Financial Aid Tips from WACAC

Knowledge is power. We've all heard that before, but it rings especially true when it comes to financing your college education. Especially in today's market, it's all about knowing the rules of the game, in this case the Financial Aid game. Here's some tips I picked up to lower your effective family contribution (EFC) from Fox College Funding:

1. If you have more than one student in college, note that! This will lower how much you have to pay for your most recent high school graduate.

2. Note the differences between FAFSA and CSS profile forms. They have different rules and apply different percentages to assets, income, and other financial data.

3. Assets should be reported with a 30-day "quick-sale" value - net of selling fees and taxes.

4. Custodial accounts can be reduced by reimbursing parents for expenses paid on the child's behalf.

5. For divorced families, FAFSA does not take non-custodial parent's financial info into account - for these purposes, custody is defined as the parent with whom the child lives (physically, not legally) the majority of the year.

6. If your first letter is denied, be sure to appeal in writing - from the student - and follow up in person (or over the phone). Other special appeal circumstances: change of employment, excessive debt or medical bills, private K-12 tuition, and supporting other family members. Appeal to other schools, and do some more homework: Check out FinAid!

7. If you can save for college, fill out Section 529 Plans. These are tax-advantaged tuition-savings plan sponsored by the state, state agencies, and educational institutions. For 2009-10 school year, it's counted as an asset.

8. PLUS loans are not financial aid gifts - these are awarded through the federal government - don't get fooled by seeing this on your award letter. (Standardized forms & awards letters coming soon!)

9. Federal Loan rates:

• Direct loans:
• Stafford - 6.8% fixed
• Perkins - 5% fixed
• PLUS - 7.9%

• FFELP loans:
• Stafford - 6.8% fixed
• PLUS - 8.5% fixed

• Military:
• 6% interest rate for borrowers in military

10. Apply for local and regional private scholarships: clubs, foundations, service groups, corporations, banks, individuals, etc. Many are merit-based and awarded to specific ethnicity groups and fields of study. Over $100 million in private scholarship money was not given away last year because students didn't know they were out there!

11. American Opportunity Tax Credit - up to $2500 paid on tuition and school costs can be tax-deductible, thanks to the Obama Administration.

12. Tax saving opportunities for high income families: Gifting, shifting income, and shifting assets.