College Planning: 6 New Year’s Resolutions That Lower Your College Tuition
Is one of your New Year’s resolutions to save money on college tuition? If so, you can lower your college tuition by implementing one or more of the following tips:
1. E-file your FAFSA. On the first day of the year, the FAFSA, or the Free Application for Federal Student Aid, becomes available. The early bird gets the worm because college financial aid is awarded on a first-come, first-served basis. E-filing saves time and lets you submit the application early. Plus, it’s easy to make corrections. (Don’t worry if you haven’t completed your 2010 income taxes yet. You can file your FAFSA based on estimates and make changes later if necessary.)
2. Update the financial aid office. If the information on your FAFSA form is inaccurate, especially your income, notify the school’s financial aid department. Situations such as sudden unemployment and medical expenses must be reported in order for the FAFSA to be adjusted accordingly.
3. Collect “tax scholarships.” Families and students can take advantage of tax breaks for educational expenses. Middle-income and low-income families collect American Opportunity tax credits amounting to as much as $2,500. Even families who don’t pay a cent in taxes can still receive checks from the government. If you wish to try for a tax deduction, you should wait until February to file because the IRS still has to program the new deductions into their database.
4. Learn the financial aid rules. Whether it’s fair or not, it’s not necessarily the people who deserve the most who get the most college financial aid. It’s the ones who understand the system who get the most college aid. The financial aid rules are complicated and sometimes convoluted. If you don’t have the time to study and learn them, seek out a qualified college planning advisor. They can pay for themselves many times over.
5. Set a budget. Parents need to be realistic, especially when they have kids going off to college. They must sit them down and tell them how much they can afford to pay. It’s better to select a school based on the budget, than to try to figure out how to finance the tuition after the fact. By integrating the financial budget, the choice of college is more feasible. Also, there can be a big discrepancy in how various colleges and universities award need aid. You want to find the schools that have a track record for meeting 100% of demonstrated need, and meeting that need with grants (free money) instead of loans.
6. Save today. It’s never too late to put portions of your monthly salary away for future use. Even if it is late in the game, you can still save for college. Remember that every dollar you save is worth two dollars that you won’t have to borrow. There are various efficient and painless way to save for college. Consider all your options.
Seek the guidance of a college financial aid counselor for ways on how you can get more financial aid assistance. You can also encourage your child to do better in his classes or beef up his credentials by participating in different extra-curricular activities. In that way, it will be easier to attract more college financial aid.