Financial Aid Tips #l Have your student apply to at least 6 to 8 colleges or universities.
Many people including high school counselors recommend that students apply to a number of schools. The types of schools your student should apply to fall into 3 categories. They are:
- Safety schools. Safety schools are schools your student knows that he or she can get accepted to.
- Competitive schools. These are schools that your student would be in competition for acceptance based on their scholastic status, leadership, test scores, etc.
- Reach schools. A reach school would be identified as a school where your student has a lower probability of being accepted.
With those schools in mind, make sure to pick schools where your student would be in the top 25% of incoming freshman. Being in the top 25% would make them a top-tier or a very desirable candidate and the schools will often times give more money to those students.
Applying to numerous schools gives you and your student a much greater ability to negotiate financial aid from the school they are most interested in. In addition you never know when your student might be accepted to a “reach school” where the school would have a great deal of money to give.
Finally, it is never a good idea to only apply to one or two schools even if your student is dead set on attending one of them for all the reasons mentions above.
Financial Aid Tips #2 Value your home accurately.
In too many cases families overvalue their homes assuming the value to use is what the home could sale for. Using this method to value your home could potentially cost you thousands in college financial aid.
Schools use a formula to value your home called the “Housing Index Multiplier”. This formula has its basis in your original purchase price and the year you bought your home. Using this figure, calculate the value of your home as if you had to “fire sale” your home or in other words get it sold in 30 days. That value is typically lower than what you would like to sell it for. Using this index appropriately could increase the amount of aid available to you.
Financial Aid Tips #3 Work to set up your income and assets appropriately.
Putting your assets in the right places could have a significant impact on your financial aid based on reducing your EFC (Expected Family Contribution). Making these adjustments are completely legal and ethical.
As an example, one place people put their savings to help pay for college are 529 plans. These can be the worst places you could put your money for your children’s college. Check out a previous article “Are 529 Plans Really Worth It?”
Alternative ideas for asset planning for college are outlined in the article, “Little Known Alternative 529 Plan Stategies.
Financial Aid Tips #4 Do not apply for “Early Decision” if you desire to max out the potential money from each school.
“Early Decision” applications typically lock you into going to that school. BIG MISTAKE! Big mistake if you are trying to pay the least amount out of pocket. The message this sends to the financial aid office at that school is “I’m coming to your school!” Saying that tells the financial aid office to figure how little they can pay you since you have told them you are coming “Early Decision” tells them they have no competition. However, in some cases, “Early Decision” might be a good idea. Families should carefully consider this decision.