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Financial Aid and FAFSA Mistakes You Can’t Afford to Make

October 15, 20245 min read

Don't Make These FAFSA and Financial Aid Mistakes!

NOTE: Annapolis College Consulting is hosting a LIVE WEBINAR on November 13th  @7:30pmwith our financial consultant Ann Alsina of Covington Alsina. Register here. It will not be recorded: REGISTER

1. Relying on unqualified advice.
It’s tempting to listen to tips from teachers, friends, or even other parents, but be cautious. I once heard about a teacher telling students to skip applying for financial aid initially and only submit the FAFSA after they’re accepted. Wrong move! If you’re planning on applying for aid, say "yes" from the start and submit those forms early to stay on track.

2. Assuming you won’t qualify for aid.
So many families mistakenly believe they make too much to get any financial aid. In reality, you won’t know until you apply. Thousands of families who could have gotten need-based aid miss out every year just because they didn’t fill out the FAFSA. Don’t be one of them!

3. Not filing taxes before applying for aid.
FAFSA for fall 2025 won’t be available until December 2024 due to some technical delays, and you’ll need accurate financial data from your 2023 tax returns. Make sure you have those tax forms done before you sit down to apply for aid.

Deadlines are important, but different for certain students, states etc.

4. Missing key deadlines.
Thinking you should wait until your student is accepted to submit aid forms? Think again. Each college has its own deadline for financial aid, and missing it could cost you big time. Take 20-30 minutes to track each school’s deadline—it’s worth every second!

5. Skipping freshman aid and planning to ask later.
Some families think they can wait until later years to request financial aid. But many schools won’t be flexible if you decide to ask for aid after freshman year, and some may even delay assistance for a year. If there’s a chance you’ll need aid, apply upfront.

6. Not saving for college.
There's a myth that saving for college will hurt your financial aid chances, but that’s just not true. The penalty for savings in aid calculations is minimal—just 5% of what you’ve set aside. The earlier you start saving, the better off you’ll be when tuition bills roll in.

Choosing the right year to show your income is PARAMOUNT

7. Taking income in the FAFSA “base year.”
Your household income from the FAFSA base year is a key factor in determining financial aid eligibility. If you can, defer bonuses or extra income until the next year to lower your reported income and potentially increase your financial aid.

8. Misclassifying a 529 plan as a student asset.
When reporting a 529 plan, remember to classify it as a parent asset, not a student asset. This simple detail can make a big difference because student assets are penalized much more heavily in financial aid calculations.

9. Putting savings in a student-owned account.
While this might offer tax advantages, having savings in your student’s name can hurt your financial aid eligibility. Parent assets are assessed at a lower rate, so keep the savings in your name and maximize your aid potential.

10. Grandparents paying directly for college.
While it’s amazing for grandparents to chip in for tuition, be mindful. If the school uses the CSS Profile for aid, these contributions can be counted as student income and reduce aid eligibility. The FAFSA doesn’t ask for this information, so if your school only uses the FAFSA, you’re in the clear.

Divorced parents- a new way to show the primary parent's income

11. Misunderstanding who fills out the FAFSA after divorce or separation.
Starting in 2024-2025, the FAFSA will require the parent who provides more financial support to fill out the form—not necessarily the parent the student lives with more. Make sure you’re clear on who’s responsible.

12. Borrowing more than you can handle.
Student loans can make college possible, but taking on too much debt can cause problems down the road. A good rule of thumb: don’t borrow more than what your student expects to earn in their first year after graduation.

13. Ignoring federal student loans.
Federal loans are usually a safer bet than private loans, thanks to lower interest rates and better repayment options. The lifetime federal loan limit for undergraduates is $31,000, which is manageable for most students with a decent post-college salary.

14. Taking on excessive debt for a dream school.
Saying “we’ll make it work” for a high-cost college can lead to crippling debt. Parent loans tend to have higher interest rates and stricter repayment terms. Be realistic about what you can afford and explore schools that offer strong financial aid packages.

Make sure the JUICE is worth the SQUEEZE! Do not pay too much for college

15. Not reaching out to financial aid offices with questions.

Don’t hesitate to call the financial aid office if you’re unsure about something. They’re there to help, not to trip you up. And if you need more expert guidance, College Sharks is here to support you through the entire process.

Ready to get started? Visit [collegesharks.com](http://collegesharks.com) to take a bite out of financial aid stress and get the support you need.

We are powered by AnnapolisCollegeConsulting.com and work with students 1:1 and virtually all over the US and with expat students too!

If you want to navigate the college process by yourself but could use a little guidance...COLEGESHARKS.COM/MEMBERSHIP is the perfect partner at the perfect price. 

 

Your College Concierge

Lee Norwood

Your College Concierge

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