How much financial aid will you get? Use this tool to get an idea

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As college prices continue to rise, families are continuously finding ways to bring down the costs. This includes applying for scholarships, looking for part-time jobs and sometimes even choosing a less expensive school. All of these options might not work for every family, but one thing every student should absolutely do is apply for federal financial aid. According to a study by NerdWallet, 47% of 2013 high school graduates didn’t file a Free Application for Federal Student Aid (FAFSA), leaving over $2.6 billion in free federal Pell Grant money on the table.

There are a number of reasons why a student might not file a FAFSA. For starters, it’s not easy. In fact, the FAFSA has become so complicated that the Obama administration had to step in. Changes that take effect for students applying for the 2017-18 school year include being able to file the FAFSA months earlier and allowing all families to be able to use the IRS Data Retrieval Tool to automatically populate their tax information (currently this tool is only available to about 20 percent of applicants).

RELATED: How Obama’s new FASFA rules will change college savings

Another common reason students skip the FAFSA is because they assume their family makes too much money to qualify for financial aid. But this isn’t always the case. Financial aid awards are determined by calculating a student’s Expected Family Contribution (EFC) based on information the student includes on the FASFA. Simply put, the higher your EFC, the less financial aid you’ll get. But the EFC formula takes more than just income into consideration, such as the family’s assets and the number of children in the household applying for aid. What’s more, the way an asset impacts aid eligibility varies by type. The value of your retirement funds, for example, are not counted as assets on the FAFSA, but when you withdraw the funds to pay for college it will count as student income. A 529 plan, however, will be counted as an asset, but will not be counted as income when money is taken out to pay for college.

Your head may be starting to spin right now, but keep reading. You’ll want to estimate your child’s EFC to get a better idea of how much federal aid they’re eligible for. This will help you select the right school for your budget, and also set a realistic savings goal. But for most of us, trying to calculate our child’s EFC is not how we want to spend a weekend. Fortunately, Savingforcollege.com has an easy tool that can help you estimate how much aid your child will receive.

RELATED: How 7 different assets affect financial aid eligibility

The Financial Aid Calculator asks 10 questions regarding your family’s income, value of assets, ages of parents, location and size of household. Simply input these items and click “calculate” and you’ll have a better idea of how much the federal government expects you to be able to pay for out of pocket. No accounting degree required!

Before you start, make sure you have these figures on hand:

• Annual adjusted gross income of you, your spouse and your child
• Value of non-retirement bank and investment accounts (yours and your child’s)
• Value of 529 plans and Education Savings Account

And remember, this is just an estimate, but it can still help tremendously when planning for college. Once you know your child’s EFC, you’ll have a better idea about the type of schools you can afford. When you’ve narrowed down your selection, you can use Savingforcollege.com’s College Savings Planner to help estimate costs of specific colleges you’ll be applying to, including how much is typically awarded in grants and scholarships.

RELATED: I make too much to qualify for financial aid but I still need help paying for college