Understanding College Financial Aid for Parents
4 College Financial Aid Basics to Help Your Child Realize the College Dream
As the parent of a child who is about to attend college, or who is already in college, you may feel overwhelmed by the huge sums of money involved. You may look at the tuition, room and board, living expenses, and travel requirements, and think that you cannot afford to give your child a quality education. Fortunately, there is help available. There are billions of dollars available in college financial aid and scholarships if you know where to look and apply for them properly.
Here are four things you can do as a parent to come out a winner in the college financial aid game:
1. The FAFSA is Key
The Free Application for Federal Student Aid (FAFSA) is your key to unlocking billions of dollars in federal grants, loans, and work-study funds. Many states and colleges also use the FAFSA to determine your eligibility for state and school aid. Some private financial aid providers may even use your FAFSA information to determine whether you qualify for their aid. Unfortunately, the Department of Education has repeatedly stated that most students do not receive the full amount of financial aid to which they are entitled because of errors or incomplete information on the FAFSA. Avoid these seven common FAFSA mistakes and increase your child’s chances of receiving financial aid.
2. FAFSA Mistakes Can be Costly
In an electronic posting published 7/18/14, the Office of Federal Student Aid announced that it is going to reprocess approximately 200,000 financial aid applications due to an applicant error in entering income data.
When the lengths for income fields on the FAFSA were extended from 7 to 9 characters, applicants were able to mistakenly add cents into the fields. The additional two digits were calculated as dollars, leading to miscalculations in Expected Family Contribution (EFC). After you complete the FAFSA, you will receive a Student Aid Report (SAR) summarizing the data you submitted.
Check this information carefully to be sure there are no errors, as this could impact the amount of financial aid your student receives.
3. Sometimes You Need to Do More
If there is an error on the FAFSA, you need to take steps to correct that error. When federal student aid is not enough to cover all of your child’s expenses, you will have to do extra work. Make sure you have maximized the amount of financial aid from your state and your child’s college. Always be on the lookout for scholarships that can help cover some of the costs. It’s always better to utilize “free” money through financial aid and scholarships first, but sometimes you will have to access federal and private student loans to bridge any remaining gaps. Make sure you understand the student loan basics so you can help your child make smart financial choices.
4. Don’t Wait to Talk to Your Child About Money
Sometimes parents feel obligated to shoulder the entire financial burden for their children’s college education. While this is a nice thought if it’s possible, it may not help your children down the road as they are forced to make their own financial decisions in life. Start having money discussions when you student is a high school junior, just beginning to think about college.
Help your child understand the full costs, and get him or her involved in the decision-making process.
Parents don’t have to do all the work for college financial aid themselves. Involve your child and you’ll both get a great education!