How To Survive "The College Funding Maze!"

DID YOU KNOW...   COLLEGE COSTS HAVE BECOME THE "2nd LARGEST DEBT" IN AMERICAN SOCIETY TODAY?

Congress has correctly referred to it as "A CRISIS OF MAJOR PROPORTIONS."  As the cost of college continues to skyrocket and the financial aid dollars continue to dwindle, it has become more and more difficult for parents to get some kind of financial assistance. While there is more than $143 billion dollars available, only those parents who can understand the college funding process and use that knowledge to their advantage are going to receive the maximum amount of money possible. It is not uncommon for low income families who have assets in the wrong place to lose out on financial aid. And, it's not uncommon for families who make over $100,000 per year in income to receive some form of financial assistance. The real difference is their understanding of the process and what they need to do to position themselves to double, or even triple, their eligibility for aid.

You see, as more and more students enter college, the financial aid offices of these colleges are being forced to use their limited financial resources to attract the strongest applicants or to save their government-funded resources for the most needy. The strongest applicants and the most needy typically end up winning at the college funding process. However, like I said before, you can have a low income ($25,000 per year) and still NOT receive any assistance. It depends on a lot of things...things most parents aren't aware of.


FOR EXAMPLE:   I had a widowed mother of 3 children who asked for my help recently. She earned $28,937 for the year, and amount low enough to receive government financial assistance. However, she had one MAJOR PROBLEM! She had over $300,000 in assets from a life insurance settlement that was paid out when her husband passed away 7 years ago. According to the FAFSA, those assets would have completely eliminated her from receiving free government assistance. By simply repositioning those assets about a year before we filled out the FAFSA, she was able to qualify for more than $10,000 worth of FREE MONEY PER YEAR - money her child didn't have to pay back. That's more than $40,000 over a four year period of time. Then, triple that! Because she had 2 other children going to college right after the first child!

TODAY, PARENTS ARE FORCED INTO BEING "STRATEGIC"!  Government assistance is NOT welfare money, it's YOUR MONEY! For every dollar you give to Uncle Sam in taxes, you give a portion of that money to the educational system. And, over time you've put a lot of money into the system. The question is, would you rather give that money to someone else, or do you want to use it for your children?

I had one person at a seminar tell me they had rather give that money to a poor family. That's fine, but when their Social Security wages start to pay out are they going to ask the government to give that monthly paycheck to someone else who needs it more than they do? I think not!! People want something for their money. If you don't qualify, it does go to another family who does qualify. But, if you qualify for some money (or even a lot of money) wouldn't you like to be the recipient of what you legally, morally, and ethically qualify for?

Whether or not a family has enough savings or income to pay for college, if at all possible, most families would like to avoid paying the full price. Many families are unaware that proactive college funding planning may dramatically lower their overall college expenses by tens of thousands of dollars. There are dozens of simple strategies, academic strategies, and financial and tax strategies that can be utilized to accomplish this result. Simply put...understanding the college funding process is the beginning stages to understanding the many ways you can save money and lower the overall cost of a four-year college education.

1) GET YOUR "PIN" NUMBER FROM WWW.PIN.ED.GOV.   Whether you're a junior or senior in high school, go to www.pin.ed.gov and fill out the application to receive your federal PIN number. This number identifies you and acts as a security measure when you electronically sign the FAFSA form. You will be given the option to choose your four-digit pin number or let the computer randomly choose one for you. The student and one parent each must have a PIN number. This will allow both of you to apply your electronic signature to your FAFSA form. If you're an "independent student" (age 24 and over, married, have a child, a veteran, or declared a ward of the state) you don't need your parent's to sign up for one. Once you receive or choose your pin number, file it away in a safe place. You'll need to use that same PIN number all the way through college. If you do lose it, you can get another one by simply filling out the application again.

2)GIVE PRIORITY TO ACT/SAT SCORES OVER SCHOOL GRADE POINT AVERAGES!  Admissions, scholarships, and grants are primarily based on the scores your student receives from these tests. They may have a 4.0 GPA in high school, but if they have a low score on the ACT or SAT, their chances of getting scholarships or grants is slim to nothing. Colleges place a high priority on the results stemming from these nationally-standardized tests. Many students think that a good GPA is all they need...not true! However, many schools will combine your ACT/SAT scores with your GPA and then get an average. And, others will combine your ACT/SAT scores with your GPA and class rank to get an average. From those averages, they will determine if you are eligible to receive their scholarships and grants, AND whether or not you are eligible for admission into the school. Many 4.0 students are locked out of great schools and ineligible for scholarships because of lower-than-expected ACT/SAT scores.

- It is recommended that you take the test 3 times. This will maximize your opportunities to receive a higher score. My son's scores jumped by 4 points on his second test which gave him a much better scholarship position. I've seen scores jump 10 points between tests. The colleges will only look at the highest score. They can care less if you scored lousy on one test and then great on the next. Give yourself an opportunity to earn more FREE money for college by studying for these tests, taking practice tests, being rested and clear-headed when you take these tests, and taking them more than once!

3) Find Yourself! The next all-important thing to do is to figure out the following:

- What kind of career are you interested in?
- What kind of school do you want to attend? In-state or out-of state? Rural or city? Large or small? With sports or without? Etc.
- Will your career be available in the future? How much will it earn you? Can you get a job right away?
- Will you work while at college? Where? Doing what? How many hours?

I would recommend that you do a personality test that offers career matches based on your personality. More than 80% of college students change their majors during college which adds more debt that you'll have to eventually pay back!

4) Visit Campuses During School! Every college student will tell you that the best way to get a feel for the college is to visit while classes are going on. Don't visit during the summer, the campus is dead! And, don't wait until spring of your senior year to visit either! It presents too much pressure on you when you do that. Plan to visit during the week and stay a couple of days if you can. Plan to visit during the spring of your junior year or the fall of your senior year. Take notes while your there! Go to our website and print out the form for this, it will help you! It's amazing what you'll forget after you leave the campus. The form allows you to organize your thoughts and maximize your visit so that you know for sure if that college is right for you.

5) Apply For College Admittance and Scholarships EARLY! Many colleges have moved their application and scholarship deadlines to the fall of your student's senior year in high school. They want you to make your decision early! Many students miss critical deadlines and lose out on scholarships they could have had by simply being too lazy to conform to the deadlines. Know the school's application deadline and their scholarship deadlines.

6) Do Pre-FAFSA Planning! The FAFSA (Free Application For Federal Student Aid) is a form made available from the U.S. Department of Education which allows you to apply for federal funding. What you put on the FAFSA determines what you get or don't get. By doing some pre-planning, you may be able to improve your EFC (Expected Family Income - what the college will expect you to pay before they will offer any financial assistance) and thus improve your opportunity for federal, state, and/or institutional funding.

7)Complete The FAFSA! The FAFSA (Free Application For Federal Student Aid) is an application made available from the U.S. Department of Education to college-bound students. It is an application that is made available (online and in hard copy form) after January 1 for the purposes of determining financial aid for the upcoming college year. For example, a FAFSA made available on January 1, 2009 is for the school year running from August 2009 to July 2010.

- It is required to be filled out by ALL students for all government-recognized colleges and universities. If anyone tells you that you make too much money to fill out the FAFSA, ignore them! They aren't college funding experts! Even if you don't qualify for FREE money, you still may qualify for low-interest government loans. I can't tell you how many wealthy parents wished they would have filled out the FAFSA and allowed their children to share some of the costs associated with college, especially after they drop out, or selfishly choose an expensive school, or even use their college years to play around and have fun.

- It can appear as a complicated and time-consuming process since it requires your personal information, financial statements, and tax information. Under the Obama administration, they are attempting to simplify the form due to the many complaints it has received over the years. Even, one congresswoman working with the U.S. Department of Education argued that it takes a Ph.D. to figure it out.

CAUTION: Before you fill out the FAFSA, you'll definitely want to do some financial and tax planning. The reason for this is because once you've filled out the FAFSA form, the school will calculate your award letter based on the personal and financial information you put on the FAFSA! Listen....if you will simply take the initiative to learn what the FAFSA requires and how your EFC (Expected Family Contribution) is calculated based on the information you provide, you will stand a better chance in understanding how your assets and income relate to the amount of financial assistance or scholarships you will receive. We'll talk more about this later.

8)Complete The CSS Profile! This form is required by approximately 600 schools, and you must register for this form and fill out the application in the FALL of your senior year in high school. Each school will have it's own deadline - which is usually around November 1. The CSS Profile is at least 25 pages thick and requires a lot of information. If you do this form online, prepare to spend some time on the computer.

CAUTION: The information you put on the CSS Profile in the fall needs to match the information you're going to put on the FAFSA after January 1st. This means you're going to have to pre-tax planning and figure out what your taxes and financial arrangements are going to look like BEFORE the end of the year! This takes some time and effort, but it can save you a lot of money down the road!

To register, you must contact College Board at 800-778-6888 or online. An advantage to the online process is that you can complete the registration form and application form at the same time - no waiting. The online application automatically includes all questions required by your designated schools

Unlike the FAFSA, the CSS Profile is NOT free! It costs about $16 per school where you want the information sent. First-time college applicants from families with very low income can apply for a fee waiver.

9) Receive and Review Your Student Aid Report! Once you've completed your FAFSA and submitted it to the U.S. Department of Education, you receive a Student Aid Report within a few days. The Student Aid Report calculates your EFC (Expected Family Contribution - what your family will be required to pay before the college will kick in any financial help). In fact, once you submit your FAFSA, the confirmation page of the FAFSA will show you your EFC, however the Student Aid Report is a report each college you selected will receive. This shows each of them how financially strong or weak you are. From this information, the colleges will then formulate a plan on how much they are willing and able to give you.

10) Fill Out Verification Forms! If you qualify for federal grants (such as the Pell grant), you may be required to fill out the school's verification forms. These are additional forms you must fill out and they must match your FAFSA form.

11) Institutional Forms! If you have a business or farm or have been divorced or separated, you may be required to fill out some additional forms form the school. Make sure this information matches the FAFSA information as well.

12) Followup, Followup, Followup! Don't ever assume anything in college funding. I can't tell you how many times my clients have complained because a school never received their Student Aid Report or Verification Form or a copy of their taxes. Colleges are notorious for losing things! If you submit anything by fax, mail, email, etc. to a college...followup and make SURE they received it, get the person's name you talked to and write it down.

13) Award Letters! Each college you applied for will offer you an award letter. The award letter tells you what they're willing to offer you based on the information you gave them. I recommend that you always accept the award but attempt to negotiate with the school if you can. Make sure they have based the award letter on your highest ACT/SAT score and the latest and most correct information you have.

14) Make Sure College Bills Are Accurate! As a board member of a local college, this was one of the our frustrations - making sure that the billing was accurate! A dear friend of mine sent 3 kids to 3 different colleges in which not one bill was correct. Don't just pay the bill, make sure it's correct, ask questions, see if you can get an adjustment.