Paying for college is one of the biggest financial challenges families face. Financial aid can make higher education more affordable, but only if families avoid common mistakes. Many parents and retirees helping grandchildren unintentionally lower the amount of aid available. Small errors on forms, missed deadlines, or misreported assets can cost thousands. Here are seven college-aid mistakes that shrink awards and make tuition even harder to cover.
1. Missing FAFSA Deadlines
The Free Application for Federal Student Aid (FAFSA) is the gateway to grants, loans, and work-study opportunities. Families that miss deadlines lose access to large portions of aid. Some states and schools award funds on a first-come, first-served basis. Retirees helping with applications should mark deadlines carefully. Missing them can cost more than any other mistake.
2. Overreporting Assets That Don’t Count
Certain assets—like retirement accounts—aren’t counted in aid formulas. Families who mistakenly list them on the FAFSA reduce their eligibility unnecessarily. Retirees especially need to double-check this detail. Including exempt assets makes households look wealthier than they are. Accurate reporting protects aid eligibility.
3. Putting Student Assets Ahead of Parent Assets
The FAFSA formula weighs student-owned assets more heavily than parent-owned ones. A $10,000 savings account in a student’s name hurts eligibility far more than the same money under a parent’s control. Families should consider shifting funds strategically. Retirees supporting grandchildren can help by structuring gifts carefully. Ownership matters as much as amount.
4. Forgetting to Update Family Size or Dependents
Household size and number of students in college play a major role in aid eligibility. Families who fail to update this information risk lower awards. Retirees raising grandchildren or supporting dependents may forget to include them. Each additional dependent can improve eligibility. Accurate household reporting maximizes support.
5. Avoiding the FAFSA Entirely
Some families assume they earn too much to qualify for aid and skip the FAFSA. This mistake eliminates opportunities for need-based and even merit-based aid. Many scholarships require a completed FAFSA regardless of income. Retirees encouraging grandchildren should always recommend filing. Leaving it blank closes doors unnecessarily.
6. Misreporting Income Timing
The FAFSA uses “prior-prior year” income, but families often misreport or fail to plan for timing. Large withdrawals from retirement accounts or one-time income events can inflate reported income. Retirees should be cautious about when they take distributions. Poor timing can reduce aid eligibility dramatically. Planning ahead avoids surprises.
7. Not Appealing Awards When Circumstances Change
Colleges allow families to appeal aid decisions if financial circumstances shift. Retirees dealing with medical bills, caregiving costs, or unexpected expenses may qualify for more aid. Families who don’t file appeals leave money on the table. Schools won’t know unless asked. Appeals can turn “no” into “yes” for additional support.
Why College-Aid Strategy Pays Dividends
College is expensive enough without making mistakes that reduce aid. Families who meet deadlines, report accurately, and structure assets wisely secure stronger awards. Retirees helping children or grandchildren can make a big difference by guiding the process. Financial aid strategy is as important as a savings strategy. Careful attention now pays dividends for years to come.
Have you helped a child or grandchild apply for aid? Which mistake do you think families overlook most often?
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