College costs are considered as a big investment for families. Whether you've one kid or several kids, finance oriented conversations are likely considered as the important part of your kid's higher-studies. To make these conversations decisive but not divisive, you can apply some steps to get proper assistance with financial aid for your kids. It’ll be beneficial for you to devote time to think about financial aid and to seek advice about it.
1. Complete the FAFSA - Fill out the “Free Application for Federal Student Aid” (FAFSA) form. It’s an essential financial aid oriented document for your family. Your kids will be eligible for student grants, student loans, and Federal Work-Study after completing the free form. This facility is administered by Federal Student Aid; it’s the largest student financial aid provider in any of our states.
The FAFSA is available on January 1 each year, and you must advise your kids to complete it as soon as possible for them. If they submit the form early, they have chances to qualify for first-come, first-served awards. As a parent, you must also assist your kids by keeping your financial data ready during for application time, such as W-2 statements and SSN (social security numbers).
2. Determine the real cost of college - Students tuition fees vary depending on the school. The U.S. Department of Education's College Affordability and Transparency Center shows that students will get a similar education but with higher fees in private or four-year institutions by more than $47,000. There are additional costs also apart from the fees. These costs may include food supplies, textbooks, room and board, transportation costs, personal costs (plane tickets for visiting home in the holidays).
Most office websites for “college financial aid” provide an estimated cost of attendance. But, you must also remember that your students' personal expenses will increase and multiply for every year they remain in school.
3. Find the pros and cons of financial aid packages - Several financial aid packages include a combination of "bonus" plans. For instance, a grant and a scholarship that don't need to be repaid, or loans, which you must pay back at the time of graduation. Now, it's very important to have a talk with your kids about how they’ll cover remaining costs.
4. Take advantage of tax credits - There are currently 2 tax credits closely related to higher education costs. You can get information about both the options, but let me tell you that you may only claim one of these credits on your annual tax return.
The American Opportunity Tax Credit allows for a maximum credit of $2,500 for each eligible student to individuals, but they must have a modified gross earning of $80,000 or less per year. Married couples are also getting this benefit if their earning is $160,000 or less per year. It's also available to those kids who have four years or less of college credits. So, fortunately, undergraduate students will get highly benefited from this credit.
Additionally, remember to check out other savings plans like a 529 plan. It is a state-or-school-operated account that is tailored to support families for saving money to meet future college costs. Plans are divided into two categories - prepaid tuition plans and savings plans. All states sponsor at least one type of plan, so research your state's 529 plan(s) and their benefits and costs.
5. Additional financial aid is there - Encourage your kids to look out for additional scholarship opportunities at different organizations and schools. Help your kids to recognize their potentiality and weaknesses. If being a student, your kids can find a way to earn some money, guide them as much as possible. If they have an interest in different software applications, science projects, or online competitions, let them participate. Most importantly, don't give up hope.