Potential Magazine College and Career Organizer 2020 | Page 46

9
pay the way
maximizing financial aid
Sponsored by:
TIPS FOR MORE FINANCIAL AID
To ensure the best federal financial aid package possible,
consider these tips:
HAVE YOUR CHILD SAVE IN YOUR NAME DISCUSS SPECIAL CIRCUMSTANCES
PAY OFF YOUR DEBTS SELL YOUR SECURITIES SOONER
RATHER THAN LATER
Students are expected to contribute 20% of their savings
towards their education while parents have 5.64% expect-
ed contribution. So students should put savings in their
parents’ names while in high school and college to boost
the amount of loans and grants they receive.
FAFSA considers your income and assets, but does not
consider how much of your money is tied up in bills.
Additionally, college loans may have higher interest rates
depending on your credit score. So, it is wise to pay off
credit card and loan debt to increase aid eligibility and
lower the loan interest rates.
DON’T WAIT, SEND SIBLINGS
FAFSA uses the number of children you have in college
when calculating your expected contribution. If you have
a child who is expected to start college only a year or two
after an older child, go ahead and let him or her apply, as
the amount of aid you receive will increase to meet the
increased financial burden.
INCLUDE UNBORN BABIES ON YOUR
FAFSA
Part of federal financial aid depends on how many chil-
dren you support, and the age of dependent children does
not matter. So if you are pregnant when you are filling
out your student’s FAFSA, you can include your soon-to-
be baby, which lowers your expected contribution and
increases your child’s loan and grant amounts.
INVEST IN YOUR FUTURE EARLY
If you have special circumstances limiting your ability to
pay for your child’s college tuition such as high medical
or legal expenses, the financial aid office may be able to
work out a better loan and grant eligibility for you than
the impersonal FAFSA formulas.
Money gained through selling stocks and bonds up to a
year prior to filling out the FAFSA is considered income.
If you have securities that you want to sell, sell them at
least two years before college to prevent reducing the
financial aid package.
GET THE GRANDS INVOLVED
Although money given to students by their grandparents
for college can be considered a gift on the FAFSA, a 529
savings plan held by grandparents will not be counted as
an asset for your child’s financial aid eligibility and is a
great way to save money without impacting financial aid
packages.
BE HONEST
It is more important that you are honest on your FAFSA
and guarantee some financial aid rather than risk losing
all aid by manipulating information to appear as if you
have a lower income or fewer assets.
This list is not meant to be exhaustive, so be
sure to work with your financial advisor and
the college financial aid offices for more tips
and advice.
The FAFSA does not require you to list assets you may
have in the form of IRAs or 401(k)s. However, your prior
year’s contributions to retirement accounts may count as
income, so any money that you plan to invest for retire-
ment, try to do so at least two years before completing the
FASFA.
46 | College Organizer 2020
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