Maximizing Financial Aid and Admission Chances Lynn O’Shaughnessy

Ways to Maximize Financial Aid

Pay Attention to the

Calendar

Base year for financial aid has

always begun Jan. 1 of junior

year in high school, but this is

changing for FAFSA & PROFILE.

New rules for 2017-2018 school

year.

Prior-prior tax year new reality.

Clients can also file apps earlier.

The mechanics are straightforward, but implications aren’t.

Your clients’ finances will matter beginning in sophomore year in

high school.

1st base year: 2nd half 10th grade/1st half 11th grade.

Last base year: 2nd half freshmen yr./1st half sophomore

Finances won’t matter by second half of sophomore year in

college.

What Aid Changes Mean

Base Year

Maneuvering Too

Late for High School

Juniors!

Base year for juniors

is the 2015 tax year.

For parents taking a hit with prior-

prior tax returns…

They can ask for a

professional judgment

from colleges.

Your Clients Can Appeal

Pay Attention to the Base

Year

Try avoiding extra increases

in income starting in the 1st

base year including:

Retirement plan distributions

Employment bonuses

Exercising stock options

Converting UGMA/UTMA to

custodial 529 plan

Minimize Capital Gains

Capital gains treated

as income.

Try to offset capital

gains with losses to

reduce impact on aid

eligibility.

Pay Off

Debt

Be strategic when filing

financial aid forms

Must report value of assets as of the day

you file for financial aid.

File after paying bills or on a day the stock

market is down.

Clients should print out account

statements, as proof of the balances on

the day you file for financial aid.

Parent assets assessed at 5% to 5.64%.

Spend Child’s Money

First

Child assets assessed

more harshly for financial

aid.

PROFILE 25%

FAFSA 20%

Appropriate child

expenses

Can use student assets to

pay for such things as…

• Car

• Test prep

• Tutoring

• Camps

• Computer

• Private high school

Custodial Accounts

FAFSA schools treat a custodial 529 as a parent asset.

Custodial Accounts

Many PROFILE schools treat custodial 529 accounts as child asset.

Check to see how individual colleges assess these accounts.

Asset Impact

Keep in mind that parent

and child assets don’t

matter if clients have no

chance for need-based aid!

Assets usually have

minimal impact on aid.

Great Development for

Generous Grandparents

TO AVOID JEOPARDIZING

NEED-BASED AID:

Thanks to prior-prior tax

change, grandparents or

other relatives can safely

help beginning 2nd semester

of sophomore year in

college!

Other

Grandparent

Options

Grandparents can transfer

529 account ownership to

parents.

Grandparents can contribute

to 529 set up by parents.

TO AVOID JEOPARDIZING

NEED-BASED AID:

Divorce &

Separation

Understand the

rules for divorce

and separation.

Take Home Equity Into

Consideration

PROFILE schools

differ in how they

treat home equity.

Can appeal home

equity treatment in

aid award!

Apply for Aid Early

Some states have

early deadlines for

financial aid. Know

what they are.

Inquire if aid form is required to qualify for

merit scholarships.

Double Up

Having two children in college at once will reduce a household’s

Expected Family Contribution and boost financial aid chances.

Consider a gap year for an older child so siblings will be in college

simultaneously longer.

Understand how to evaluate a financial aid

letter.

Appealing an Award

“NEGOTIATE” Mention other competing awards.

Appeal even if seeking higher merit award.

Be specific about what you need.

Appeal home equity assessment.

Ask for a professional judgment.

Don’t use the word

Pick the right college!

Use Higher-Ed Tax

Credits

American Opportunity Tax Credit

is best..

Qualified parents can claim a

maximum of $2,500 for each

child in college.

Eligibility:

MAGI: $80,000 or < single

$160,000 or < married

*Parents who submit taxes as

“married filing separately” can’t

claim this tax credit.

Can A Child Be an

Independent Student?

It’s extremely difficult to qualify.

Here are some qualifiers:

The child is 24 or older.

Their child is married.

Their child is in the military or a

military veteran.

Their child is in graduate

school.

Their child has been in foster

care or a ward of the court.

Maximizing Admission Odds

Finding the Right Match: Preferential Packaging

University of Chicago Admission Factors

Admission factor source: COLLEGEdata

Ignore the SAT

and ACT

Roughly 850 test-optional schools.

> 40% of top 100 liberal arts colleges.

Smaller number of selective research

universities, but number growing.

Growing Number of Test-Optional Schools

Sampling of Test-Optional Liberal Arts Colleges

Bowdoin College

Lewis & Clark College

Wesleyan University

Smith College

University of Puget Sound

Dickinson College

Bryn Mawr College

One Option for So-So Test Scores

Test-optional schools: FairTest.org

George Washington University

American University

Catholic University

Wake Forest University

Loyola University Maryland

Ithaca College

Rollins College

Fairfield University

Worcester Polytechnic Institute

Test-Optional Universities

Test-optional

policy

benefits

affluent

students

Cherry pick

scores

SAT and ACT Cherry-Picking

Schools still superscore SAT more than ACT.

EXAMPLE: CHERRY-PICKING RESULTS:

Use Talents as Leverage ACTING, ART, LEADERSHIP, SINGING, VOLUNTEERING

Identify Talent Scholarships

at Cappex.com:

Honors Scholarship

Music Scholarship

Presidential Scholarship

Robbins Eagle Scout/

Gold Award Scholarship

Scholarships for National Merit

Scholar Designees

Science Scholarship

$14,000

$3,000 - $5,000

$18,000

$3,000

$20,000

$3,000

Elite Schools:

Class Rank

Elite schools look for students in

top 10% of their class because

U.S. News cares.

High schools that don’t rank doesn’t

deter admission offices.

Increasing Admission Chances

Through Early Decision/Early Action

Use Gender as Leverage

Women represent 57% of college students

Girls have advantage at

science/tech schools, boys at LAC’s

MIT accepts 9% Male and

22% Female applications.

Engineering School Acceptances

Increasing Engineering Options:

3-2 Engineering Programs

Liberal Arts College

+

Engineering School at University

Feeder Schools:

Columbia University

Washington University

Engineering School Acceptances

School Men Women

Olin College

Harvey Mudd

Cal Tech

Carnegie Mellon

RPI

Lehigh U.

19.5% 74.5%

17% 48%

9% 23%

28% 34%

38% 44%

36% 40%

Advantage for Wealthy Students

Racial Diversity

Show Demonstrated

Interest

Growing number of schools say

demonstrated interest is important

How to show interest:

Ask for materials.

Visit school.

Email admission officer.

Join college chats.

Visit school’s Facebook.

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Picking Schools by Size

Don’t Just Look at Research Universities

Small Schools

Medium-Sized Schools