Parents often fumble on financial aid forms
High school seniors have been scrambling for months to complete their applications for college. Now it's their parents' turn to sweat.
The start of the year marks the launch of financial aid season, when parents fill out exhaustively detailed forms in an effort to get their share of the billions of dollars of assistance available. Unfortunately, aid forms can be every bit as unnerving as college applications. Missteps can cost thousands.
Here are some tips to avoiding the most common mistakes parents make when filling out financial aid forms:
Buckle down and apply
It doesn't matter how much you earn or whether your educational aspirations are modest or grand: If you have a child attending college next fall, you and your student should fill out the Free Application for Federal Student Aid now. The FAFSA is the first step in getting money from all types of government and school programs as well as many kinds of private scholarships. (Some private colleges also require a second aid form known as the CSS Profile.)
"Every student should be filling out the federal financial aid form," said Robert Shireman, executive director of the Project on Student Debt in Berkeley.
The problem is that the FAFSA makes a tax return seem like a breeze, so if you think you aren't likely to be eligible for aid you might be reluctant to go through the hassle. That would be a mistake.
This year, a number of pricey private colleges have changed their aid rules to provide more money to better-heeled students, Shireman said. The federal government also revamped the Higher Education Act, boosting scholarship amounts for needy students.
And it's important to note that a family's need is based on a complicated formula that takes into account a host of factors, including several that are bound to change, such as the parents' age. One small difference -- such as sending a second child to college -- can have a dramatic effect on how much aid you qualify for.
So, too, can changes in the value of your investments, because they affect the calculation of your net worth. For example, the stock market's recent dive could help you when aid is doled out.
"If a family doesn't get anything in the first year, they give up," said Reecy Aresty, a financial aid counselor in Boca Raton, Fla. "They figure they won't qualify, so why bother? But what happens in one year is not necessarily an indication of what will happen in subsequent years."
