Tis the season for worrying about college planning. Visits, applications, essays, it can be dizzying and stressful. Yet, nothing about college stirs anxiety like the question . . . how are we going to pay for it?
The good news is that there is financial aid available to help even high-income families make college more affordable. The bad news is that most families wait until it is too late to understand how the financial aid system works. If you don’t start thinking about financial aid until your child’s senior year and you are sitting down to fill out the Free Application for Federal Student Aid (FAFSA), you have likely missed years of opportunities to put yourself in a better position to obtain financial aid.
When most people think of paying for college, they think about creating and contributing to a savings plan. But there is SO MUCH MORE to it than that. For one thing, the FAFSA form will look at your income from TWO YEARS AGO—not the current year.
It’s important to know that, for better or worse, money moves you make when your child is in middle school can impact your eligibility for financial aid years later, when your child is a senior in high school. We are here to help families make plans that will put them in the best possible financial position to make college as affordable as possible.
When it comes to financial aid and affording college, what you don’t know CAN hurt you. So, here are just a few of the factors/questions that we explore with our clients, as early as their children’s middle school years, to help ensure that their higher education dreams don’t lead to a financial nightmare.
- Do you have a 529 savings plan? How much money is in it?Is it in your name or your child’s name?
- What does the FAFSA consider an asset?
- Does the value of your home factor into financial aid eligibility?
- What is the FAFSA asset protection allowance, how has it changed, and what does it mean for your financial aid eligibility?
- Does FAFSA look at the income of one parent? Or both?
- Can your child earn TOO much money?
- If there is a divorce, are both parent’s incomes considered?
- How does FAFSA look at investments?
- Is a retirement account considered an investment?
- How many children will you have in college at the same time? How does that impact your eligibility for financial aid?
- Is the FAFSA focused more on income or assets?
- Does parents’ age matter?
- Have you sold any stocks in the past two years.
- What is the impact of capital gains on financial aid eligibility?
Learning the answers to ALL of these questions and making moves to maximize your eligibility for financial aid AS SOON AS POSSIBLE can have a significant impact—not only on your ability to pay for college but on your long-term financial security.
So, if you have children who want to go to college . . . Don’t wait. We can help you start your college planning now for a future that will be here before you know it.
Visit our website for more information like this, and reach out to our financial aid and college affordability experts at 610-422-3530 to start your college planning journey today.
