My lessons learned from college financial aid?
No one pays the full amount, except for Bill Gates’ kids.
Do not have savings in the childrens’ names. It is taken right off the top before financial aid is calculated
Do not contribute to 529’s. It also is taken right off the top before financial aid is considered.
Or, in some states, after child is accepted at college and financial aid is calculated, open a 529 and put the maximum amount in. Withdraw it the next day to pay for college expenses. You still get the state tax deduction.
Assets, such as primary home, are less important, vs. W-2 income, which should be minimized.
Like most things the Gov’t does, its anti-family - its better off if you are divorced. Child can go with the spouse who has lowest income for FAFSA calculation
Now that the Gov’t controls education, financial aid and higher-education is like welfare, medicaid and foodstamps - the prudent and conservative pay more. Scammers pay less.
FAFSA and Direct Loans are the collegiate collective farm, comrade. And they are just government rip-offs.
Damn, you learned that the hard way too! I also found out that there is a huge difference in tuition between colleges in the east (where we live) and in the midwest and west. One year in Virginia, even in a modest conservative college, was more than double what we paid for the same thing in Idaho.
Yeah, it is hard having the kids that far away, but you can buy a lot of airline tickets for the difference in tuition. After the first year, we gave them very little help. With the greatly lowered tuition rate, they didn't need it.
All graduated with less than 20K in loan debt. Not fun, but manageable since they actually learned marketable skills.
Exactly. Minimize any money that is in your child's name. The FAFSA process will consider that ALL of it is to be used for tuition.
Instead, take the money that you would have used to put in a 529 account, and use it to pay down your mortgage. Equity in your home is NOT considered in the FAFSA process. Read the FAFSA calculation document(available online). If your house is paid off, then max out your 401K contributions in the years leading up to your kid going to college.
Part of the problem with colleges is the lack of transparency in prices so that people can compare prices. The other problem is the treatment of college as a wealth transfer method - charging people based on income by subsidizing the “poor”, pretty much all of them. The third failing is the introduction of social engineering and political correctness, essentially charging whites and Asians more to subsidize the less capable minorities.
1. Not all universities take the full amount of 529 savings off the top in calculating “expected financial contribution.”
2. The income of the non-custodial parent is included in financial-aid calculations.
Nevertheless, it is shocking how much middle-class families are expected to pay toward college costs, and how little of the total assistance distributed is in the form of merit-based aid.