College financial aid advice is being offered during two workshops to help Naperville parents and grandparents effectively plan for their kids’ college tuition.
The free workshops are being offered from 7-8PM Tues., October 2, at the 95th Street branch of the Naperville Library and Thurs., October 4, at Metea Valley High School. The workshops will be hosted by brothers Ryan Paul and Alex Paul, Naperville natives and Waubonsie Valley High School graduates.
The Department Of Education (DOE) rules in regard to granting financial aid to students can quickly become complicated and confusing. The DOE’s form for applying for aid is called the FAFSA, Free Application for Federal Student Aid. The FAFSA helps to simplify the financial aid process. But, simple is not always the best way to accurately describe the form.
The FAFSA form can be complicated and its format makes it difficult to gage whether it is being completed accurately. Many families often make mistakes, potentially costing them lost aid, or even overpaying for college tuition. It can be an exhausting process, similar to filing multiple and unnecessary tax forms.
“One common mistake many grandparents make is gifting money to students directly in either a 529 education account, or a Uniform Gift/Trust To Minors account,” said Ryan Paul. “Monies being gifted to a student are treated differently depending whether the parents or the grandparents made the gift.”
When parents gift money directly to their kids, the DOE assesses these funds at 20%, (as opposed to assessing parents’ assets at 5.65%) causing the possibility of less financial aid being available to the family.
“If the grandparents made the gift directly to the 529 or Uniform Gift/Trust accounts, the money is counted as income to the student and assessed at 50%—causing the potential for a much greater loss of possible financial aid,” Paul said. “It is best not to make any money or asset transfers until fully understanding exactly how it could affect a student’s ability to qualify for financial aid.”
The workshops are being offered free of charge to educate local residents in the college funding process.
For more information about college financial aid in Naperville or to register for the workshops, visit collegefundingplanners.com/pnb.