10 Financial Aid Strategies For Families Who Think They Can’t Qualify

Many “Forgotten Middle Class” families have no idea how the college financial aid process works.  They needlessly leave thousands – or tens of thousands – of dollars on the table each year in terms of lost eligibility for grants and scholarships that they could have qualified for. This article highlights 10 little known facts about college funding so that you can qualify for the maximum available to your family.

  1. Some types of savings penalize you more than others.  Strangely, the advice you may have received from your accountant or “financial guy” about where to save may actually have sabotaged your chances of qualifying. Many families discover, after it’s too late, that they should not have saved money in their children’s names, for example.
  2. Some types of savings are entirely exempt.  Each year, I personally learn of scores of families who shot themselves in the foot by disclosing assets on the financial aid forms that should not have been disclosed.  Example:  retirement accounts do not fall under the definition of “investment” for purposes of the FAFSA (one of the two main financial aid forms) and should not be listed, or you will lose eligibility for grants and some scholarships.
  3. Colleges negotiate.  Although they are technically non-profit institutions of higher education, colleges are very much in business. (Ever look at the amenities they offer their students? Rock climbing walls?  Lazy rivers? C’mon!). Therefore, they do not always give their “highest and best” offer when they issue financial aid.  You might be able to get them to increase their offer, especially if you have other offers from competitor colleges.
  4. Expensive private colleges could actually cost less than so-called “cheaper” public universities.  I know, I know, this is counter-intuitive.  But private colleges give more because they have more – endowment funds.  Public colleges generally rely on their respective state governments and the federal government for their scholarship and grant awards, so they have less to give because budgets have been cut across the board.
  5. At any given college, roughly 25% pay full price.  The technical term for this group is “Suckers!”  Most of the families at any given school receive aid.  As a highly paid professional college consultant I recommend you try to get into the 75% group! 🙂
  6. Private colleges “bribe” kids they want to attend.  According to the National Association of Collegiate Business Officers, the average discount is 46.3%.  Average!  
  7. Rank is easily manipulated.  There have been numerous shocking stories over the years about how colleges manufactured their high rank in US News and World Report, by both legal and illegal means!  Google “Emory ranking scandal” or “How Northeastern gamed the rankings” if you have a strong stomach.  Either way, do not apply only to high ranked, “Rear Window Sticker” schools because you assume that they are somehow better.
  8. The college financial aid rules change all the time. In September, the Department of Education revised their regulations. Starting in 2017, a family filling out the FAFSA must provide two years’ worth of income tax information, compared to only one under the current system.  The department made other important changes relating to filing date and whether other colleges can see where you are applying
  9. 53% of eligible families do not apply.  I have seen that statistic for years, but never a solid source.  (Other than the Internet of course!) Nonetheless, I believe it to be basically true, because most six-figure earning families that I consult with are stunned that they can receive anything!  Everyone should apply for financial aid, even if their neighbor or know-it-all sister in law (the one whose daughter is ED’ing to Penn) give you unsolicited advice to the contrary.  After all, did SHE write a best-selling book on financial aid?  Seriously, does she know how the financial aid rules work, how much you earn, what you have saved, etc.?
  10. The biggest mistake families commit is starting too late in the process.  By the time your child hits senior year of high school, many options that you had in 10th or 11th grade may no longer be available.  The college process is like a train, it leaves the station whether or not you are “ready.”  Start your college planning early!

Below is a webcast from earlier this year that gives more detail on how the whole system works!

I hope you found this post to be helpful.