The FAFSA or Free Application for Federal Student Aid is the baseline form in which all financial aid is determined. The FAFSA determines a family’s EFC or expected family contribution. The EFC is based on parents economics: income, assets, age, and a few other factors. Your EFC is the amount of money the government expects you to pay every year to educate one child. Wealthier families my feel that filling out the FAFSA form can be a waste of time. I disagree...
The FAFSA can be used as a positioning tool and can lead to other benefits like merit aid. Here are five reasons why wealthy families should fill out the FAFSA.
A family demonstrates their ability to pay without needing any help. This may sound counterintuitive but schools are looking to build freshman classes with families who can pay for college and families who cannot.
To qualify for merit aid. Many schools will consider students for merit aid, which is not based on a families economics, unless they fill out the FAFSA.
To give kids “skin in the game” via federal loans. A family must fill out the FAFSA form for their child to obtain low interest rate federal student loans.
Because you just might qualify! Having multiple children in the household and/or multiple students going to college at the same time, improves your opportunity for need-based aid. A family with only one child might not qualify for any need-based financial aid but when you add two or three, the opportunity increases greatly.
Your situation might change. For better or for worse, life happens. People get sick, lose their jobs, get reductions in pay, etc. colleges have contingency plans to deal with these types of events.
If you should need help reviewing your financial situation to determine if filling out the FAFSA is the right strategy for you, please feel free to call or e-mail me. I am a college planning expert that teaches families how to pay for college in the most efficient way possible.