Mastering the College Aid Game

Mastering the College Aid Game

An insider's guide to maxing out financial aid

Most people who apply for financial aid for school have only a hazy idea of how colleges make their decisions. But there are some important facts everyone should know before they even sit down to fill out the forms. Campus Consultants Inc., a firm that guides parents through the financial aid process, has these tips on how to qualify for the most financial aid possible.

Understand the angles: The theory is, the money goes where it's most needed. But people who better understand the system and how it works are going to get the most money. Few families understand how the aid process works. Most people are just gambling. Anyone can benefit, you just have to understand it. 

Don't rule out any school as being too expensive: Private schools are more flexible, and may be able to offer more financial aid since they are not as regulated as state schools. If a family can afford $15,000 and it's looking at a a $50,000 school, it might be eligible for $35,000 in financial aid.

Think local: If you really need the money, the worst thing you can do is go to a state school outside of the state in which you live. It's not popular and it's not good politically to give lots of aid to a student who is from out of state. The student isn't able to qualify for state aid. Instead, look at the state school in your state, or a private college in your state or out of state.

College Aid Game is really hard to understand. Photo by Elena.

Know the timeline: The family income that the institutions will look at starts in January of the child's junior year in high school and ends in December of the child's senior year in high school. During that time, parents should be wary of selling stock, withdrawing from pensions prematurely, or withdrawing from IRAs prematurely.

Put assets in the parent's name: In aid formulas, the student's solvency is weighed more heavily than the parents'. If you want to hope for financial aid, put the money in the parent's name, not in the child's name.

In divorce situations, assume the custodial parent has the bonus. The parent who had custody of the child for the previous 12 months before is the parent whose income will be scrutinized. In other words, the parent that the child lived with when the child was a senior in high school is the custodial parent. The custodial should fill out the financial aid forms. A handful of schools will look at both parents, but the majority don't.

Don't relay on the school's financial aid administrator. Financial aid administrators work for the school. They are going to put the school ahead of the family. Ask them what to do, how to save money, and they won't answer. They'll tell you the rules, but they put the needs of the school first.

Save regularly: Above all, parents should set aside as much money as they can on a regular basis. They should get into the habit of saving regularly. Parents shouldn't be intimidated by statistics quoting the astronomical cost of tuition. They should just save as much as they can, as regularly as they can.