20 ways to get federal money for college

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Scrounging for college cash? Let Uncle Sam foot the bill.

Paying for college

If your college savings aren't as flush as you'd like, check out these tips to get your slice of the free money.

20 ways to get federal money

  • Assess your assets.
  • Apply, no matter what.
  • Meet the deadlines.
  • Save in parents' names.
  • Ditch your debt.
  • Count your babies.
  • Coordinate your college students.
  • Serve your country.
  • Maximize IRAs, 401(k)s.
  • Buy a house.
  • Spend, spend, spend.
  • Get personal in financial-aid office.
  • Keep up the course load.
  • Work it.
  • Reduce capital gains.
  • Test yourself.
  • Perk up.
  • Report the support.
  • Use the grandparents.
  • Be honest.

1. Assess your assets. Knowing is half the battle. offers free online financial aid calculators that can help you determine what sort of award your family might qualify for, how much you'll need and, most importantly, what fiscal assets could potentially reduce your aid package. Having a clearer picture of your financial prospects will help you maximize your child's aid eligibility.

2. Apply, no matter what. According to the American Council on Education, every year, millions of students who qualify for Pell Grants miss out on the free government cash simply because they don't fill out the Free Application for Federal Student Aid, or FAFSA, paperwork. In fact, regardless of assets or household income, all dependent students qualify for Stafford loans. But you can only get them if you file your FAFSA.

3. Meet the deadlines. Turning in your FAFSA late can significantly decrease your chance of banking big. Keep in mind your state's deadline, too. "We encourage students to complete the FAFSA as early as possible and in advance of state deadlines so that they can get all of the free money that they are entitled to," says Martha Holler, vice president of corporate communications at Sallie Mae. Cathy Thomas, former director of financial aid for the University of Southern California, reports that missed deadlines are the No. 1 mistake students make when applying for federal aid. "If they don't miss them the first year, they miss them the second or the third or the fourth," she says. To make sure your student qualifies for all first-come, first-serve aid, estimate your annual income and turn in your FAFSA as early in the year as possible.

4. Save in parents' names. No mortgage payment, no electric bill, no insurance premium -- the life of a student is fiscally sweet. But the government does expect students to contribute financially to their own education. Dependent students are expected to apply up to 20 percent of assets toward college, while parents contribute up to 5.64 percent of their assets. Instead of stockpiling money in your child's account, keep it in your own or stick it in a 529 plan.

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5. Ditch your debt. While aid officers will consider what you've got, they won't consider what you owe. Consider liquidating funds that could count against you by paying off loans or credit card debt. Beyond simply increasing your child's eligibility for federal grants and scholarships, eliminating debt will also help your family qualify for larger, lower-interest loans.

6. Count your babies. The amount Uncle Sam expects you to contribute to your child's education partly depends on your family size. Put simply, larger families are expected to contribute a smaller percentage of their income per college-bound child than smaller families. Most parents don't realize that unborn children count as family members, too. Pregnant mothers should count each expected child in the case of twins, triplets, etc., but be sure to get written confirmation from a doctor.

7. Coordinate your college siblings. Looking to double the size of that aid package? Try doubling the number of kids you have in college. "Financial aid formulas are very heavily weighted toward yearly income, and just because you have more children in school at the same time doesn't mean that you have more income," says Mark Kantrowitz, founder of financial-aid website "Holding back a child or trying to maximize the overlap between the children in school -- that can have a big financial impact."

8. Serve your country. For students looking for a constructive way to spend a gap year (possibly to help coordinate the number of siblings simultaneously in school), Americorps offers yearlong service programs that are guaranteed to never lower your financial aid eligibility. Besides giving a small stipend and an educational award upon completion, the program offers invaluable training, the opportunity to make a difference and great experience to note on a college application.

9. Maximize IRAs, 401(k)s. Two assets that won't be considered on the FAFSA form are funds invested in your family's primary home and accounts set aside for retirement. Investing more money in your future now could result in the government investing more in your child's future. If you have liquid funds just waiting to find their way into your retirement account, invest no later than two years before applying for federal aid because the prior year's contributions to a retirement plan could count as income on the FAFSA.

10. Buy a house. If you're thinking about moving on up, consider your timing. Funds tied up in the purchase of a family's primary home are not considered available assets. Instead of having that equity subtracted from your child's aid package, use it to your mutual advantage by investing in something your entire family can enjoy.


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