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College Financial Aid Tips
UPDATE! College Loan Overhaul
The U.S. Congress overwhelmingly approved a complete
overhaul of the country's higher education law in August
2008, which added dozens of provisions and programs to help
combat skyrocketing college costs.
The bill requires colleges and universities to report more
information about their costs and prices (to be released by
the Dept. of Education in user-friendly lists). Those
schools with the largest percentage of tuition increases
will have to disclose why they were needed and what will be
done to keep costs down.
It also simplifies federal financial-aid forms (creating a
two-page FAFSA-EZ form) and makes Pell grants for low-income
students available year-round, rather than during the
academic year. Colleges are now required to disclose all
relationships with student lenders and bans all gifts and
revenue-sharing agreements between institutions and lenders
who offer federal and private loans.
Educate Yourself About the Financial Aid Options
You should know what you are about to get into and how to
best plan what is likely to be one of your life's largest
purchases. Let's set the record straight up front. There is
no panacea for everyone to ensure they will not have to pay
for their college educations.
There is a good chance that say the equity in your home
and/or some other components of your net worth and income
will be held against you in the calculation of your SAR
(summary of the financial aid you can expect to receive) of
your
FAFSA. This does not mean, however, that there are not
ways to reduce the financial burdens of the college
education expenses.
Research Your Tax Options
There are many potential tax benefits that are available
to most tax payers. These include Section 529 college
tuition savings plans. Additionally the interest on student
loans is sometimes tax deductible. While we are not
attorneys or CPAs, and hence do not wish to dispense tax
advice, we have included some general information on the tax
ramifications of financing a college education. This should
certainly help you get on your way to optimizing your tax
situation.
Get to Know Your Financial Aid Administrator
Establishing a healthy relationship with your financial
aid administrator will help ensure that he or she does
everything to help you out. Additionally, this may help if
you have any atypical expenses for which they may be able to
make an allowance.
Start with Uncle Sam
The first financial aid form you complete should be the
FAFSA, Free Application for Federal Student Aid. Even if
you know you won't qualify for any aid, filling out this
form is often the first step to applying for many types of
aid including federal loans, state grants, and college
scholarships.
Apply Early
Apply as soon after January 1 as possible. You can use
estimates for items such as income if you have not completed
your tax returns. Financial aid is partially given out on a
first-come, first-serve basis.
Apply for Everything
You'll never get the grants or scholarships if you don't
apply. There are many good scholarship search engines as
well as many different types of scholarships out there.
Chances are you will qualify for a number of these.
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