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How to Maximize Getting Financial Aid for College Print E-mail

Interested in maximizing your financial aid award, or your child’s financial aid award, for college? Start by taking steps prior to applying for financial aid that may put you or your child in a better position to receive more financial aid. Once you receive a financial aid offer, know how to scrutinize it and how to deal directly with the financial aid office if you appeal the award.  

Prior to Applying for Financial Aid:

·         Minimize Income
If you can minimize parental income (or your income) in the base year (the year prior to the year the financial aid will be awarded), this may increase a financial aid package for your child (or for you). Minimize income in a number of ways that are all legal, according to www.finaid.org. Some of these include: o    Increasing household expenses prior to filing for financial aid o    Planning to enroll two or more family members in college at the same time o    Prepaying your mortgage o    Minimizing any capital gains You can also contribute the maximum to any retirement plans, in order to minimize reportable income. Avoid dipping into retirement plans to pay for college, as this will increase your reportable income. Timing of the possession of assets is crucial. If relatives want to contribute money for college education, ask them to save that money until after the student graduates. That way, it can help to minimize your income when initially applying for aid. 

·                     Minimize or Spend Down Your Child’s Income
Putting assets in your child’s name may actually negatively affect the amount of financial aid that your child is eligible for, as income contributions from children and from parents are given different weights by financial aid grantors. Students are expected to contribute more than parents, since it is assumed that parents have greater and more numerous financial obligations. The solution is to spend down the child’s account to zero. You’ll have a chance to receive more financial aid in upcoming years, when your child has less income to report. 

·                     Invest in Vehicles that are Designed to Save for a Child’s College Education, but are Set Up Legally as Parental Assets
Specific investment vehicles designed to help money grow for your child’s college education include the 529 College Savings Plan and the Coverdell Education Savings Account. The added benefit of these accounts is that the assets are in the parent’s name rather than the child’s.  

After the Award Has Been Offered:

·                     Study Your Award Letter
Once you or your child have received a financial aid offer, be prepared to study it carefully. Study the ratio of loans to grants (or free money). If it seems to you that the offer is heavy on loans, and lean on grants, study your application materials again for mistakes you may have made. If you’ve applied for financial aid at a few colleges, you can use the FinAid Web site’s award letter comparison calculator at http://www.finaid.org/calculators/awardletter.phtml. The calculator may give you a good idea of what you might expect. If the actual award letter varies greatly from the calculator, mistakes may have been made on your end or in the financial aid offices.  

·                     Appeal Rather than Negotiate
If you decide you want to approach the financial aid office and question the award given, use the mind set of appealing rather than negotiating – question rather than demand. As you move into any explanation, stay calm and keep emotion out of the conversation. Explain simply if any family financial circumstances could not be adequately explained in your application materials. 

·                     Use Better Financial Aid Packages as a Bargaining Tool
If you or your child received impressive financial aid packages from other colleges you’ve applied to, don’t be afraid to mention these as you appeal your award with the college you’re dealing with. You may be able to rouse the college’s interest if they can be convinced of your value or your child’s value as a prospective student.

·                     Dig for Scholarship Information That May Have Been Overlooked
If you are still unable to get the college in question to increase your grant award and decrease the reliance on loans, make sure that there are no scholarships that have been overlooked. Colleges offer many of their own private scholarships.
 

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