What should you be doing right now if you’re the parent of a college-bound student?
- Start visiting colleges and universities that your child is interested in applying to.
- Have your child take a good test preparation course to get a better SAT or ACT score.
- Start looking for private scholarships.
- Start setting up your income, assets, and personal finances to get the maximum amount of money from each school.
- Don’t procrastinate.
Parent’s FAQ About Financing Your Child’s Education
Most students whose families make $40,000.00-$100,000 per year are eligible for some form of financial aid. Over 30 billion dollars is available each year from the Federal Government, the states, colleges, and universities, and private foundations and organizations. You have to figure out how to get your share of aid. Most parents give up before they start because they assume they won’t be eligible, but that is exactly what everyone does! Make sure to apply. You will probably be eligible for some money.
By filling out the FAFSA form, and doing it early, you will be able to determine what financial aid your student is eligible for. Make sure the information is accurate so that you can see if your student qualifies for need-based financial aid.
Do not assume that only minority students, athletes, and academically gifted students get financial aid. Need-based financial aid is solely awarded based on financial need, which is calculated by taking the cost of attendance at a school and subtracting the family contribution (the minimum amount the government feels you can afford to pay, based on your income and assets and your child’s income and assets). Whatever is left over after you subtract these two numbers is your financial need, your eligibility for financial aid at a particular school.
COA (Cost of Attendance)
-FC (Family Contribution)
= FN (Financial Need)
As a general rule, it is not a good idea to let your CPA or tax preparer fill out your financial aid forms, even if she/he is qualified. They are experts at tax planning and preparation, not financial aid planning. They might suggest that you put some or all of your assets in your child’s name to save on taxes, but following this advice will usually kill your chances at getting financial aid.
Also, they are not trained in filling out financial aid forms so they may fill them out improperly. These minor mistakes can bump your forms and cause delays. You will have to re-submit them and it will put you at the bottom of the list, causing you to lose time and probably thousands of dollars.
Don’t wait until January of your student’s senior year of high school to start working on your college financial aid planning. Financial aid is based on your previous year’s income and assets, so it is imperative to start planning with your student as soon as possible before January. If you want to legally set your income and assets so you can maximize your eligibility for financial aid, start working on this at least a year in advance. The beginning of your student’s junior year of high school is a great time to start.
529 Savings Plan
The 529 savings plan is designed to assist families with saving for college. To learn more information you can visit www.path2college.com