Financial Aid FAQs
It seems that paying for college is a bigger burden for parents today than it was for our parents just a generation ago. Why is that?
Recent statistics from the College Board point out that over the past 20 years the average tuition cost of a four-year public university rose 106% while family income only grew 27%.
Combine that with these survey results: only half of parents with children under the age of 18 have saved a dime for college.
You have a much bigger hill to climb paying for college today, which is why more families are relying on the financial aid system to fund college.
If cost is the deciding factor in which college my child attends, should we only look at state schools and avoid private universities altogether?
Income is only one factor in the financial aid formulas. There are a number of other factors weighing into the equation. The biggest reason families don’t get aid is that they don’t bother to apply. Only 42% of families with incomes over $100K applied for aid, yet 82% of those families who did apply received some financial aid. You have to apply in order to get it.
Yes, there is. By understanding, or working with someone who understands, how the financial aid formulas work, you may be able to reposition your income and/or assets in such a way as to reduce your Expected Family Contribution, thereby making you eligible for more financial aid.
If the financial aid formulas look at our assets, how should we be saving money for college so we do not hamper our ability to get college financial aid?
To maximize financial aid eligibility, you want to have money put aside in assets that are sheltered from the financial aid formulas. A Roth IRA, for example, is not included as an asset in the federal formulas. It allows for penalty-free withdrawal of your principal for education without affecting your aid eligibility.
Sophomore year of high school is when you need to finalize planning for financial aid. What families don’t realize is that even though they fill out the financial aid applications during senior year, they are actually using tax information going back to the student’s sophomore year. So if your child is a junior in high school, the financial aid process has already begun. When your child is a sophomore you still have time to change some of the variables that impact the financial aid formulas.
Our Services FAQs
A college planning consultant is an expert in the exact methods necessary to reduce your college costs, while showing you how you can keep much more of your savings. Often our work necessitates coordinating with your existing advisors.