10 financial aid pitfalls |
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Applying early
Though knocking the college application process out
of the way before your peers seems like a good strategy, it may not be for your
wallet. To avoid the rush of college applications, many schools offer two windows
when students may submit them -- the regular December/January admissions season
or an earlier application window typically in October or November. Students who
opt for this earlier window hear back from their schools faster, usually around
the same time regular admissions students are submitting their applications. However,
there's one big catch: While some schools with early action programs allow early
applicants to apply to as many other schools as they'd like, others with early
decision programs require students to sign a legally binding promise to attend
that particular school if admitted. These early decision programs only allow students
to apply for one school, denying them the opportunity to compare financial aid
offers from other institutions.
"It's risky," says Kalman Chany, author
of "Paying for College Without Going Broke" and founder and president
of Campus Consultants. "Institutions realize that you really want to go to
the school and they figure they can offer less aid because they know that there's
no competition." To avoid getting caught in the early
application trap, read the fine print before sending off your application. 3.
Planning too late
"The No. 1 mistake students make is not financially planning
at all," says Jeffrey Wallin, associate director for financial
analysis at the University of Vermont. "In their freshman year
in high school, students should start thinking comprehensively about
where they're thinking of attending school and how their family
finances can be organized to do that."
To maximize aid eligibility, students and parents
should begin organizing family finances long before they ever touch
a FAFSA form. That means spending the students' first three years
in high school paying off lingering family debt, which unlike income
and assets, is not assessed on the FAFSA form, maximizing contributions
to accounts such as IRAs and 401(k)s that don't count
on the FAFSA form and investing some leftover savings in such things
as a computer, clothes or dorm supplies that the student will need
for college. The goal is to invest as much of your income and assets
as possible in FAFSA-exempt places before the federal government
counts your stashed cash against you. Liquidate stocks, bonds or
mutual funds to pay off a credit card or the car loan by no later
than your student's junior year in high school.
4.
Overlooking private scholarships and grants
Federal and campus-based
programs are your two best shots at receiving a financial aid check, but they're
not the only places you can find college dough. There are literally thousands
of private scholarship and grant programs available to students savvy enough to
find them. The problem, Barnett says, is that while there are millions of dollars
in private aid available, many students use the shotgun approach and wind up wasting
their time applying for programs they have a slim chance of winning. | 
