor will be able to take a look at your overall financial situation and determine if your assets are in the best position to qualify for the most financial aid possible. College may be one of the biggest investments your family will ever make. Don’t go at it alone!
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