Don’t make any of these five college financial aid mistakes
1. Failing to Apply
2. Missing the Deadlines
3. Starting a College Savings Account in Your Child’s Name
4. Forgetting to Budget for “College Life”
5. Failing to Investigate Lenders
Failing to Apply for Scholarships, Grants, and Student Loans:
Many families miss out on financial aid simply because they have a pre conceived notion that they won’t qualify. The old saying “you’ll never know unless you try” could not be more true and in this instance it could save you a lot of money. Private schools are so pricey these days that it is not uncommon for families that earn $100,000 or more to be granted financial aid.
What many people don’t realize is that financial aid offices will also take into account extra expenditures that are specific to each family. For example, if a family has two or more children in college at one time the financial aid offices will take this financial burden into consideration.
Missing the Financial Aid Deadlines:
When it comes to forms required by financial aid offices, the due dates are all over the calendar. Most people are familiar with the FAFSA (http://www.fafsa.ed.gov/). The official due date of this form is June 30th, however, some schools require this form as early as January. It is important to check the deadlines for scholarships and financial aid offices as soon as you know you will be applying for a type of aid. Don’t wait until you have been accepted into a school start the financial aid process as soon as you know which schools you wish to attend.
Starting a College Savings Account in Your Child’s Name:
Your child is little and you are already thinking big by starting a college savings account. Naturally you want to open the account in your child’s name after all you have designated the money you are saving as your child’s. However, when it comes time to be evaluated for financial aid your child is required to pay 35% of their assets to college expenses. You as a parent with a plethora of financial burdens are only required to 5.64% of your assets for college expenses. It is therefore more prudent to keep your college savings for your child in your own account.
Forgetting to Budget for “College Life”:
You have accounted for the books, tuition, residence, and the food but there is one very important aspect of going to college that can really add up, “College Life.”
Going to a concert, getting some clothes, going on a date are expenses part of the experience. Depending on where you go to college the cost of living can add an extra two or three thousand a year. Look at the cost of living and try to budget in those expenses when you are figuring out your financial aid.
Not Shopping Around for Lenders:
Lenders can make big business off of college loans, that’s why many lenders have made deals with colleges and universities. The financial aid offices of these schools will promote these lenders almost explicitly. Try finding a non-profit agency that specializes in education loans. Because the agencies have a non-profit status they can offer a better rate on an education loan. As always when it comes to financial aid make sure you do your research before signing anything.
