Tips for the Financial Aid Application Process

Applying for financial aid can be as difficult as any exam you take in college. The whole process can seem about as user friendly as an over-complicated instruction manual!

Although it’s an extremely complex and time-consuming process, there are some helpful pointers we’d like to share so that you can avoid some of the more common mistakes made when applying for aid.

– Scott

Tips for the Financial Aid Application Process

Common Mistakes

The FAFSA application is a minefield of potential errors that could jeopardize how much aid you receive. And those errors can take on a few forms. Tax errors and asset errors are the most common.

Tax mistakes

A common tax error is reporting your taxes due instead of your total income tax. They sound similar but there is a difference. Read the instructions carefully, and always consult a licensed tax advisor for any tax-related issues.

Asset mistakes

What investment ‘gurus’ may call assets, FAFSA doesn’t. Some assets FAFSA considers “includable”… while others, are “non-includable.” “Includable” means FAFSA will include them in their calculations to determine how high your Expected Family Contribution (EFC) will be… and “non-includable” means they will NOT include them in the calculations.

Certain assets, such as annuities, cash value of a life insurance policy and retirement plans are not reported as assets on the FAFSA. Also, you should not include your home equity as an asset on the FAFSA either (although certain private schools that take the CSS Profile form will count your home equity against you).

Section 529 college savings plans are assets of the parents if the parent is the owner of the plan. However, some colleges may treat these plans differently depending on their own internal financial aid rules.

Financial Aid

Miscellaneous Mistakes

Many families will wait until April, when income taxes are due, to complete their FAFSA form. Do NOT do this! Fill out the FAFSA early – with estimated tax figures – rather then waiting. You can always go back later and update your FAFSA with your updated tax information.

If you’re divorced or separated, make sure you put down the right person’s information — and ONLY the right person’s information — on the FAFSA. Just because a parent is the legal custodial guardian doesn’t necessarily mean they’re the one to complete the FAFSA. As a fact, it’s the parent(s) in the household who has lived with the student for the greater part of the year. Many parents will, unfortunately, include all members of all households’ financial information when it’s not always necessary… and that will significantly increase your EFC far more than it should be.

One final point: When reporting income or writing dollar figures, do not write cent value. That’s because the extra digits can be counted as dollars. For example, $873.95 is read as $87,395.

To your college funding & admissions success,

Scott Weingold

Co-Founder, College Planning Network LLC

Publisher, CollegeMadeSimple.com – The free educational resource of College Planning Network

 

Related Articles:

What to do Before You Apply for Financial Aid

FAFSA Frequently Asked Questions

How Does My EFC Work?

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.