Saving Money is NOT just Financial Aid
Applying for financial aid is just one way to save tuition dollars. It is not the only way. Many people focus only on the FAFSA and the Expected Family Contribution (EFC) process when trying to pay for college. Properly using the combination of the financial aid process, college saving plans, education tax strategies and various financing options can save thousands of dollars over your education years.
Understanding the college merit policy and how your financial aid position will change will be an important part of the schools you are considering. It is normally recommended that a student apply to a few schools in which you are in the upper 20% of the applicant pool for that school. By applying to these schools you will improve your opportunities for merit based aid. Here is where the hard work of good grades, academic difficulty, and extra activities can have a significant impact on the cost of education. Depending on the school merit money is available even if you do not qualify for need based financial aid.
Not easily available is the need based policy for the each college. This can be subjective but each school has a historical average. Knowing this information helps you create a proper college financial plan. It is also helps with appealing the college award letters.
The sequence of using various strategies is critical and the reason why a four year cash flow needs to be done. The definition of qualified education expenses varies by each strategy. You must remember that multiple qualified education expenses cannot be used for multiple tax advantages. Good record keeping will be required to maximize your savings. The colleges issue a tax document with some of the expenses.
You need to remember due to the increased complexity that the college financial aid offices will be limited in the information they can provide to you.
Many of these strategies can lower your cost no matter if you qualify for need based financial aid or not. These strategies can be used for both high and middle income people to lower your out of pocket cost of education.