The 5 Deadliest Mistakes Parents Make When Applying For College Funding

The 5 Deadliest Mistakes Most Parents Make When Applying For College Funding—And How to Avoid Them...

In this series I am going to cover 5 deadliest mistakes almost every parent makes when trying to get money for their child's college education.

If you make any one of these mistakes, it could end up costing you thousands or even tens of thousands of dollars in lost funding that you might have been eligible for.

I don't want to see you making these mistakes if you don't have to. That's why I've decided to devote this "College Tip" to teaching you how to avoid these common mistakes and make sure you get the maximum amount of money from every school your child applies to.

So, without further ado, let's discuss...

"The 5 Deadliest Mistakes Most Parents Make When Applying For College Funding—And How to Avoid Them..."

Mistake #1: Most middle and upper-middle class parents assume they won't be eligible for financial aid because they own a home and make over $75,000 per year.

Reality: Most families with incomes ranging from $50,000 - $150,000 per year who own homes are eligible for some form of financial aid. There is over 150 billion dollars available each year from the Federal Government, the states, colleges and universities, and private foundations and organizations. You just have to know how to get your "fair share". Unfortunately, most parents give up before they even start and assume they won't be eligible. This is exactly what the government hopes you will do so they can keep more of these funds. Don't make this mistake!

If you fall into this category, make sure you apply; you'll probably be eligible for SOME money.

Mistake #2: Focusing your time and energy on a private scholarship search instead of spending your time trying to qualify for "need-based" financial aid.

Reality: Private scholarships make up only 2% of the money available to you to help pay for your child's college education. The other 98% comes from the Federal Government, the state you live in, and the colleges and universities your child is applying to. Therefore, you are much better off spending your time and energy going after the 98%, rather than spending your time looking for the crumbs! These so-called "scholarship searches" you read about are normally scams and a complete waste of money. They charge you an arm and a leg and don't deliver. However, if you still insist on at least looking for some scholarships, call my office and we will give you a website that provides a free scholarship search.

Mistake #3: Assuming only minority students, athletes, and academically gifted students get financial aid.

Reality: Nothing could be further from the truth! "Need-based" financial aid is solely awarded based on "financial need" which is calculated by taking the cost of attendance at a school and subtracting the family contribution (which is the minimum amount the government feels you can afford to pay based on your income and assets and your child's income and assets). Whatever is left over after you subtract these two numbers is your "financial need" or eligibility for financial aid at a particular school. If you haven't noticed, this has nothing to do with a student's ethnic background, athletic ability, or grades. It's purely based on this simple formula:

COA(Cost Of Attendance) - FC (Family Contribution) = FN (Financial Need)

Mistake #4: Picking colleges and universities without paying attention to where your student lies in comparison to the rest of the student body.

Reality: To increase your chances of getting the best possible financial aid packages, it is imperative that you pick schools where your child lies in the top 10% of the incoming freshman class with respect to their GPA and SAT/ACT scores. Although schools give financial aid based on your calculation of "need" at their school, they will definitely give preferential packaging (i.e., more FREE money, less loans) to students who lie in the top 10% of the incoming class. The reason they do this is to attract the better students to their school. Use this to your advantage and try to apply only to those schools where your child would fit into the top 10% category.

Mistake #5: Assuming all schools are created equal and will be able to give you the same amounts of money.

Reality: All schools are not created equal and will not be able to give you the same financial aid packages. Some schools are well endowed and get a lot of money from alumni and corporations. These schools have more money to award and are generally able to meet most or all of a student's financial need at their school. Other schools, like state universities, get no private funds and rely solely on state and Federal funds to help fill a student's need at their school. In many cases, these schools leave students short and give them less money than they are eligible to receive. It can actually end up costing you more to send your child to a "cheaper" school if they don't have the money to meet your need. It is very important that you know each school's history of giving money before you ever apply, so you're not blown away when you get a bad financial aid package from your child's top school choice.

Check back next week for the next “College Tip” in my series where I will be discussing 5 additional deadliest mistakes almost every parent makes when trying to get money for their child's college education. Until then...

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