Soaring student debt is a hot topic. The average debt of a senior graduating from college is nearly $38,000. Student loan debt has reached an estimated $1.56 trillion in the United States. That figure is even more frightening when you consider that many families are able to send their children to state universities and incur no debt at all, so for the average debt to be nearly $38,000 means that there are thousands of students graduating with over $100,000 in loan debt.
Yes, the financial aid forms can be intimidating, but here are a few tips to help you avoid the most common mistakes.
1. Not filling out the FAFSA
The FAFSA is the trigger to financial aid. It may not be surprising, but the single biggest mistake is not filling out the forms because you assume you won't receive any aid.
Scholarship Advisors (myscholarshipadvisors.com) conducted a survey among families with high school seniors and found that 53 percent of eligible families didn't bother applying for aid through the FAFSA. This can be a very costly mistake.
Many institutions, and especially private colleges and universities with the highest price tags, offer generous merit-based aid. These packages aren't based on financial need, but rather on talent and future potential for impact on the college campus. Many schools award these automatically based on GPA, rank in class, test scores, etc., while some schools require students to complete scholarship applications.
2. Careless errors and omissions
It has been reported that more than 80 percent of submitted FAFSAs contain at least one error. One example is that money in a retirement account WON'T count against you, but money in a checking account WILL. This difference can obviously have a huge impact on your final Expected Family Contribution (EFC). Also, make sure to fill in all the fields of the form. If a question doesn't apply to you, fill in with a "0" or "not applicable."
3. The FAFSA is a student form
Even though parents are typically filling out the form, the questions are directed to the students. Keep in mind that the CSS Profile, an additional financial aid form required by many private colleges and universities, is directed to the parents.
One of my favorite books that comes out each year around this time is Princeton Review's "Paying for College: Everything you need to maximize Financial Aid and Afford College" by Kalman Chany, a nationally recognized college funding expert. In the recently released 2021 edition, Chany reports that roughly 39 percent of high school graduates failed to complete the FAFSA in 2019. Chany's advice applies the strategic planning techniques traditionally used by tax accountants in the world of financial aid. His recommendations take into account year-to-year changes in both the aid application forms and the formulas used to determine aid offers. This year's edition even offers guidance on dealing with COVID-19 college funding issues.
Lee Shulman Bierer is an independent college adviser based in Charlotte, N.C. Visit her website College Admissions Strategies.
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