Are you or a parent of a high school student or perhaps you are just an individual considering going back to school yourself? In order to get a job in a specific field, you are likely to need a degree. The cost of school could put you in debt for many years depending on your choice of school and financial situation. As a parent or individual who is desiring going back to school, you may be wondering how you are going to afford all this.
In order to receive financial aid for college, you must start off by completing the FAFSA. (the Free Application for Federal Student Aid) This is an online form that determines who qualifies for grants and who does not. These are federally guaranteed student loans. These loans have better terms & interest rates than private loans.
Depending on the college that you plan on attending, you may be required to fill out a more detailed form. This is called a CSS Profile. This rewards non-federal aid.
Are you wondering if you qualify for financial aid? Here's what you need to know!:
The government's final deadline is June 30, 2019, for the FAFSA. Every college has its own deadlines though. If you file your forms after the deadline, your child may receive less aid or none at all. You can find this information on the website of the school you plan on attending.
The aide that you get is based on your current assets and the income you've had from 2 years ago. Bank accounts and investments are also considered, but $30,000 to $50,000 of your assets are "protected" and will not affect your eligibility. Retirement accounts, pensions, and the house you live in are also not considered.
Once you submit your FAFSA, the government calculates how much they think that your family could spend on college per year. If your child has a lot more money in their name, your child may receive less money. You may want to be strategic as to where this money is.
If you are divorced, it matters where your child lives. The FAFSA only asks about information of the custodial parent. If your child does apply to a school that requires a CSS Profile, they will usually consider the other parent's assets as well though.
If you are the custodial parent and you remarry, the stepparent's income counts too.
According to Legal Zoom, "If you withdraw money from a 401(k) or IRA to help pay for college, it will be considered income in the year you take it out. This means that making such a withdrawal could reduce your child's financial aid eligibility in future years."
Don't assume too quickly that you cannot afford a school. You may be surprised by how generous they are with financial aid.
Source: Legal Zoom