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Save Money By Avoiding These Financial Aid Mistakes
By Catherine Groux
Posted September 20, 2012 10:00 AM
Students should carefully research their financial aid options.When students search for financial aid to pay for their associate's or bachelor's degree, they will probably learn they have plenty of options to make college more affordable. However, if they do not do their homework, they might find they end up spending more on school than they have to.
Below are the most common mistakes students make when searching for financial aid, as well as how they can avoid them to make higher education as affordable as possible.
Making Errors on the FAFSA
Every year, students should fill out the Free Application for Federal Student Aid, or FAFSA. Completing this form can give students access to important types of federal financial aid, including scholarships, grants, work-study jobs and loans.
Given the importance of the FAFSA, it is crucial for students to fill out the form correctly, as even the smallest mistake can lead to a huge cut in the funds applicants receive. According to FinAid, most students make mistakes when answering questions about adjusted gross income, total income tax, social security number and marital status. Leaving a question blank is another common error.
To avoid making these mistakes, students should make sure they reread their FAFSA applications to check for errors, and if they are confused about a question, they should contact their college's admissions or financial aid office.
Guessing How Much Schools Will Offer in Aid
Some students just assume they will receive a certain amount of aid from a college, which can often leave them disappointed and limit the schools they choose to apply to. Rather than guess, degree seekers should use a net-price calculator, which is available on most colleges' websites, the Wall Street Journal reports. After entering data about their income, assets and family size, this tool can tell students how much they will probably have to pay to attend the school, taking aid like work study and scholarships into account.
Still, as these calculators are not always fully accurate, Mark Kantrowitz, publisher of FinAid, told the Journal students should always apply to a safety school they know they can afford, regardless of how much aid they receive.
Choosing the Loan with the Lowest Interest Rate
When students look into loans, they may be tempted to accept the one that offers the lowest interest rate, regardless of whether it is federal or private loan. Although private loans sometimes offer lower interest rates, Alex Bickford, senior manager of college finance at College Coach, told the Journal that federal loans are almost always better than private loans.
Sometimes, under variable-rate options, the interest rate on private loans can rise before students pay them back. Additionally, if degree seekers find themselves in a tough financial situation, private loans tend to be less flexible.
