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| 20 ways to get federal money for
college |
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13. Keep up
the course load
Maximizing aid eligibility means not only scoring an award, but
maintaining it. Federal programs such as the Pell grant are tied
to your child's student status, meaning that if he or she drops
a class, it could wind up costing more than a blemished grade point
average. To keep the money coming in year after year, read the fine
print and make sure that both you and your child understand the
course-load and grade requirements.
14. Work it
In work-study programs, student earnings are exempt from the watchful
eye of financial-aid officers. By landing a work-study job, your
child will not only be able to earn money throughout the school
year, he'll also be gaining professional training, networking contacts
and something to put on the resume besides "member of break-dancing
club."
15. Reduce capital
gains
Capital gains from stocks, bonds and mutual funds count as income
and could stand between your child and a fat aid check. If you're
thinking about selling your securities and redeploying that cash
into your retirement fund, a new home or paying off debt, Kantrowitz
recommends doing so no later than your child's sophomore year in
high school. "Sell two years prior to going to college so that
it occurs not in the base year, but the year before," he says.
"Two years before won't count against you."
16. Test yourself
Parents whose combined gross income is at or near the $50,000 level,
listen up: You could get free dough by proving it. Designed to benefit
middle-income households and those with special circumstances, the
simplified needs test ignores assets, as well as savings, when determining
financial-aid eligibility. To qualify for the test, combined wages
reported on the W-2 must be less than $50,000, and every family
member must be eligible to file a 1040A or 1040EZ form with the
IRS. To get your hands on a copy of the test, consult your accountant
or financial-aid adviser.
17. Perk up
The higher the family income, the lower the financial-aid eligibility,
but nobody ever said anything about perks. Instead of a raise or
bonus this year, try negotiating such perquisites as more flexible
hours, subsidized meals, extra vacation time, gym memberships, loan
forgiveness, tuition reimbursement or a better insurance package.
Such gifts that don't show up as income on your W-2 could wind up
saving both you and your boss cash in the end.
18. Report the
support
One of the few items parents can deduct is child support, that is,
if they remember to do so. "People tend to not read the [FAFSA]
work sheets and omit things like child support that reduces their
income," says Kantrowitz. "That can impact your financial
aid." Child-support payments made for any student outside of
the household are considered asset deductions and can be subtracted
directly from a parent's total income. Likewise, any support received
on behalf of the child must also be reported and counted as additional
income.
19. Use the
grandparents
Mom and dad are fair game for federal scrutiny, but grandma and
gramps are a different story. 529 plans held by grandparents are
not included when assessing a family's expected college contribution.
Encourage the grandparents to forgo graduation, birthday or holiday
presents to your child, and ask them to instead open and contribute
to a college savings plan instead.
20. Be honest
The fastest way to lose out on an aid package is by being deceitful.
"The formula is so heavily based on income, it's really hard
to think about ways to get around that," says Thomas. "You
can really get in trouble if you try to manipulate the formula by
hiding things." According to Finaid.org, schools are required
to verify one out of every three FAFSA applications and many choose
to verify all. Hiding assets or falsifying information can result
in financial penalties, loss of aid and, in some cases, jail time.
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