When most parents hear the term “financial aid” they assume that they make too much money to qualify for anything. The truth is financial aid is based on a number of factors besides income.
Number of children in college, age of the parents, divorced or separated agreements, and the cost of the school are just a few of the additional factors that go into the financial aid formula. Families with combined incomes as high as $200,000 per year have qualified for aid. Don’t rule yourself out until you truly understand how this system works. This is a system that is responsible for over $212 billion dollars in college assistance last year alone. Be aware, however, that a good portion of that $212 billion is represented in loans that must be paid back. Whether your family qualifies for aid or not depends upon one number.
What is that “college” number you ask?
All successful college financial plans start with determining what will be your Expected Family Contribution (EFC). This is the number that the Department of Education determines your family can afford to pay for college each year. A figure that is based on a number of things including: income, assets, ages of the parents, and number of kids in college.
Once your family knows its EFC, it can quickly determine whether need based financial aid will be a factor or not. Be careful, however, just because your oldest doesn’t qualify, when you have two in college, they both might qualify for aid. Here is the formula: Cost of Attendance (COA) – EFC = Family Need
If your EFC is less than the COA, than there is a chance for need based financial aid. If there is a chance for need-based aid, your family needs to do everything it possibly can to legally lower the EFC number in order to obtain as much aid as possible. The key is determining your EFC as soon as possible. Unfortunately, many families learn this number only months before their first payment is due.
This is an excerpt from our report “13 Strategies to Beat the High Cost of College.”
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Chelsea Watkins is Founder/CEO of College Application Training. She has 20+ years of experience in the college application process helping students raise test scores, create winning college applications, fund college expenses, and stay safe in college. Chelsea even goes one step beyond to help with ideas on building wealth for a comfortable retirement.