A highly popular subject among those in need of money for college is how to maximize financial aid eligibility. The truth is, that when it comes to maximizing one’s financial aid eligibility, there really are not any secret techniques or magic formulas. Everything (legal) that one can do to maximize their chances of receiving federal financial aid for college can be found through simple research. There have been many books written on strategies for good financial planning and management, which is what essentially will help to “maximize” your financial aid eligibility.
It’s important to note that the federal financial aid system is set up to distribute its funds fairly, and any attempts to defraud the federal financial aid system carry heavy fines and punishments. The goal should be to make certain you are doing everything possible to ensure you get the financial aid that is honestly owed to you or your child. You should not be looking for opportunities to unfairly scam the federal financial aid system, and divert funds away from someone who has a greater financial need.
When a students asks “how can I get more money from fafsa” perhaps the more correct way to think about it is, “how can I maximize my financial aid eligibility”. Since most federal financial aid programs are based on a student’s financial need, there is not much a student can do to guarantee more money from FAFSA, without dramatically changing their or their family’s financial situation. However, what a student can do is take a look how the federal financial aid programs calculate eligibility, and make certain that they are maximizing their federal financial aid opportunities to the fullest. Outlined below are 3 easy tips you can implement to help ensure you are maximizing the amount of federal financial aid you are eligible to receive:
1. Pay Down Credit Card Debt With Savings
If you have some money saved away and also have consumer debt, such as credit card balances, you could consider paying these debts off or down. Credit card debt is not factored into the financial aid eligibility equation, but assets such as cash are. So by using some saved cash to pay off or down consumer debts such as credit cards, you will be helping to maximize your federal financial aid eligibility.
2. Save Money In Parents Name
When saving for college, save money in the parent’s name, and not the child’s name. Since parents only need to contribute around 6% of their assets, and you are expected to contribute more then 5 times that, having more assets in your parents names will help maximize your financial aid eligibility. Using a college saving plan that is treated like a parents asset (such as a 529 plan) can also work in a similar fashion.
3. Spend The Students Money First
The student should always spend down his or her income and assets before spending the parent’s assets. The student should also consider making any large purchases BEFORE he or she files the FAFSA, this way the reduction in cash will count towards maximizing your financial aid eligibility.
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