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College Admissions: Financial Aid + The Fiscal Cliff

Monday, January 07, 2013

 

January brought good news for college-bound students and their families in the form of fiscal cliff avoidance. The American Opportunity Tax Credit, which helps defray undergraduate college education

expenses by allowing borrowers to deduct up to $2,500, has been extended for five years, through the end of 2017. Additionally, the Tuition and Fees Deduction, which allows taxpayers to claim up to $4,000 in tuition expenses, has also been extended. On the downside, the federal Work Study Program and Federal Supplemental Opportunity Grants remain at risk if an agreement is not reached by March 1st.

Bearing this in mind, if you have a senior in high school, the next few weeks are critical in the financial aid process. While federal financial aid deadlines may stretch into the summer, college-based aid is most plentiful now. The longer you wait, the less money colleges will have to offer you. The pool is not endless. So, here are a few things you can do now to ensure the best financial aid packages for next fall:

1. The general rule of thumb is that unless you can write a check today for the full amount of your child’s college costs, you should file financial aid forms. I routinely see families with incomes exceeding $150,000 receive generous need and merit aid packages from colleges. And, you don’t have to be a straight “A” student to qualify for merit aid. So, don’t underestimate your opportunities for college funding.

2. Read the financial aid section of each website where you are applying to college and understand the deadlines and forms that you must submit. Then, run your numbers on the net cost calculator located on each college’s website to get an idea of the aid you could receive. All colleges are now required to have these calculators, but beware that many do not include merit aid. Even if you don’t qualify for need based aid, you should apply for merit aid. If you have questions, don’t hesitate to call the financial aid offices at colleges. They have a wealth of knowledge and are ready to help you before you matriculate.

3. File your FAFSA in January or February. Parents should do an estimated 1040 now to collect all the financial information you will need, and then fill file the FAFSA in January or February. You don’t need a final tax form for 2011; estimates will suffice based on your end of year W-2 and 2010 taxes. Always use the official FAFSA website; the form and filing it are free: www.fafsa.ed.gov.

4. File the CSS profile immediately after your application, if you are applying to one of approximately 250 colleges which require it. This form allows you to qualify for college-based aid at member institution. A list of CSS Profile member colleges and forms can be found at: https://profileonline.collegeboard.com/prf/index.jsp.There is a charge to file the CSS Profile, but fee waivers are available for students with need.

5. Parents who have one child in college already, should not assume that because they did not receive aid with their first child that they won’t receive aid for a second child. Rules and funding formulas change, and having a second tuition will usually move your Expected Family Contribution (EFC). Additionally, all colleges base merit aid on different criteria, and parents should not discount the possibility that a second child could receive merit aid, even if the first child did not.

6. Make note of special circumstances if your family has unusual medical bills, a sudden loss of income or other issues that may not be evident on your aid forms. Write a letter to the financial aid office detailing your circumstances and asking for special consideration. Make sure that you include documentation to support your claims.

The economy may be stagnant, but there is money out there. It just takes time and planning to ensure that you file all the necessary form on time and completely, in order to receive the most aid possible.

Cristiana Quinn, M.Ed. is the founder of College Admission Advisors, LLC which provides strategic, college counseling and athletic recruiting services for students. www.collegeadvisorsonline.com.

 

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