College is an exciting phase in anyone’s life. It’s when you take your future plans to the next level and start getting ready for your chosen career.
You passed all the classes, you got your high school degree, and you’ve been accepted into the perfect school. Now you just have to find a way to pay for that higher education.
The first thing you need to look at is any and every option you have concerning financial aid. Getting help to pay for college will cut back on how much you end up needing in student loans.
Keep on reading to learn how you can maximize your financial aid in college.
1. Begin Planning Before College
Believe it or not, financial aid departments look at your family’s finances for two years before you even head to college.
That means parents should start thinking about their finances when their children are sophomores in high school if they want the best chance of maximizing their financial aid.
Any choices made during the child’s junior year, especially after the first semester, will affect their financial aid when they apply for college.
2. Understand the Terminology
Learn absolutely everything you can about the way financial aid works.
You’ll need to know what the eligibility requirements are for the FAFSA, what you need to fill it out, how to fill it out properly, and when it’s due.
You also need to become familiar with the Estimated Family Contribution. Not only what it is but how it’s calculated and what it means for your family.
The more you know, the better off you’ll be.
3. File as Early as Possible
Though it may seem like there is an unlimited amount of money to go around, that isn’t quite true.
Financial aid from the FAFSA runs on a first-come, first-serve basis.
The amount of aid you receive could absolutely change depending on when you submit your application. The sooner you get your application in, the better chance you have of getting the maximum amount of aid.
4. Minimize Your Family Income
Income level is the biggest factor in determining your EFC.
Try to keep the taxable income in your household as low as possible when you get to those crucial years before college. That way, your EFC is lower and your financial aid is higher.
Use low-impact techniques to achieve this:
- Don’t withdraw money from a retirement fund early.
- Don’t sell off stocks and bonds for profit.
- Put off bonuses until after aid is awarded.
Anything you receive that is taxable will count as income on a child’s financial aid application. So, always pay attention to how much money you have coming in.
5. Keep Assets in Your Parent’s Name
When looking at assets, anything under the student’s name is going to count more toward your EFC than anything in the parent’s name.
It will always be assumed that you will pay more toward your education than your parents would.
Colleges and the government assume that 20% of the student’s assets will go toward college. It doesn’t matter if it’s actually the case or not, it will be calculated that way.
Meanwhile, they assume that parents will contribute only 5% of their assets.
So, do yourself a favor and keep any meaningful assets under their name while you’re working on getting your financial aid in order. It will work out much better in the end.
6. Use Savings to Pay Off Debt
Debt isn’t a factor in determining how much financial aid you receive, but savings certainly are.
If there is any kind of debt lingering around the household, consider using savings to pay them off so there’s less of a burden to pay on. It sort of kills two birds with one stone in this situation.
Lowering the amount you have stored in savings will certainly increase your financial aid.
7. Check Your Application Again
Take the time to look over your application as many times as necessary.
Seriously, check it as much as you can and then give it to your parents to check over.
Mistakes on your FAFSA can lead to significant delays in awarding financial aid. If there are mistakes, you’ll have to revise your application. Then it will take longer for you to receive your aid.
As we said before: timing is everything.
8. Never Assume Your Eligibility
Don’t just assume you’re not eligible for financial aid. You may be surprised!
Filling out the FAFSA is free and worth the time it takes to see if you can get help paying for college in any way. There’s literally no reason for you not to fill out a FAFSA.
You’ve got no excuses!
Most school-based financial aid requires you to fill out a FAFSA anyway. So, you might as well just get it over with.
9. Look for All Kinds of Financial Aid
To get the most out of your financial aid, you have to explore as many avenues as you possibly can. You never know which ones may be open to you.
The financial aid office is a fantastic campus resource. Talk to the financial aid office at your school to learn about options you might not know about.
Financial aid is a necessary part of any college experience.
The more you’re able to get, the better off you are in the future (and the less you’ll have to work during college). Maximize your financial aid is crucial to setting yourself up for success. Start looking into your finances as early as possible and use these tips to boost your aid as high as it can go.