It’s the time of year when high school seniors around the country anxiously await the mail. They’ve worked and played hard. And the years of extracurricular activities were all for this time of year.
You’ve been accepted at…
And somewhere in that letter, you will see how much merit money the school is offering. Financial aid letters typically arrive later in the spring.
Student is of course happy that he or she got in to college. But under all of that excitement, the parents are thinking “How am I going to pay for this?”
Recently, I attended a financial aid information session at a local high school. The speaker was a financial aid officer at a local community college.
For me, it was quite interesting to hear the speaker for all of the things she couldn’t say. For example:
“File financial aid forms as early as possible, ideally by the school’s priority filing deadline, and not simply by the overall deadline date.”
What is she really saying? There’s a fixed amount of money in the financial aid pot. Once that money is earmarked, it’s gone.
So financial aid, just like admissions, is partially based on competition among students. He who gets in line first is more likely to get aid.
Another fact from that night: The earliest you can file the FAFSA is January 1st. For some private schools that require the CSS Profile form, it’s Oct. 1st.
Most of the information for these forms comes from your tax return. But you don’t get your W-2 until January 31st of each year. So exactly what information do you put on the aid forms when you can’t even fill out your own taxes until AFTER those dates?
That means you use prior year data. For example, you need to file the FAFSA in January 2012. But your most recent income tax data is from 2010 (you filed your 2010 taxes by April 15th, 2011).
Translation: What you did TWO years ago impacts your financial aid today. Did you get a big bonus then? Or sell stock or a house with a big gain? Those all have huge impact on your aid eligibility.
Fact: “Your eligibility to get aid is based primarily on income, and to a lesser degree, assets.”
Translation: Your debt doesn’t count. You might be up to your eyeballs in credit cards, car loans, mortgages, or even your own student loans from years ago. IT DOESN”T MATTER.
Aid calculations look at how much money you make, not how much you spend at Starbucks each day.
Fact: “Aid eligibility calculations are just a guideline for the college.”
Translation: Just because you qualify for aid doesn’t mean you’re going to get it. But it also means that you might get more aid because they college really wants your son or daughter.
Colleges generally like a diverse student body. Or they might be trying to build up a particular area of study. Whatever the reason, the more the college wants your student, the more likely you’ll get aid.
And that’s where polar bears enter the picture.
What percentage of students at UMass Amherst is from Massachusetts?
74%
What percentage of kids is from outside Alaska at University of Alaska Anchorage?
6%
Now, I’m not saying one school is better than the other or anything like that. But a kid from MA would really stand out at UAlaska.
Which do you think would offer more money to the student from Mass (all other things being equal)?
Having your finances in order goes a long way towards helping pay for college. And saving in financially friendly ways can help your aid eligibility. There are things you can do to improve your odds of getting aid and the amount of aid.
How are you going to pay that bill and how are you going to increase your chances for aid?
Answer to last week’s trivia question – D - $1.37. For every dollar the government takes in tax revenue, it spends $1.37. So either our taxes will have to go up substantially, or spending will have to get cut, or both in order to close that gap.
This week’s trivia question – According to the Greeting Card Association, approximately how many greeting cards are send on or for Valentine’s Day? Is it…
A – 1 million
B – 26 million
C – 150 million
D – 300 million
