Now that you know how the financial aid process works, it’s time to start figuring out how to take control of that process—and prevent the process from taking control of you.
If you have read Part One of this book, then you have already taken the first step toward this goal:
The college FAOs don’t really want you to understand all the intricacies of the financial aid process. If parents don’t know what’s going on, they can’t ask embarrassing questions, and they will accept whatever the FAOs tell them.
We know of one case in which a financial aid officer from a private college told a parent who had called asking for an increase in aid, that “our hands are tied. Federal regulations prevent us from giving you any more money.” The parent, not knowing any better, accepted this as the truth. In fact, it was a bald-faced lie. Almost all colleges (and this one was no exception) hand out their own grants, funded by private funds, which are not regulated by federal law at all.
Another thing parents are often too willing to accept at face value is the initial financial aid offer by the college. In a recent trend, many schools (particularly the most competitive) have begun to build some bargaining room into their initial offers. They expect you to ask for more. In many cases, accepting that first offer means taking a lower number than the FAO was willing to give. These are just two examples of the facts you will learn in the next few chapters—facts that will enable you to understand and begin to take control of the financial aid process.
Parents whose children are several years away from college will find the next chapter on long-term planning particularly useful. In it, we will show you how to begin building a fund for college that will take advantage of both tax law and financial aid law. Families who are getting ready to apply to college should skip long-term planning and go directly to Chapter Three on short-term strategies. There we will begin to show you how linking your income tax strategies and your financial aid strategies can save you big bucks. We will show you how the colleges assess your income, your expenses, your assets, your liabilities, and how to influence these assessments to your advantage.
A word of caution, before we begin.
In the course of counseling thousands of families, we’ve seen how confusing financial aid jargon can be to the nonprofessional. Just remember, the FAOs don’t mind if you are a little confused. In fact, they would prefer it. And since they have a large influence on the instructions that come with the aid forms you will have to fill out, it shouldn’t surprise you to learn that the instructions to the forms are confusing and full of unfamiliar terminology as well. The introduction to one particularly confusing financial aid form states that some questions are “self-explanatory, and therefore no instructions are given.”
Don’t worry. By the time you finish reading this book, the jargon will be second nature. At the back of this book is a comprehensive glossary; feel free to refer to it at any time.
To avoid confusion, we have taken care to use the same terminology used by the need analysis companies and the IRS. Even though it seems a little ridiculous to refer to certain deductions as “unreimbursed employee expenses,” we did so anyway, just so that you will know what the terms mean once you start completing the forms and negotiating with the FAOs.