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Milliken: Tips to enhance financial aid packages

Michelle Milliken is a wealth adviser associate with Dorion-Gray Retirement Planning Inc.
Michelle Milliken is a wealth adviser associate with Dorion-Gray Retirement Planning Inc.

As a parent, fall brings the return of school supplies, homework, sports and thoughts of, “How in the world am I going to pay for college?!”

“Save early, save now” is of little comfort if your child is in high school and you haven’t saved enough. Although we can’t go back in time, here are a few tips even high-income earners can implement right now to enhance a financial aid package.

• Know your Expected Family Contribution, and use it strategically. Schools calculate the amount they feel a family can contribute to a student’s educational costs. The EFC determines a student’s financial aid package. Once you know your EFC, you can use it to search for schools that would give you the most aid. For instance, a student with a high EFC will not qualify for need-based grants or loans, so he or she should look at schools that provide merit-based scholarships.

• Shop around for schools and aid packages. About 58 percent of public university students and 89 percent of private college students receive grants or scholarships of some kind, so shop around for schools that provide the most aid based on your EFC. Every school has a net price calculator on its website that can help you determine what your real costs might be.

• File your Free Application for Federal Student Aid early. At many institutions, aid is given on a first-come, first-served basis. File as soon as you can after Jan. 1.

• Use your retirement funds for you, not your child. You are not required to include your retirement assets on the FAFSA. If you include them, it will raise your EFC. Also, remember that any withdrawals from your retirement accounts will be treated as income, again raising your EFC and lessening any aid you might receive. On the other hand, contributions to retirement accounts can lower your EFC if timed appropriately. Keep those funds for you!

• Pay down your debt. Debts not based on mortgages – such as college loans, car loans and credit cards – will not increase your chances in receiving financial aid. Using cash on hand to pay down these debts could be a good idea if you are concerned about your savings affecting your aid package.

There is no magic formula to reduce the cost of college, but these strategies might help bring that dream school closer to reality.

Send any questions to Dorion-Gray Retirement Planning Inc. by fax at 815-455-4989 or email at michelle@doriongray.com.

• Michelle Milliken is a wealth adviser associate with Dorion-Gray Retirement Planning Inc., 2602 Route 176, Crystal Lake. Securities are offered through Securities America Inc. Member FINRA/SIPC. Advisory services offered through Securities America Advisors Inc. Dorion-Gray is not affiliated with Securities America companies. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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