Financial aid mistakes that could cost you
To help these and many other students and their parents pay for their education, the federal government and other private sources have been offering record levels of financial aid to meet this growing need. In 2016 alone, the U.S. Department of Education awarded $150 billion to millions of students.
Financial aid can make a huge difference when it comes to a person’s education. But if not handled correctly, mistakes made could be costly. The following mistakes are more common than you might think. In order to get the most out of your financial aid experience, it’s best for you to avoid them.
Not Applying At All
This one is at the top for a reason. It’s easily the biggest mistake that can be made when it comes to financial aid. It goes without saying that you can’t get any money if you don’t apply for it.
Applying Too Late
The financial aid application process for students for the 2017-18 school year should begin as soon as possible after October 1, 2016. FAFSA is available starting January 1 for enrollment the following fall, but students often don’t apply until the last minute. By putting off applying they could potentially be missing out on certain grants and scholarships that are awarded on a first-come, first-served basis. Many of the individual state deadlines also encourage students to apply as early as possible.
A common misconception is that students think they need to wait to file their federal income tax returns or need to be accepted by a college before applying for financial aid. Neither is true. The FAFSA only requires estimated income and tax information, which can easily be updated online after you file your returns.
Don’t wait until the last minute, or until it’s too late. The sooner you can start the process, the better.
Applying for Too Much Money
Take only what you need to keep your debt down to a reasonable amount. This may mean getting an associate degree at a two-year college that gives you the option of transferring to another degree as you can afford it.
As a reference point, the average annual tuition for colleges in the Wisconsin Technical College System is $3,775 (based on two, 15-credit semesters in 2015-16). Low tuition is why 6 of every 10 two-year college graduate graduates with $0 debt, while the average debt for a four-year college graduate in the U.S. now stands at more than $35,000, according to Edvisors. Be careful how much you borrow and know what’s realistic for you to pay back. A good rule of thumb is never to borrow more than you expect to earn in your first 12 months of work after graduation.
Not Taking Advantage of Scholarships or Other Aid
There are numerous scholarships, grants and other aid programs offered federally and locally that many students don’t take advantage of. Every little bit helps. Check with your college’s financial aid office to see if there is something for which you may be eligible. Do a thorough search for private scholarships based on religious, cultural or other affiliations, or even trade organizations.
It’s not uncommon for students to receive thousands of dollars because they fit the parameters of the philanthropists looking to help individuals who may not receive much public financial aid. They are out there and often have a hard time finding eligible students for their money. You just have to seek them out.
College is expensive, but a little research and legwork could lessen the burden on you or your child.