Why Everyone Should Apply for Financial Aid: Making Smart Financial Decisions
At Ivy Ridge Asset Management in Rhinebeck, our certified financial planners understand how important your child’s education is. Sending a child off to college can be a fun and exciting time, especially for the student, however many parents worry that they will not be able to financially afford their child’s college tuition. If you’re struggling to come up with ways to cover the high cost of college tuition, it’s important to know that you’re not alone. Unlike high school education, college education is not an entitlement, so the government does not guarantee anyone the right to an affordable program. Fortunately, there are a variety of financial aid options available to assist parents and students with these financial barriers and a professional financial advisor can help you navigate through the intricacies of it all.
Financial Planners Can Help With Financial Aid
Did you know that public and private colleges have different formulas for determining how much money your family can afford to pay for college? Public schools utilize a formula known as Federal Methodology which is provided by the U.S. Department of Education to calculate expected family income, as it pertains to student financial aid. Depending on your individual financial circumstances, the Federal Methodology will use one of three models to determine how much financial aid you are eligible to receive. The government will take note of your income and assets to calculate this number, but they will not consider assets such as a retirement account or equity that you have built up in your home.
Understanding Financial Aid: Merit-Based vs. Need-Based
Before you apply for financial aid, it’s important to understand the differences between merit-based and need-based financial aid. Merit-based aid is based upon the academic achievements and performances of a particular student. Scholarships are among the most popular type of merit-based aid. Need-based aid, on the other hand, solely takes into account you and your family’s ability to pay for the cost of college tuition. This type of financial aid is often accompanied by private and federal student loans and grants.
Applying For Financial Aid
In order to find out how much financial aid you are eligible to receive, you must complete the Free Application for Federal Student Aid, also known as the FAFSA. Based off of the numbers on your FASFA, the government will calculate how much money you can afford to pay for one year of college, also known as your Expected Family Contribution (EFC). This number will be a determining factor when it comes to future student loans and grants, so it’s critical that you fill out your FASFA correctly.
At Ivy Ridge Asset Management, we understand how tricky and time consuming filling out a FASFA can be. If you need assistance applying for financial aid, or have questions regarding your EFC, contact our certified financial advisors today. We will walk you through the financial aid application process to ensure your financial history has been logged correctly so you receive the financial aid you deserve.