 | Varsityedge.com recently sat down with Certified Financial Planner and Director of Money4College123.com - Keith Kolinsky - to talk about financial aid and how his product/service assists parents and students through the financial aid process. For any parents that will be going through the financial aid process, I highly recommend you look at the money4college123.com program. |
1. What is your background in the Financial Aid Process?
I’m a practicing Certified Financial Planner since 1984, Registered Investment Advisor and maintain an income tax practice. I’ve been working with money, financial aid and FAFSA for over twenty years and have been a financial aid keynote speaker for the International Association of Financial Planners in seven states throughout the country, New York State Society of CPA’s and The Regional Bar Association of CT to name a few.
2. What are some common misconceptions you see in the Financial Aid process?
1. - I shouldn’t apply for financial aid because I make too much money. Everyone should apply. Many schools will not consider you for their Institutional merit money until they are sure you did not qualify for Federal and State financial aid. Many schools need to fill empty seats and are willing to give financial aid to affluent families instead of having empty seats to get most of the tuition vs. none.
2. - I shouldn’t apply for financial aid because of all the equity in my house. Over 90% of colleges and the Federal and State governments do not include the equity in your home when determining your financial need. You can apply only to those colleges that do not include home equity.
3. - If I have financial need I’ll get a lot of financial aid. Most of the big financial aid packages come from a school’s endowment money and not the Federal and State governments. Therefore, you must understand the financial aid history of the colleges you are considering before applying to the school and not just sit back and wait for the financial aid offer in April. After all, what good is it if you have a lot of financial need and the schools you are applying to have very little money or a history of meeting financial need with little in grants and scholarships and only loans?
4. - All I have to do is complete the FAFSA (Free Application for Federal Student Aid) to get financial aid. The FAFSA is only one part of the financial aid process. The real question is do you want to get some financial aid or the maximum amount the law allows? To get the most money possible you must take a very proactive approach to financial aid. You must understand what you can do with your family income and savings before completing FAFSA; understand the financial aid history of the colleges you are considering; understand how the student’s position to the incoming class will impact financial aid; correctly complete the FAFSA; understand how to persuasively negotiate a financial aid offer for money.
5. - My school Guidance Counselor will help me get financial aid. Guidance counselors work very hard and have many different tasks to do in school. When it comes to college, their primary job is to give you input on colleges you should consider and getting your applications, letters of recommendation and transcripts out to the colleges. Guidance counselors are not trained in financial aid and everything you can do to maximize financial aid.
3. What are some common mistakes parents make when filling out the FAFSA form?
1. Not understanding how the FAFSA formula works. There are many ways to increase your financial aid eligibility, which is based on the formula Cost of Attendance minus Expected Family Contribution equals Financial Need. By understanding what you can exclude from formula you can dramatically increase your financial need.
2. Waiting too long to prepare their income and savings. I see it happen every year. Parents of High School Seniors panic and start looking for help in January of senior year. It is always best to start implementing strategies during September through December of junior year. This allows you to make changes in your finances that will not appear on the tax return colleges will be looking at when financial aid is awarded.
3. Leaving questions blank, writing in the margins, attaching other information to the FAFSA, missing signatures and incorrectly leaving out or including a parent’s information.
4. When should a family realistically start planning for the Financial Aid process for college?
The beginning of junior year in High School is the best time to focus on financial aid. Unfortunately, most parents don’t start paying attention to financial aid until they attend the financial aid night at their school in senior year or when they enter panic mode as to how they are going to pay for college.
5. Tell us a little about the PROFILE form.
The Federal Government requires every student to complete the FAFSA to be considered for Federal financial aid. Most colleges use this information to decide if they will award additional financial aid.
The CSS PROFILE is another financial aid form that is used in addition to FAFSA by approximately 350 colleges. Unlike FAFSA the PROFILE is not free. The purpose of the PROFILE is to dig deeper into the finances of the student and parents before awarding any of the college’s money in financial aid.
Similar to FAFSA, PROFILE will use the financial information submitted and do an expected Family Contribution based on its formula. Due to the differences in the FAFSA and PROFILE formulas you can have two very different Expected Family Contribution amounts. Typically, a college will use the higher Expected Family Contribution when determining financial need.
Therefore, it is important to know how each of the formulas work, what you can do to lower your Expected Family Contribution under each formula and which formula your colleges use.
6. Do you find that many parents are so intimidated by the Financial Aid process, that they fail to do even the basic steps that can help them?
Unfortunately, most families send in their FAFSA late, just follow the directions on the form and hope they will get a good financial aid package. People tend to procrastinate and are poor planners. Studies have shown that people put more time into planning their vacation than their retirement.
The financial aid process is very confusing and parents don’t know where to get the information they need. Without guidance it is a very overwhelming process. Therefore, most families skim the surface of the process and get far less financial aid than they’re entitled to.
Worse yet, many families don’t get involved with the process at all for two reasons. The affluent ignore FAFSA and frequently miss out on a lot of financial aid because they don’t want to bother or were told don’t waste your time. Many low-income families don’t complete FAFSA because they don’t have the help to do it and are walking away from thousands of dollars in free PELL grant money.
7. What other aid and loan programs are available that families are not familiar with?
Many families are not aware of PELL grants and Supplemental Educational Opportunity Grants (SEOG), which are awarded based on your Expected Family Contribution from FAFSA. Stafford Loans are taken out by students to help pay for college. If parents need more loans beyond Stafford loans they may apply for Parent Loans for Undergraduate Students (PLUS), which can be taken out to meet the full cost of attendance for a college.
Many families put a lot of time into chasing down outside scholarships. Approximately 98% of all financial aid comes from the Federal and State Governments, Tax Credits and college endowments. Less than 2% comes from outside scholarships. Therefore, you want to focus on the 98% and to after the other 2% after you’ve done everything possible to get the most out of the 98%.
8. Describe your money4college123 program briefly.
Our program is an easy to use online coach that takes parents and students by the hand through the financial aid system. Some of the more important points are:
1. How to position a student to get more financial aid.
2. Understanding the financial aid history of colleges before you apply.
3. Lowering your Expected Family Contribution to qualify for more financial aid.
4. Simple line-by-line instructions to correctly complete FAFSA and PROFILE
5. Proven and tested letters to negotiate financial aid packages
6. Non biased information on loans
7. How to go after and win outside scholarships
9. What are two or three key features of your program that can really aid parents in the financial aid process?
Money4college123.com saves parents time, money and reduces stress. Our program brings together everything students and parents must do to maximize financial aid in one place.
Our system sends emails to parents and students on the appropriate date as to what needs to be done, and how best to do it. It keeps everyone focused and pulls them through the entire financial aid process.
As everything is provided through our website, frequent updates throughout the year always provide the most current information and the ability to stop, catch-up or go ahead as needed by any client.
10. Do you provide any financial aid data on colleges throughout the country?
Within our program we currently provide information on 2,635 colleges. You can instantly see what the financial aid history of a college is, current cost, approximate your financial aid package and more.
11. As part of your money for college 123 program, can people contact you with specific questions they may have throughout the financial aid process?
If a family has a question that is not covered in the program they can always e-mail their question to me. It’s rare that questions come up at this point. Having provided our service online for 5 years, any time a question was asked it was further clarified within the program.
12. When should someone register for your program?
Any time from junior year in High School through college.
For more information, please visit - money4college123.com
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