North Bay College Funding-Frequently Asked Questions

When should we start planning for college financial aid ?

When the child is born! Really! It is never too early to start planning. Savings and investment choices you make early on may effect your financial aid eligibility years later. Working with a college planner and tax advisor early could save you thousands in college costs later. Use financial and tax strategies to fuel both your college costs and your retirement as early as possible.

When your child is in their sophomore year of high school, you should finalize your college financial aid plan. The junior year is the tax year in consideration when filling out the financial aid applications in their senior year, so having a final plan in place during the sophomore year is important.

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Do I make too much money to qualify for financial aid ?

Income is only one factor in the financial aid formulas. There are a number of other factors weighing into the equation. Most families do not realize that even if they do not qualify for "need based" aid, their student may in fact qualify for merit aid which is based on academics, athletic or other talent, volunteer and community work, etc. If you don't apply for the need based aid, you won't be considered for the merit aid. You should always apply no matter your income. Your income may appear to be too high, but with other factors ruled in, you may in fact qualify for aid.

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Can we afford a private college ?

Maybe. Don't discount private schools solely based on price. The private schools have endowment funds to draw upon to offer better aid packages to students. When all is said and done, you may find that the private school is less expensive than the state school. Apply to both public and private colleges and compare offers. You may be surprised what kind of aid you get!

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How is need based financial aid determined ?

The financial aid formulas look at the income and assets for both the student and the parents to determine a dollar amount that your family should be able to put towards a college education. This is known as your Expected Family Contribution or EFC. Colleges use that figure to determine how much financial aid you may receive.

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Can my student declare themselves independent in order to get more financial aid ?

In order to file for financial aid as an independent student, they must meet one of the following criteria:

The student is a U.S. Armed Forces veteran.
The student is a ward of the court or both parents are dead.
The student is married.
The student is a graduate or professional student.
The student has legal dependents (other than a spouse) and is providing at least half their support.

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Should we put more assets in our child's name to help lower our expected family contribution?

This really will depend on your own family's financial situation. Since the students income and assets are counted at 35% and the parents only at 5%, it won't make sense to have a lot of assets in the kids names for most families. For some families who make too much to qualify for need based aid, may find that shifting assets into the child's name is a tax savings strategy for paying for college. A college planning specialist, along with your tax advisor, can determine which strategy is best for your family.

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Can I just get student loans to cover all the costs of college?

Federal loan programs have annual and lifetime limits that will most likely not cover all the costs of your child's education.

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Can't my student get enough scholarships to pay for college?

Private scholarships account for only about 1% of all the financial aid dollars available, so this may not be time well spent in searching down scholarships. Typically the money earned from scholarships will be deducted from your financial aid offer from the school so you wind up not gaining much in extra money from what you could have gotten from the school. If your school of choice offers no aid or federal loans, it may then be more worthwhile to spend time searching and applying for scholarships.

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Will a financial gift from the grandparents affect my child's financial aid award?

Yes it will. Often grandparents will set up trusts or savings accounts or buy savings bonds and put them in the child's name when they are born. Years later when they apply for aid, you will find that assets in the student's name will be counted higher than if it was in the parents name. Dollars given directly to the school from a grandparent could lower your financial aid offer by that amount. Each school may have a different policy. There are various tax and financial strategies to consider when gifting money for college costs that should be discussed early on with your tax advisor and a qualified college planning specialist who knows how financial aid works.

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Can't my tax advisor help me figure out my college funding needs ?

Yes and no. Your tax advisor will look at tax codes to help you figure out tax savings strategies which can be important part of your college funding strategy, but can also possibly backfire on you when it comes to qualifying for financial aid. A college planning specialist will know the financial aid codes and will work in partnership with your tax advisor to ensure all of your financial strategies work in your favor.

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Why do I need to use the services of a college planning specialist? Can't I just do all this on my own?

You certainly can do all the financial aid work on your own. There are some parents who do like to take the time to research all the schools financial aid histories, fill out the FAFSA, CSS Profiles, Institutional forms and direct their own appeals and negotiations with the schools. But what they may miss out on, just like when you hire a CPA to do your taxes to make sure you are taking advantage of all the tax rules, a college planning specialist will help to ensure you are taking advantage of all the financial aid rules. There is more to this than just filling out forms. Additionally, there are a lot of deadlines to keep track of and filling out these forms can be time consuming for families. Many people like the convenience and peace of mind of having all the paperwork done for them.

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