Paying for college education can be an intimidating task, even more due to the ballooning tuition expenses. Not only would you have to deal with huge amounts of money but you also have to go through the complex process of decision-making. This task is often thrust upon 17 years old who may not have had any prior experience of handling money. What adds to the confusion is that parents often feel that they’re faced with the subtle intricacies of covering hefty college costs and hence they feel that this journey is ripe enough for committing possible mistakes.
We have listed down few of the things which we bet you didn’t know about college financial aid and about college expenses. Here’s some food for knowledge!
- All college applicants should fill the FAFSA every year
The FAFSA, short form of Free Application for Federal Student Aid is similar to a golden ticket. It is something which the government aided schools take into account to decide how much money to lend to a college-bound student. Keep filling this even when you think you won’t qualify for the funds. If your elder child goes to college and you don’t receive anything, you might not bother for the next year. But little do you know that the financial aid formulas are indeed complex and there are many things that can change from one year to another which can set an impact on the eligibility of financial aid.
- The sooner you send your FAFSA, the better chances are for you
The form which is received on the 2nd or 3rd of January every year should be quickly filled out by the students. The sooner you fill out, you can move to the front of the line thereby grabbing the first piece of the financial aid. During the initial part of the financial aid season, there is definitely more money to disburse and therefore you have to be organized. In case your name is not at the front of the line, you’ll have to be a better student to receive the same amount of money.
- 529 College savings plans are state-sponsored
Did you know that the 529 plans are sponsored by the state and are particularly crucial for college savings as the funds that you withdraw for tuition and other reasons are tax-free? Such accounts are generally deemed to be assets for parents and they do minimum damage to the application of aid. 529 plans which are there in the name of grandparents are neither the parent’s nor the child’s assets but 50% of the withdrawal for meeting college payments can be considered as student’s assets. Hence it is advised to the grandparents that they transfer the account to the names of parents before starting withdrawing money.
Therefore, if you’re a college student who is eager to stay on top of your finances, you should first know what is what. For college financial aid application, take into notice the above mentioned facts so that the lenders don’t dodge you.