This article is ideal for students, parents and families in general who is or has someone currently attending school that requires tuition and would like to lower costs. 

According to the Free Application for Federal Student Aid (FAFSA), “The Expected Family Contribution (EFC) measures your family’s financial strength, and is used to determine your eligibility for federal student aid during one school year.” After processing the results of a student’s FAFSA, the EFC is produced. There are factors such as a parent’s income that will affect a student’s Expected Family Contribution. A parent’s monetary savings, assets, and number of university students in your household will affect your EFC. Here are some ways to help ease the effect of any increases in your EFC.

 

Please take in mind, the amount of assets and savings you have also affect your child’s financial aid package. Find ways to minimize your savings. If you have any planned purchases that have significant costs, such as the purchase of a car, consider purchasing it earlier to minimize savings and to maximize the amount of financial aid your child would receive. Pay off credit card debt and loans to minimize your assets.

 

Financial aid packages are usually calculated under the assumption that the child will use his/her finances to pay for his/her education before using financial support from the parents. If your child has any savings for college, consider using it on school-related materials, such as a laptop, dorm furniture, appliances, and things of the sort.
 

Some parents consider taking out loans in their child’s name instead of immediately paying for the child’s education. The child’s loans may be tax-deductible for the parents, and many see this as a way for the child to establish a credit line. The student may borrow from a bank or the government, with the latter known for offering low interest rates. Then, the parents are free to put the money saved towards investments that would yield a high return, which outweigh the interest charged on these student loans, especially if these student loans are issued by the government.
 
 

The more individuals going back to university you have in your household, the more financial aid each individual may qualify for. If you have considered going back to school, this may be a good time for you to increase your financial aid. Some parents would have their child take a year or two off from school before going on to college so that the child would be in school at the same time as their younger siblings that are also attending college. This in turn would raise the number of individuals attending college/university in one household and would lower the EFC for the household.
 
 

If you have any sort of retirement funds and have not reached the contribution limit, add more funds to the retirement plans. Your retirement funds will not affect the way your child’s financial aid package will be calculated. This way, you rollover money from  your income to a retirement savings plan that won’t hurt your child’s financial aid package.

 
 

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