Top 7 Mistakes to Avoid When Paying for College

#1: Relying on the financial aid office.Financial aid officers work for the college, not for you. Enough said.

#2: Not planning ahead.By the time you are in the college financial aid office, it’s too late to make necessary changes to your taxes and asset allocation to affect your aid package. Your tax return during the fall of your child’s junior year of high school will be used to determine your aid eligibility. The most financial aid also goes to the first in line and when it’s all distributed, it’s gone. Be early.

#3: Assuming that you can only afford the cheapest collegesIt is entirely possible that it could cost your family less to send your child to a pricey private college than the local state university. Don’t judge the costs by the listed tuition; you have to judge by the aid package you actually receive.

#4: Going too far into debt.Unless you want your child to be living in your basement for the next decade, you are going to need to limit the amount of debt assumed to finance a college degree.

#5: Forgetting about RetirementMoney that is used to pay for college can’t be used to fund your retirement or pay off your house. College planning and retirement planning go hand in hand.

#6: Neglecting to negotiate.College costs are a lot like buying a car: the sticker price bears little resemblance to what you will actually pay. Aid packages are not set in stone and can be appealed. Two families with identical financial aid profiles can wind up with completely different financial aid packages, depending on how they position themselves. Remember that a college’s financial position can change as some students turn down offers, potentially freeing up money for you.

#7: Leaving assets vulnerableOn the federal financial aid form, some assets are “assessed” and others are not. Knowing which is which can protect your assets, reduce your costs, and maximize the aid you receive. Some traditional accounting advice that helps you save on taxes will destroy your chances of receiving financial aid for college and will limit your child’s educational options. When it comes to financing college, the more you know, the less you pay.