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Financial Aid: How to Get More

Guest post by: Catherine Avery

Article Overview: Despite drastically rising tuition rates,there are a number of short and long-term strategies that parents can use to qualify for more aid.

Financial Aid: How to Get More

Across the nation colleges are feeling the financial crunch. As a result most are drastically raising tuition, according to a recent Wall Street Journal article entitled: 'Financial Aid 101: How to Get More.' This year, for example, Harvard University announced its tuition, fees and board would increase by 3.8% for the 2010-2011 year, exceeding $50,000 for the first time. Even many state schools, traditionally far cheaper than private schools, are imposing significantly steeper hikes in percentage terms.

All of which makes a tough situation tougher for families who are too affluent to quality for financial aid but not wealthy enough to pay out of pocket.

Fortunately, according to this same article, there are a number of short and long-term strategies that parents can use to qualify for more aid. Here, in a nutshell, are some of the do's and don'ts:

DO's

1. Save in investment accounts listed in a parent's name, such as 529 college savings plans, since up to 5.65% of such assets are assessed under federal aid formulas

2. Minimize capital gains and accelerate necessary expenses such as a car or tax bill in the calendar year before your child starts college and, if possible, during the college years.

3. Notify financial aid officers about changes in your financial circumstances, such as a recent job loss or home devaluation.

4. Reduce available cash in your bank accounts to pay down consumer loans like credit card balance since these kinds of debts aren't included in aid formulas.

5. Contribute to retirement accounts as much as possible before your child's college years since the money isn't included in aid formulas.

DON'Ts

1. Save in your child's name as student assets such as those in custodial accounts, can be assessed up to 20% under federal aid formulas.

2. Inflate your income with bonuses and retirement distributions during those years.

3. Go into the aid office without the proper documentation to back up your claims.

4. Pay for college with unsecured debt, such as personal loans, since such loans are not subtracted from your assets under aid formulas

5. Withdraw money from your retirement fund to pay for college since distributions will raise your income, potentially reducing aid eligibility.

Copyright 2010, CAIM LLC

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Article Tags: financial aid, parents
Referred by: http://elliacommunications.com



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