Given the astronomical cost of college, all parents, including
those more wealthy, should consider applying for financial aid.
Note, however, that one misstep can harm your child's
eligibility. The following are pointers to help you avoid mistakes
and maximize aid:
File the Right Forms
Most colleges and universities, and many states, require you to
submit the Free Application for Federal Student Aid (FAFSA) for
need-based assistance. Some schools also require it for merit-based
aid. In addition, a number of institutions require the
CSS/Financial Aid PROFILE® and specific types of aid
may have their own paperwork requirements.
Assume You Qualify
It is difficult to predict whether you will qualify for aid, so
be sure to apply even if you think your net worth is too high. Keep
in mind that you don't need (and shouldn't include) the
value of your principal residence or any qualified retirement
assets on the FAFSA.
Make the Deadlines
Filing deadlines vary by state and institution, so note the
requirements for each school to which your child applies. Some
schools provide assistance to eligible students on a first-come,
first-served basis until funding runs out, so the earlier you
apply, the better. This may require you to complete your income tax
The FAFSA allows you to designate up to 10 schools with which
your application will be shared. Some families list these schools
in order of preference, but there is a risk that schools may use
this information against you. Schools at the top of the list may
conclude that they can offer less aid because your child is eager
to attend. To avoid this result, consider listing schools in
Know Which parent is Responsible
If you are divorced or separated, the FAFSA should be completed
by the parent with whom your child lived for the majority of the
12-month period ending on the date the application is filed. This
is true regardless of which parent claims the child as a dependent
on his or her tax return. The rule provides a significant planning
opportunity if one spouse is substantially wealthier than the
other. For example, if the child lives with the less affluent
spouse for 183 days and with the other spouse for 182 days, the
less affluent spouse would file the FAFSA, improving eligibility
for financial aid.
These are just a few examples of pitfalls to avoid when applying
for financial aid. Talk to your financial advisor about other ways
to finance college.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Supreme Court's decision in Spokeo v. Robins has left counsel for both plaintiffs and defendants arguing that the decision supports their view of the requirement of "concrete and particularized" injury...
The Consumer Financial Protection Bureau's most recent supervisory highlights publication featured issues relating to the Fair Credit Reporting Act, loan originator compensation and in-person debt collection...
On July 28, 2016, the Consumer Financial Protection Bureau released an outline of proposals that it is considering to, in Director Richard Cordray's words, "drastically overhaul the debt collection market".
The United States District Court in Los Angeles ruled that CashCall, Inc. violated the Consumer Financial Protection Act in connection with efforts to collect on certain loans that would have been held void under state law...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).