It’s financial aid season!
If you have a child heading to college next fall, you can complete the Free Application for Federal Financial Aid (FAFSA) or the CSS Profile now!
Whether you’re filing this year or are curious about what lies ahead, I have written two helpful articles that explore important financial aid topics. (I wrote both of these articles for my college column at Cappex.)
Story No. 1: Maximizing financial aid and mistakes
Parents can inadvertently get into trouble when they pursue ways to maximize their financial aid chances.
This is the time of year when I tend to hear from parents contemplating “icky” and/or incredibly stupid ways to boost their aid eligibility.
In the article below, I include some common mistakes that parents make when trying to boost their eligibility for financial aid.
Two of the examples in the story came from parents, who are enrolled in my online course, who reached out to me just this month with their tentative plans.
One dad, an engineer, had decided to cut back on his hours at work, in hopes of qualifying for more financial aid. To compensate for the lost income, the father was going to pull equity out of his house and potentially tap into his Roth IRA. I explain in the article why I thought that was a really bad idea.
Another dad told me that he had been advised to hide his assets or spend them down. He wondered what I thought of the idea.
Hiding assets is something that parents can hear about from insurance agents and financial professionals who aim to pocket commissions by selling parents annuities and life insurance.
Just today I read an email from a mom who told me that speakers at her school routinely advise parents to hide their assets. High school counselors don’t know enough to keep these folks off their campuses!
Story No. 2: Financial Aid Application Fundamentals
In my second article, you’ll find answers to common questions about the FAFSA and the Profile.