With the economy’s slump, employment opportunities down, and the rising costs of college education, it seems nothing is working in favor of the parents as their students rise to the challenge of going to college in today’s world. On the contrary, now is the time when knowledge is power. The more parents know about the financial aid system and how they can put it to work for them to get their students through college in comfortable manner will provide endless opportunities for their students in the future. Many parents make costly mistakes when it comes to funding college tuition bills for their students. Here are three things parents are encouraged to do to ensure they do not overpay for college.

Educate yourself. Many people spend more time researching their next car purchase then they do researching all their financial options for their student’s education. The average college graduate will earn over $1.5 Million more in their lifetime than the average high school graduate. Keep in mind that after your student is a few years out of college and on to their second or third job, which College your student attended becomes less important than having the degree itself, as job experience takes precedence. So if you are struggling to find ways to pay for that prestigious college, there are less expensive options closer to home that will provide them the education they need to excel. High schools offer financial aid nights for parents that review Federal aid available to parents. In addition, visiting colleges and meeting with college financial aid officers will also shed light on different avenues available. Remember, knowledge is power and now is not the time to make costly mistakes because you didn’t know any better.

File the FAFSA form. The Federal Application for Student Aid (FAFSA) is the starting place for any student to receive any type of aid for college. Without filing this form, many students will not be eligible for Federal, State, or College grants and scholarships, as many of the programs use the FAFSA as a guide for who is eligible for what types of aid. A common costly misunderstanding is that parents make too much money to qualify for any need based aid. Unfortunately, this immediately takes a student out of the running for any merit based aid the Federal or State Government or College might offer that student as well. For many of these state and college programs, the FAFSA is the students “application” and if the student doesn’t apply, then they will never get any aid. Famous hockey player Wayne Gretsky is famous for saying “I miss 100% of the shots I do not take…” Do not fall for this common misunderstanding, if you don’t file the FAFSA, you are guaranteed to overpay for college. In addition, apply as soon as possible after January 1st to get at the front of the line when the financial aid starts to get awarded. It is on a first come first served basis.

Plan ahead. The key of paying for a child’s education is to have a plan together as early as possible. Saving a little bit today will go a long way in the future. Knowing where to save and getting the right advice from competent professional advisors is important. Some parents could save money their whole lives for their children’s education which can end up working against them in the end when it comes to the financial aid formula. Resulting in the parent overpaying for college. If a college degree for your student is important to you, then a proper plan should be your priority to ensure you maximize the amount of aid you receive and avoid making costly mistakes.

In this day and age it is more important than ever to not only ensure that your student gets a college education, but to ensure that you are getting all the help you can get along the way to finance this dream in a comfortable manner.

To coincide with this article, there is a Free College Funding Workshop held at the Peachtree City Library on Tuesday, April 21, 2009 from 6:00-7:30PM to share additional strategies for parents on how to avoid costly mistakes and not overpay for college. Remember Knowledge is Power. Call 1-800-498-0413 for reservations.

Carrie Freeman
College Funding Consultant
Valley Estate Planners, LTD

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