These student financial aid tips will give you more bang for your buck


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With the income tax deadline coming up for Texas, tax adequacy is a hot topic. For one thing, the income tax you pay next year can be drastically reduced by the decisions you make now. On top of that, the same planning that will lower taxes can help make your child’s college education much more affordable.

In case you didn’t know, there is a student aid application called FAFSA (Free Application for Federal Student Aid) which determines eligibility for the lion’s share of university financial aid available. Like taxes, there are tips to help you get your money’s worth. In other words, how you complete this document will go a long way in making higher education affordable.

Even if your kids are years away from high school, the decisions you make now can make a big difference later. To get the ball rolling for a better future, here are some tips:

• Principle 1: Generally speaking, the less wealthy you appear, the more funding you will receive. Notice the word “appear”. Like income tax rates, eligibility for federal assistance is greatly influenced by how you manage your money. Indeed, like the tycoon whose taxes are lower than those of his butler, it is quite possible that a wealthy person is entitled to more financial assistance than a person with much lower income. Even though I’m not saying it’s correct, it is. At the same time, knowing the rules can minimize these problems.

• Principle 2: The first step in maximizing eligibility for assistance is to transfer the assets held in your child’s name to your custody. For every dollar in your child’s accounts, the government will subtract 20 cents from the student aid package. In contrast, the penalty on parental property does not exceed 5.64 cents on the dollar. In other words, $ 1,000 in student assets will reduce aid by $ 200 while the same amount in the parent’s bank account will result in a maximum reduction of $ 56. Where you drop the proceeds from your child’s part-time jobs makes a difference! The only exception is a tax-deferred education savings account called the 529 plan. These are valued at the parental rate, whether they are in your name or that of your child.

• Principle 3: Once you have as many assets as possible in your name, parking your savings in strategic places will go a long way. For example, the FAFSA does not hold your primary residence, life insurance policies, or retirement accounts (like IRA, 401k, and 403b) against you. Additionally, personal property like cars, clothing, and furniture is also not classified as financial assets. By maximizing contributions to retirement accounts, paying off the mortgage, and prepaying personal college expenses (like dorms) before completing the FAFSA, you will minimize the penalties applied to any financial aid your child may receive. Also, as much as I hate to say it, spending rather than saving can increase aid. For example, while buying a new car is usually not the best financial decision, transferring money from savings to a possession that the FAFSA does not consider can potentially allow you to benefit from it. financial assistance.

• Principle 4: Although the FAFSA carries great weight, the information it contains reflects your finances from the previous year. If your income and / or expenses have changed significantly from last year, this can significantly influence your eligibility. If events such as illness, death in the family, divorce, or job loss occur, notify the financial aid offices of the institutions your child is applying to. By providing documentation and keeping colleges up to date on the current financial situation, you can increase the chances of getting landing assistance. Keep in mind that you should only be concerned with this principle if your child is planning to attend college in the coming year. In addition, this point should only be continued if your situation has deteriorated.

• For more information: To find out more about the different types of financial aid available, there is a dedicated website at https://studentaid.ed.gov/sa/. In addition, information about the FAFSA itself is also available there.

Even if your child is just a newborn, it is never too early to think about this question. In my case, the lack of knowledge on this issue made the education of my daughters much more expensive. That is to say, learn from my mistakes! If you come up with the right strategy, it will make a big difference in your child’s education and in your financial situation.

If you have any advice for parents trying to finance their child’s education, please visit and “like” our Facebook site (www.facebook.com/LubbockSavvyShopper or log into Facebook and enter “Lubbock Savvy Shopper” in search tool) or email us at [email protected] and let us know your thoughts.

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SEAN FIELDS is AJ’s wise buyer. Read his columns on Sundays and Wednesdays. Email him at [email protected], like his Facebook page at Facebook.com/LubbockSavvyShopper, or check out previous columns and offers at lubbockonline.com/savvy-shopper.


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