Alright folks, I always get asked to give checklists and tasks to families in search of financial aid. While I am not a huge fan of giving step-by-step instructions (every family’s situation is different, after all), I did cave a bit. Below are some different things you can be doing RIGHT NOW to maximize your chances of getting financial aid. When I say RIGHT NOW, I don’t mean senior year. These are things you should be considering early on.
Here we go!
1.) Make sure your child applies to at least 6-8 colleges/ universities
If you want to maximize your financial award offers then colleges need to have some competition. If you recall our blog from last month, we showed you how colleges can use the FAFSA to leverage their financial aid awards. We advise that you pick an assortment of “safety schools”, “competitive schools”, and “reach schools” and apply to them.
Also, try to weigh your college picks to ensure that your child is in the top 25% of the incoming freshmen class for at least 2/3’s of them. You can find statistics for SAT/ACT scores and G.P.A.’s on the schools’ admissions sites or via college guidebooks. If your child is a top candidate in comparison to the applicant pool, then he/she is in better standing to secure a good financial aid package.
2.) Find out how to value your home… the right way
Most families end up over-valuing their homes for the purposes of financial aid. As you may notice, the home values in California (where we live at CPE) are much higher than other parts of the country. If you list your home value based on California standards, then you may be losing thousands in aid. Instead, we advise you use what the schools use: “The Housing Index Multiplier.” This is based on your home’s original purchase price and the year you purchased it. Find out what your “multiplier” is via the tool and use this value for your home. It will help… a lot!
3.) Definitely partake in income and asset planning to lower your out-of-pocket costs
This may seem like common sense, but you MUST set up your finances in a way that will maximize your eligibility for college financial aid. What do we mean by setting up your finances in a way to maximize eligibility? Well, one thing is savings. Did you know custodial savings accounts are assessed at a higher percentage towards your family’s expected out-of-pocket contribution towards college than money saved in the parent(s)’ names? Well, if you didn’t you sure to now. Assets held in the wrong place will limit your chances of getting money. Think these things through: should a sibling attend college part-time to increase your eligibility? Are you properly valuing your real estate?
If you’re not sure, you’d better find out the answers to these questions before it’s too late!
4.) Don’t apply for Early Decision if you want to get the maximum award package a school can offer
If your child applies Early Decision for college then he/she is locked into going to that school. This is a huge mistake if you’re trying to get the maximum amount of money for college. The reality is that if a school knows you have to attend their institution if they accept you, then they have no competition for aid. They can award you whatever they want.
5.) Find each school’s individual deadlines for financial aid… they differ! Don’t miss one!
The earliest date you can file the Free Application for Federal Student Aid (FAFSA) is January 1; however, many private colleges and universities will also ask you to fill out a separate Financial Aid Profile (FAP). Different schools have different deadlines for this form, but they can open as early as October 1. That means, in some cases, your senior in high school will be applying for financial aid before applying to the college for admission. Crazy, we know! You have to be organized and know the rules for each school. Don’t miss a deadline – it will cost you a lot of money in lost financial aid!
6.) Look for private sources to fund college
I have to caution you here because you don’t want to waste too much time looking for private scholarships. Private scholarships make up roughly 3% of the total financial aid out there. The other 97% of aid comes from the government or from the school. You’ll want to spend most of your time in the 97%, but for the 3% of your time… focus on local awards from foundations, organizations, and corporations. You can usually get more information on these awards from your child’s high school guidance counselor.
7. Don’t let the schools give you a false sense of security
Most financial aid officers and high school guidance counselors tell parents, “Don’t worry about it – it’s an easy process. Just fill out the forms, and you’ll get an award letter.” Unfortunately, it’s not that simple. Did you know that the definition of “net worth” on the FAFSA is not the same as the real world definition of “net worth?” If you read the subtext on the FAFSA for a separate definition of “net worth” then you would know, but how often do we read through the small font attached to a form? If we do, how detailed of a job do we do at reading it? The FAFSA is not straight forward, and neither are other financial aid forms from schools. You have to know the subtext of these questions to make sure you’re answering them correctly. If you want to get the maximum amount of money from each school, you’ve got to set up your finances properly, fill out the forms accurately and on-time, and negotiate with colleges and universities to get the best possible financial aid package.
While we 100% respect the hard work that high school counselors do for their students, they aren’t financial planning experts, nor are they whizzes at filling out financial aid forms. They are trained to guide their students from high school to college/ career. College financial aid officers may offer to help you apply for financial aid, but I always say that going to a financial aid officer and asking them to help you get more free money from their school is like going to the IRS and asking them to help you save money on your taxes! It’s not in a school’s best interest to teach you how to get more money from their school. They have a limited number of funds to give out to a large number of people.
So, there you have it! My checklist for aid is my gift to you. If this seems like a lot to handle on your own, we get it. We’d be happy to help! Call College Planning Experts at 661-295-9946 and schedule a free consultation. Just reference this Blog, and you’ll be able to meet with us, one-on-one for an entire hour, at no cost to you!