College costs: A desperate search for funding
Some colleges have boosted their financial aid because of the recession, so it could be worth contacting a school one last time before giving up.
Now that acceptance letters are out, parents of college-bound kids are grappling with the next hurdle: “how on earth” they’ll pay for it, said Jane Bennett Clark in Kiplinger’s Personal Finance. The financial picture for most families has gotten ever murkier in the months since applications were sent off. But there’s a silver lining—of sorts. “Some colleges have bolstered their financial aid on the expectation that more families will need it. “If you haven’t already, fill out the Free Application for Federal Student Aid right away.” Though financial aid forms for most private colleges were due back in February, it’s still worth calling the school one last time before giving up on it entirely. “Deadlines matter, but colleges understand that we’re in unusual circumstances.”
There’s also time to ask for more help if you think you’ve been “shortchanged,” said AnnaMaria Andriotis in SmartMoney. When other students reject the admissions offers from a particular school, the funding picture changes for the school as a whole, and “more money opens up that you could have a shot at.” If your financial circumstances have changed since you applied for aid the first time, don’t be shy about pointing that out. And if your child has received better financial aid offers from similar schools, ask the “stingy” school to match or better the other schools’ aid packages. “The worst-case scenario: The financial aid office sticks to its initial offer.”
No matter what, many families will end up cashing out savings or even borrowing money privately, said Penelope Wang in Money. If you have put aside money in one of the 529 plans set up by states to encourage savings for college, tap that first. Yes, the portfolio may have suffered large losses recently. But you need the money now, and, since most of the money in 529s tends to be in cash or other fixed-income investments, “a big surge in stocks won’t help you much.” One benefit of taking money out of a 529, rather than from another source: Withdrawals won’t affect your financial aid eligibility in the future.