Applying to college and then trying figure out which college you are going to attend should be the hard part of starting your college career. But many make the mistake of letting financial aid be the hardest part. The world of financial aid is a big one and at times has some complexities to it. Below are five common financial aid mistakes to avoid. Doing so will allow you to take some of the stress out of paying for college.
You can file the Free Application for Federal Student Aid (FAFSA) at any time you want as there is no deadline. So while you make put off filling out the form, other financial aid programs along with the college’s themselves do have deadlines. Make sure you are aware of when these deadlines are. You don’t want to lose out on free money simply because you didn’t file the FAFSA in time.
Providing Wrong Tax Figures
When filling out the FAFSA, make certain you use the federal income tax that you paid, not what was reported on your W-2. Filing with what was reported on your W-2 will inflate your earnings, which could cost you on getting more money for college.
Sometimes, parents will fill out the FAFSA and note that they have a higher level of education than they really do. There is no reason to put down a higher level of education than you completed. Not only is it being dishonest, but it could cost you. Some schools will provide more money to first generation college students than others. Again, this is not to say you should select “High School” if you have a master’s degree. Be honest.
Including Retirement Assets
When it comes to looking at the assets one can use to help pay for college, many filling out the FAFSA will include their retirement assets. The form is only interested in your non-retirement assets. As I pointed out in my previous post, colleges believe that retirement assets will go towards retirement, not education and therefore are not interested in them. This is why parents closer to retirement age get a bigger break on the family contribution calculation than younger parents. Including your retirement assets could cost you in the form of a smaller financial aid award.
Not Appealing an Award
Not many are aware of this, but when you receive a financial aid award, you can appeal it. You simply need to ask the college to reconsider. They may ask for more information, so be prepared. I personally had this happen to me. My father works for a company that files its taxes as an S-Corporation. This means that the business passes all of its income to the shareholders. So, even though my father might have earned a $60,000 salary, his taxes show him making a couple hundred thousand. My financial aid award was small but after showing the college this, they increased my aid package.
There are many mistakes one can make when filing for financial aid. Don’t make the process harder and more complicated than it is needs to be by incorrectly filling out the forms or providing the wrong information. In the event that you are completely lost and need help, there are people out there that will help you complete the financial aid applications correctly. By filling out the forms correctly, you increase your odds of getting the best financial aid package for your situation. And remember, if it is lower than expected, appeal.