If you are looking to refinance student loan down the road, you might be able to benefit from our financial aid tips right now. Here are some pointers on how to maximize your financial aid eligibility.
- Start early. The financial aid process is time-consuming and arduous, so it will help to start on it as early as possible. Even in high school, there are things parents and students can do to prepare. Start looking into scholarships and fill out the FAFSA as soon as possible.
- First come, first served. The sooner you fill out the FAFSA, the better. Schools only have a limited amount of aid they can give away, and those who apply first will get first dibs on the award pool. Don’t make the mistake of waiting for your tax return to file the FAFSA. Instead, estimate your tax information and file an amendment to the FAFSA later. You can trim weeks off of the FAFSA process by applying online.
- Be as accurate as possible. This is good advice whether you’re applying to refinance student loan or filling out the FAFSA. Review your application for accuracy and make sure you submit it correctly. Your FAFSA will be returned to you if it contains significant errors or is missing information.
- Save for college. Even though your family’s assets will influence your eligibility for financial aid, it still is in your best interest to save for college. With the FAFSA, only about 6% of a family’s assets and 20% of a students assets are considered available for contribution toward your education. That means that savings will only reduce your financial aid by a negligible amount. As a student, you will have to contribute something toward your education, and it is easier to pull this contribution from savings than from credit cards. Remember that you can also refinance student loan eventually to save yourself money.
Because you are expected to contribute 20% of your assets toward your education, you will have to contribute less if you have less money. In other words, it could be a good idea to spend down your assets for big ticket purchases before you submit your FAFSA. Try to pay for these big purchases with your money or with assets in your name instead of your family’s.