9 Things You Probably Didn’t Know About … Financial Aid for College
Paying for college can be a nerve-wracking rite of passage. Not only are you probably dealing with huge sums of money, but the complex process of making decisions about loans is often trusted to 17-year-olds, who may or may not have ever managed money before.
Add to that the confusion that even parents feel when faced with the math and subtle nuances of covering the high costs of college, and it’s a journey that’s ripe for potential errors.
Since we’re big proponents of proper financial planning, we consulted pros in the field of financial aid to find out some of the misconceptions, myths and mistakes that students and parents can make when trying to pay for college. And then we helped set the record straight.
1. Every college applicant should fill out the FAFSA. And you should do it every year.
The FAFSA (Free Application for Federal Student Aid) is akin to a golden ticket. It’s what the federal government and schools use to decide how much to give or loan to a college-bound student. You should fill it out-—even if you think that you won’t qualify for any money.
RELATED: Millions Miss Out on College Aid
“I often hear from families who apply for financial aid the first year that their eldest child goes to college. They don’t get anything other than low-cost loans, so the second year, they may say, ‘Why bother?’ ” says Mark Kantrowitz, senior vice president of edvisors.com and the author of “Filing the FAFSA.” “But the financial aid formulas are very complicated, so there are very subtle things that can change from one year to the next that can have an impact on aid eligibility.”
Maybe your second child is heading to college while your first kid is still in school or maybe your income changed. Or it’s possible that the colleges your second child is applying to are more expensive. All of these things could mean that your younger child receives more grant and scholarship money.
Bottom line: Fill it out every year that you have a child attending college. (Here’s more on how to fill out the FAFSA.) You have nothing to lose and potentially a lot to gain.
2. The earlier you send in your FAFSA, the better.
The form usually comes out on the 2nd or 3rd of January each year, and that’s precisely when you should consider filling it out, so you can potentially get to the front of the line for nabbing a piece of the financial aid pie.
Why, you ask?
It’s simple: There’s generally more money to give away at the start of the financial aid application season. “So you need to be organized,” says Damian Rothermel, a CFP® who specializes in college funding. “If you’re not in the front of the line, you typically have to be a better prospective student to get the same amount of money.”