FAFSA Tip: Should You Put Assets In Your Child’s Name?

BIGGEST FAFSA MISTAKE

Stocks, bonds, real estate investments, money in checking and savings accounts, and other assets are very valuable to have. I am a huge advocate of parents teaching their children early on about these things. It is even better if the children learn how to and actually invest in these assets themselves.

However, it is NOT a good thing when it comes to filling out the FAFSA and other financial aid forms for college.

 

Assets that are in the student’s name will get penalized heavily when it comes to the FAFSA and other financial aid forms. When it comes to financial aid from the FAFSA form, 20% of the student’s assets will be counted in the FAFSA’s financial aid calculations as opposed to only 5.64% of the parent’s assets being counted in the financial aid calculations on the FAFSA form. This is a difference of nearly 14%.
Also, parents can “protect” some of their assets. This means that the FAFSA form will not count a percentage of the assets at all when trying to determine the amount of financial aid that the student will qualify for.

Overall, putting assets in the students name versus the parent’s name could be the difference between your child qualifying for some financial aid through the FAFSA form and not qualifying for any financial aid.

Money Saving Tip for Your Master's Degree

By: Shanice Miller, founder of DebtFreeCollegeGrad.com

Have you ever thought about getting your Master's degree?

If you have, you have probably started looking at the fees associated with it. A Master's degree can be

pretty expensive for only two years worth of education. For example, if you want to get a Master's degree at Harvard University, you can expect to pay $40,000 per year for only tuition--- this doesn't include room and board or other fees. Usually it takes 2 years (sometimes more) to complete your Master's degree so you are looking at $80,000 total at the very least. That will be a lot of money, especially if you already have a student loan tab from your undergraduate degree.

To help decrease the costs associated with obtaining a Master's degree, I am going to share with you a money saving tip for your Master's degree.

One money saving tip for people that are thinking about getting a Master's degree is to get the Master's degree overseas. Usually the Master's degree programs overseas only take 1 year to complete. That means even if the tuition is still the same, you would only have to pay $40,000 versus $80,000 for your Master's degree in the United States so you already saving 50% of the cost. However, tuition is not the same. In addition to the overseas Master's degrees taking less time to complete, they are also cheaper.

Although going overseas to get a Master's degree will be cheaper and quicker, you might want to check with your potential employers first to make sure that they will accept it.

Parents, Are You To BLAME for Stafford Loans?

In the last post titled, "Parents, Are You To Blame for Student Loan Debt," we discussed the rapidly increasing amount of student loan debt through Stafford loans.

There we posed the question: who is actually to blame for all of this student loan debt that has been accumulating over the years through Stafford loans. If you didn't get to read the first part of the article, you can view it here.

In this continuation of the article, we will further discuss the student loan debt crisis and who is to blame for all of these Stafford loans.

Reminiscing back on my college days, I remember a particular roommate that my friend had. Right after the semester started he was so excited because he was getting money back from the college. Yes, refund checks are wonderful. But, not this refund check. See this student wasn't getting a refund check back from an abundance of scholarships, he was getting a refund check back for an abundance of loans--- Stafford loans! Now that isn't good at all.

Right now some people might be wondering how can that be. Let me explain. When you sign up for Stafford loans or any other loans, you can either chose to sign up for the maximum amount that you are eligible for or you can just opt to take out what you need. Now some people would take out the maximum amount of Stafford loans to use for other expenses like books and living expenses.

This particular student would take out the maximum amount of money that he qualified for in Stafford loans. He would use some of the Stafford loans on books, but with the rest of it, he would buy things that made him happy like clothes, video games, or the latest phone. At the time he just saw it as "free money" but that "free money" was actually a debt tab that he was quickly increasing.

I'm pretty sure he wasn't the only student that did this. Parents, students do NOT need to take out the maximum amount of money that they qualify for in Stafford loans or any other student loans. You should only take out what is necessary to cover tuition and the school fees--- nothing more. Taking Stafford loan money and using it for the child's pleasure is a sure way to be swimming in debt upon college graduation.

In the next post, we will follow up on one last reason why we have a student loan debt crisis and how you can avoid your student from being part of that statistic so stay tuned!

By: Shanice Miller, Founder of DebtFreeCollegeGrad.com