Seven Ways To Be An Informed Buyer To Beat The High Cost Of A College Education

This Month's Highlights:

• Don't Panic! It's Just An Email

• FAFSA Filed? What Now?

• The Financial Aid Insider: Pay Less For College Starting Today

January is a month when people make resolutions that will improve their lives. The most popular New Year's resolutions are often related to health and fitness, but can also include financial goals, personal relationships, and work:

• Exercise more

• Eat healthier

• Save more money

• Spend more time with family and friends

• Quit smoking/drinking too much

• Making your bed every morning

It's interesting that only 9% of Americans that make resolutions complete them. In fact, research goes on to show that 23% of people quit their resolution by the end of the first week, and 43% quit by the end of January. Will you be one of the 25% who make it past January?

Don't Panic! It's Just An Email

After your student applies to a college you can expect emails from both admissions and financial aid.

One of the most sinister emails students receive are the ones that lead them (and you) to believe the FAFSA you filed wasn't received by the college.

Even if you know you filed the FAFSA, emails such as these cast doubt in your mind.

One thing to keep in mind is that whether you filed or not, this is blanket email going out to everybody who sent in an admission application. There is no communication with the financial aid office about this.

If your student receives an email from the Financial Aid Office with a name, address and contact information with instructions as to what is required, requested or missing, then THIS is something to pay attention to.

This is where parents call us in a lather. We have to remind them that the forms were already filed and the email from the college is a blanket email sent to every student who applied.

I urge you to carefully read and understand the email before pressing the panic button. You'd be astonished how many people of high intellect don't read these emails or if they do are completely flummoxed by them.

If you think there might be a problem, you should log into the colleges portal using your student's username and password. Somewhere in there you will find out if it's nothing or it's something. Granted, some of these web portals seem like they were designed for programmers and not parents, and if you can't navigate to find the answer, and you're our client, we can quickly find out what the college wants from you.

Starting in February some colleges that have already admitted your student will send emails instructing them to secure their student loans and assigning the funds to them.

Colleges use this strategy to be helpful. Helping your student make a decision they aren't yet ready to make.

Here's the truth: Student loans can be applied for at any time. There are no shortages of loans.

If a college tells you they never received your student's CSS Profile. This email is legitimate. 99% of the time the mistake is made because the student entered their social security number incorrectly on their admission applications. A call to the college can fix the error.

FAFSA Filed? What Now?

Once the financial aid forms have been sent, I recommend having your student monitor their email for messages from the colleges that actually need something for their application. This could be tax return, an institutional supplement form, a verification form, etc. There are many forms a college uses to get more information.

Assuming the colleges have what they need, there isn't much you can do other than wait it out. Some financial aid offers don't arrive until April 1st.

In the meantime, you could research what aid offers look like and learn how to decipher them. Despite the government's best efforts to have college standardize their award letters, too many don't tell you what you really want to know: How much will you the parent have to pay.

The actual cost of attendance may not clearly indicate what the indirect costs are. Indirect costs are not billed to the student or parent, but they do include books, educational supplies, personal and transportation expenses.

Learn the lingo. What's the difference between a scholarship and a grant? What about aid in a fifth year? What kinds of loans are being offered? Is a work-study job guaranteed? This is what you'll want to know before the official aid packages arrive.

Pay Less For College Starting Today

Each month, we provide you with tips on your best ways to pay for college regardless of your financial situation.

The FAFSA Simplification Act has made significant changes to the financial aid formula, eliminating some key money saving features, such as excluding the value of a small business or family farm, the asset protection allowance, or having more than once student in college at the same time.

In spite these changes, there are new strategies remain for maximizing need-based financial aid eligibility. You just have to know what to do and where to look before you file the FAFSA. New strategies involve contributions to certain retirement plans, exclusion of grandparent-owned 529 plans, exclusion of sibling 529 plans, rollovers from a 529 plan to a Roth IRA and exclusion of gifts to the student.

In the coming months I'll provide more detail on these strategies.

Until next month...

P.S. If you find this newsletter helpful, please share it with other parents like yourself!