Are there financial aid strategies for junior year high school parents? Due to the financial aid change called Early FAFSA or Prior Prior, the junior year is more of an academic preparation time rather than a financial planning time. This is due to a significant change that began in 2015 with the Department of Education FAFSA timing decision.
The Prior Prior change will begin on October 1, 2016. This change allows you to start the FAFSA on October 1 each year and will use the tax year prior. For parents of Junior high school students, the base tax year for financial aid is second semester sophomore year and first semester junior year. The FAFSA will not need to be submitted until October of their senior year.
Many families do not realize that the school year and tax year do not match up. This is the reason why advanced planning is required. If you have already started, your college funding plan, congratulations. For those who have not yet started to plan, it is not too late.
It is never too late to start college planning since this is an investment of normally four years and should be reviewed each year. By proper planning, you are better able to maximize the financial aid process and other family resources to minimize your college cost.
A big mistake many families make is thinking that financial aid is the only way to lower the cost of college. There are strategies that can lower a family’s cost that are not financial aid driven. For middle income, higher income and business owners these various strategies can provide thousands of dollars in annual savings, if planned correctly. Most families believe the college financial aid directors have all of the answer which is not true. Many of these advanced strategies are personal financial issues that the college financial aid directors cannot discuss. At the same time, be leery of financial advisors trying to sell you financial products that are directly related to financial aid positioning. These proposed college financial solutions should be part of your entire financial plan before investing. Make sure you get the correct help in your college funding strategy.
Before you start, a family will need to understand their financial aid position and this is determined by knowing your Expected Family Contribution or EFC. This number is a calculation generated by completing the financial aid forms. Most people think this is one number but it is actually the sum of four separate calculations. Knowing the EFC parts is critical when developing a proper college strategy.
It is yet to be seen but over the next few years, we could see a compression of time in the college financial aid, application, acceptance and award letter process. Some colleges will be prepared to offer acceptance with award letters as early as November with this Early FAFSA change. This will have an effect on Early Decision and other processes over the next few years.
The financial aid strategies for junior year video covers:
College List Building
Myths of Financial Aid or Prior Prior