Financial aid basics

Financial Aid Considerations

[Excerpted from’s Family Guide to College Savings]

By now you're probably thinking that the financial-aid system is as complicated as the federal income tax, and that might be right. The summary presented here only scratches the surface. Navigating these murky waters may seem difficult, but remember these four basic points:

  1. No matter what the rules say, college financial aid officers have great latitude in determining the aid package your child ultimately receives. Officers sometimes use "professional judgment" to adjust the figures - increasing the amount of aid or creating a more attractive ratio between gift aid and self-help aid. They might be more apt to do so if they see other reasons to want your child, such as special abilities or unique characteristics.
  2. The rules are constantly changing. The way the financial aid system works today may not be the way it works when your child is ready for college.
  3. Your investment decisions now do not necessarily lock you in for purposes of future financial aid eligibility. You will likely have many additional opportunities to enhance your child's prospects for aid.
  4. Saving for college reduces your reliance on an uncertain financial aid system. Some families make the mistake of spending because they believe that saving puts them in a worse position to receive financial aid. Planning and saving for college helps you control your family's destiny no matter what the future brings.

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