5 More BIG Mistakes Most Parents Make When Applying For Help To Pay The College Bill...

Mistake #1: Most middle and upper-middle class parents assume they get any  financial aid because they own a home and make over $40,000 per year.

Reality:  Most families with incomes ranging from $40,000 - $100,000 per year who own homes are eligible for some form of financial aid. You just have to know how to get your "fair share".

Unfortunately, most parents get frustrated before they even start and assume they won't be eligible. This is exactly what the government hopes you will do so they can keep more of these funds.

Don't make this mistake! If you don't apply at all, you're sure NOT to get any money.  But, if you apply, you're likely to qualify for some help to pay the bill.

Mistake #2: Assuming all schools are created equal and will be able to give you the same amounts of money.

Reality: All schools are not created equal and will not be able to give you the same financial aid packages. Some schools have more money to give out and are generally able to meet most or all of a student's financial need at their school.

Other schools, like state universities, get very little in private funds and rely mostly on state and Federal funds to help fill a student's need at their school.   These schools leave students short and give them less money than they are eligible to receive.   It can actually end up costing you more to send your child to a "cheaper" school if they don't have the money to meet your need.

It is very important that you know each school's history of giving money before you ever apply, so you're not blown away when you get a bad financial aid package from your child's top school choice.

Mistake #3: It doesn't matter where I keep my money; it's all counted in the same way.

Reality: Nothing could be further from the truth. Where you keep your money could mean the difference between you getting $10,000 in financial aid or getting nothing!   If you don't know how to legally and ethically position your money properly for purposes of financial aid, you could end up losing thousands in financial aid!

Mistake #4: "My CPA or tax preparer is qualified to fill out my financial aid forms - I'll let him/her do it."

Reality: Unfortunately, CPA's and tax preparers are experts at tax planning and preparation - not financial aid planning. Many strategies that can save you money on taxes can backfire on you during the college years.  For example, a CPA or tax preparer might suggest that you put some or all of your assets in your child's name to save money on taxes. While this advice is well meaning, it will usually kill most or all of your chances of getting financial aid.

Also, CPA's and tax preparers are not trained in filling out financial aid forms. In many cases, they will unknowingly fill out these forms improperly and these "minor" mistakes will bump your financial aid forms. If this happens, you will have to re-submit these forms all over again, and you will probably end up losing thousands in financial aid since it is awarded on a first come, first served basis.

Mistake #5: Waiting until January, or even worse after January, of your child's senior year of high school to start working on your college financial aid planning.

Reality: Since financial aid is based on your previous year's income and assets, it is imperative to start your planning as soon as possible before January of your child's senior year.

If you want to legally set up your income and assets so you can maximize your eligibility for financial aid, you must start working on this, at least, one year in advance - preferably in the beginning of your child's JUNIOR year of high school.

The longer you wait and the closer it gets to your child's senior year, the tougher it gets to set up your financial picture without creating a "red flag" for the colleges and universities.

It is also important for you to know what your "Expected Family Contribution" is so you can start saving for it. And, you should also know which schools can give you the best packages before you start visiting and applying to them. My advice is if you haven't started planning, DO IT NOW!

Mistake #5.5: "I Can Do This Myself, It's Cheaper".

Reality: If this describes you, the colleges and Federal Government are going to love you! This allows them to keep control over the process instead of you, the parent, understanding how the process works and taking back control from them. 

You go to a doctor when you're sick, you'll hire a lawyer to plan your estate or defend you if you're sued and you'll hire a financial planner to help plan you're retirement.

You are looking at spending anywhere from $10,000 to as much as $50,000 to send your child to college.  We're not talking chump change here!  Now is not the time to save yourself a couple of dollars and do it yourself.

I recently had a father realize the error of that thinking. He thought he'd "save the money" it would have cost him to hire me to help his student and himself properly plan for college.  A year and a half later, he was back in my office wondering why he had to borrow $25,000 for his son's FRESHMAN year.  He still had 3 more years left AND two more sons to get through the process!

Bottom line, unless you spent the last 5 - 10 years of your life studying and understanding the college admissions and financial aid process, there is no way you are going to know how to maximize your opportunities to get NOTICED, get IN and get the maximum amount of MONEY from each school.

And, if you do try it yourself, you'll probably spend countless hours trying to figure it out. The moral to this story is "Don't Be Penny Wise And Dollar Foolish!" Use an expert who can help you through this process and make sure you get everything you're entitled to.