How to get a better financial aid packageCollege costs have become an enormous outlay for every family, and they seem to rise by larger amounts every year.
Editor’s note: The following money management column on personal finance is prepared and distributed by certified public accountants.
College costs have become an enormous outlay for every family, and they seem to rise by larger amounts every year.
In fact, tuition and fees at private four-year colleges jumped 5.9 percent last year, according to the College Board, and they rose 6.4 percent at public four-year colleges.
Many families rely on financial aid to help them cover some or all of the costs of higher education. The Minnesota Society of CPAs (MNCPA) advises that there are several steps families can take to be sure they get the most aid possible.
Most families use the Free Application for Federal Student Aid (FAFSA) to apply for the money they need. The form is typically not due until June, but many colleges that rely on the form have their own deadlines that fall earlier in the year. In order to ensure that your request is considered on a timely basis, be careful to apply early in the year, and at least no later than your chosen schools’ own deadlines.
Get it right
This may seem obvious, but the first best step for ensuring fair consideration for your financial aid request is to make certain that you read the directions on the form(s) carefully and that you enter all your information correctly as requested. Any errors could cause delays or otherwise hinder the process. When you’re finished, be sure to sign the form and keep a copy for your own records.
Schools often base their financial aid awards on a family’s most recent tax return. In this uncertain economy, however, that return, which covers last year’s income, may no longer reflect your current financial situation. If one parent has lost a job or if you have suffered a similar economic hardship, write the college financial aid office to let them know exactly where you stand today. (Send this letter separate from the FAFSA form, which should be submitted on its own.) The school may ask you to document the problem, so be prepared to do so. If you don’t tell the school about your current situation, they won’t take it into account in calculating aid.
Don’t give up
After you receive the details of the financial aid package the school is offering, you may find that it is not enough to cover your child’s total expenses. There’s no reason to give up hope. It’s a good idea for the student to contact the financial aid office and explain exactly what he or she needs and ask for additional aid. As part of this conversation with the financial aid office, it is appropriate to mention more generous offers you’ve received from other schools. The financial aid office may ask you to fax copies of these offers to them. After consideration, they may be able to offer additional aid if, for example, other candidates who were offered aid decide to go to school elsewhere. Of course, there’s no guarantee that the college will raise its offer, but it’s worth making your case.
Consult your CPA
Applying for financial aid can be a confusing and frustrating process, but remember that you don’t have to go it alone. Your local CPA can offer advice on college planning and financing as well as any other financial concerns facing your family. Turn to him or her whenever you need expert advice on managing your money.
Information and resources are available to the public on the MNCPA website www.mncpa.org/information and at MyTaxTime.com including tax and financial planning information for individuals and small businesses.
A free CPA referral service is also available on the website or by calling 1-800-331-4288. The MNCPA is part of the national 360 Degrees of Financial Literacy campaign to help Americans improve financial literacy; information and resources are available at www.mncpa.org/360.