How To Get More Money For College Expenses
Parents are probably wondering now how they are going to pay for all the college education costs they are going to pay for now that their first child is about to leave the nest. They were so excited when the acceptance letters came in the mail but now reality is beginning to set in.
Because of significant budget cuts, many colleges and universities have resorted to raising tuition and other costs and are trimming down aid. Harvard University announced that its fees will go up 3.8% for the 2010-2011 year and will reach $50,000 for the first time. Many other universities are replacing grants with loans in the aid packages of some students.
Even state schools are charging much higher rates this year. Students at the University of California's campuses will be dealing with a 32% rise in tuition and other costs. Federal grants for state schools are running dry and this will result in a significant impact as parents pay even larger tuition increases in 2011. The problem is many families make far too much to make them qualify for aid, but are not wealthy enough to be able to pay for everything out of their pockets.
If parents understand the ins and outs of the financial aid application process though, many of them would be able to put their woes aside. Here are some strategies that families can use to make the kids qualify for more aid.
Talk to the financial aid officer anytime your money situation changes significantly. Ask them to review your aid package. Financial aid officers are allowed to make revisions and adjustments to the aid package if they are able to see a dramatic change in your financial circumstances. If you own your business and have been hit hard by the recession, tell them so. If money is tied up elsewhere and you can't readily free it up, make sure the financial aid officer is aware of it.
If your kid attends a private college, check with the College Board's CSS/Financial Aid Profile. The CSS/Profile considers factors such as home values so if the value of your home has gone down and you document the loss, your child may qualify for more aid. If you are sending other kids to private schools or have gone through serious medical expenses make sure the college is aware of it.
If your child is going to be a junior this school year, pay close attention. The year beginning on January 1 is the most important as far as financial aid is considered. Income that you make during that year will weigh more heavily than any asset in calculating financial aid. Avoid cashing in on capital gains or taking retirement distributions during that year. Try to delay converting an IRA to a Roth IRA.
If you're planning on a significant purchase like a new computer or a car, try doing it sooner rather than later. Most financial aid forms will ask for information about your accounts on the day you accomplish those forms. Try to bring those account balances down.
If you have assets in your child's name, spend them first. Financial aid formulas put heavier weight on student assets than those in the parents' names.