How does your child’s 529 Plan affect their Financial Aid? Happy morning everyone and welcome back to Finance Friday. The Free Application for Federal Financial Aid (FAFSA) becomes available on October 1st of each year and stays open until June 30th. It’s used to determine how much Federal Financial Aid a student is eligible for. Schools also use this to determine if the student can also get additional funding such as scholarships and work study programs. Many parents use these funds as the primary funds for their child’s education. Here are 3 tips to help you prepare ahead of time for maximum success:
Review your current Assets and complete the SAI
The Department of Education provides the Student Aid Estimator (SAI) to figure out expected family contribution. This includes both your taxed and untaxed income, assets and social security benefits. Completing the SAI will give you a clearer picture of how much aid the student may be eligible for and allow you to plan any large financial decisions in the near term.
Factor in all years you’ll be applying for aid
Consider that college students need to fill out a new FAFSA each year to remain eligible for aid. What if you have 3 children? You may have to fill these out for more than a decade. What happens when there’s a major financial decision in that time, such as selling or purchasing a property?
Be prepared as early as possible
The earlier that you start planning, the more room you’ll have for adjustments later on. With early preparation, you’ll be able to know ahead of time how your costs, SAI information and financial aid line up with any college savings accounts that you already have.
Remember to submit your questions and thoughts on our discussion to hector@hrcfin.com. Don’t forget to follow HRC Financial on Facebook and LinkedIn for more Finance Friday Tips and Insights.
Thank you again, have a great weekend and Happy Father’s Day to all the father’s out there!