The 5 Deadliest Mistakes Most Parents When Applying for College Financial Aid

The 5 Deadliest Mistakes Most Parents Make When Applying for College Funding and How to Avoid Them

By Mike Velasco

In this series, I am going to cover five deadliest mistakes that
almost every parent makes when trying to get money for their child's
college education.

If you make any one of these mistakes, it could end up costing you
thousands or even tens of thousands of dollars in lost funding that you
might have been eligible for.

I don't want to see you making these mistakes if you don't have to.
That's why I've decided to devote this “College Tip” to teaching you how
to avoid these common mistakes and make sure you get the maximum amount
of money from every school that your child applies to.

So, without further ado, let's discuss ...

"The 5 Deadliest Mistakes Most Parents Make When Applying for College Funding and How to Avoid Them"

Mistake #1: Most middle and upper-middle class parents assume
they won't be eligible for financial aid because they own a home and
make over $75,000 per year.

Reality: Most families with incomes ranging from $50,000-$150,000 per
year who own homes are eligible for some form of financial aid. There
is over $150 billion available each year from the Federal Government,
the states, colleges and universities and private foundations and
organizations. You just have to know how to get your "fair share."
Unfortunately, most parents give up before they even start and assume
they won't be eligible. This is exactly what the government hopes you
will do so they can keep more of these funds. Don't make this mistake!

If you fall into this category, make sure you apply; you'll probably be eligible for SOME money.

Mistake #2: Focusing your time and energy on a private
scholarship search instead of spending your time trying to qualify for
"need-based" financial aid.

Reality: Private scholarships make up only 2% of the money available
to you to help pay for your child's college education. The other 98%
comes from the Federal Government, the state you live in, and the
colleges and universities your child is applying to. Therefore, you are
much better off spending your time and energy going after the 98%,
rather than spending your time looking for the crumbs! These so-called
"scholarship searches" you read about are normally scams and a complete
waste of money. They charge you an arm and a leg and don't deliver.
However, if you still insist on at least looking for some scholarships,
call my office and we will give you a website that provides a free
scholarship search.

Mistake #3: Assuming only minority students, athletes, and academically gifted students get financial aid.

Reality: Nothing could be further from the truth! "Need-based"
financial aid is solely awarded based on "financial need," which is
calculated by taking the cost of attendance at a school and subtracting
the family contribution (which is the minimum amount the government
feels you can afford to pay based on your income and assets and your
child's income and assets). Whatever is left over after you subtract
these two numbers is your "financial need" or eligibility for financial
aid at a particular school. If you haven't noticed, this has nothing to
do with a student's background, athletic ability, or grades. It's purely
based on this simple formula:

COA (Cost of Attendance) - FC (Family Contribution) = FN (Financial Need)

Mistake #4: Picking colleges and universities without paying
attention to where your student lies in comparison to the rest of the
student body.

Reality: To increase your chances of getting the best possible
financial aid packages, it is imperative that you pick schools where
your child lies in the top 10% of the incoming freshman class with
respect to their GPA and SAT/ACT scores. Although schools give financial
aid based on your calculation of "need" at their school, they will
definitely give preferential packaging (i.e., more FREE money, less
loans) to students who lie in the top 10% of the incoming class. The
reason they do this is to attract the better students to their school.
Use this to your advantage and try to apply only to those schools where
your child would fit into the top 10% category.

Mistake #5: Assuming all schools are created equal and will be able to give you the same amounts of money.

Reality: All schools are not created equal and will not be able to
give you the same financial aid packages. Some schools are well endowed
and get a lot of money from alumni and corporations. These schools have
more money to award and are generally able to meet most or all of a
student's financial need at their school. Other schools, like state
universities, get no private funds and rely solely on state and Federal
funds to help fill a student's need at their school. In many cases,
these schools leave students short and give them less money than they
are eligible to receive. It can actually end up costing you more to send
your child to a "cheaper" school if they don't have the money to meet
your need. It is very important that you know each school's history of
giving money before you ever apply, so you're not blown away when you
get a bad financial aid package from your child's top school choice.

Conclusion:

When it comes to navigating the college financial journey there are
many opportunities and pitfalls for obtaining or losing funding for your
child. A good college financial planner can help you to maximize the
aid available to your child while protecting your income and assets.

College is an expensive business, but when you know how to play the
game you can finish as a winner! To help you get started, Red Oak
College Financial Planning offers a free one-hour consultation where you
will discover:

• Your Expected Family Contribution (EFC): What colleges expect your family to be able to contribute towards tuition (this is different for every family).
• A proper evaluation of your home: Assigning the wrong value could decrease your chance for merit aid and scholarships.
• Your asset protection allowance: The amount of assets you can rightfully exclude from your FAFSA application.
• Any opportunities to reposition your assets and income (to help reduce your EFC).

To schedule your free session, please contact us at: mike.velasco@redoakcollegeplanning.com or 908-758-1322.

Please visit our website to learn more about College Financial Planning : http://redoakcollegeplanning.com/

About Red Oak College Planning

Red Oak College Planning is located in Basking Ridge , N.J. and is
owned by Mike Velasco. Mike has over 30 years of experience in the
financial services industry, and he has expertise in college financial
planning, retirement planning and protecting families. His firm, Red Oak
College Planning, is affiliated with the College Planning Network
("CPN"), and together they have helped numerous parents successfully
navigate the college admissions and financial aid process so they can
comfortably afford to send their children to college... regardless of
the cost.

CPN is the Nation's largest and most reputable college admissions
and financial aid servicing center and has averaged nearly $19,075 per
year in college aid for its average family and nearly $4,900 in
financial aid award appeals.