Working the System

The past few posts have featured where and how to find money for college/post-secondary education. The "Weekend Investor" section of The Wall Street Journal (Saturday/Sunday, January 21-22, 2012) ran a very informative article entitled, "The College Aid Shuffle". Jessica Silver-Greenberg, with Kristen Grind, writes about ways that families who may think they're too wealthy to qualify for financial aid can "make the system work" to their advantage.

Ms. Greenberg writes that:
The single most crucial year is the one that begins
on January 1 of a student's junior year in high school.
In financial aid parlance, that's known as the
'base income year', and it's the one that counts
most in determining a family's eligibility. Any
income earned or assets acquired that year are
counted more heavily than in later years.
One of the strategies she advises is that families minimize their capital gains that year. Specifics are given as to how to reduce reported income.

Among other strategies discussed in the article, it's advised that parents don't save in a child's name as those funds are counted more heavily in financial aid formulas - 20% in contrast to 5.64% for parental assets.

In the post on January 4, I wrote about an excellent resource to help you estimate your financial aid needs and determine your Expected Family Contribution (EFC). The website is www.finaid.org/calculators/finaidestimate .
Ms. Greenberg also mentions SimpleTuition.com. This is a good site and especially helpful for loan information, providing direct application links to various banks.

If you still don't get enough financial aid, you can appeal to the school. They will reassess or review your application. I have advised parents to do this and in each case the school has adjusted the offered package in the student's favor. The families were asked to provide the school with a "running budget" which often showed how assets that looked healthy on paper were already committed to and offset by living expenses.