My Ideal College shares ways to use financial aid for college tuition

How to pay for college is probably the number one stressor for parents. In my last post, I shared part of my interview with Jim Anderson of Making College Worth It. Jim helps parents find the right school based on their child’s interests and what the parent can afford. 

Last week, we focused on what parents should consider throughout their child’s life to help pay for college. You can click here to read that blog in case you missed it. In this week’s blog, we focus on the types of financial aid and why you need to pay attention to this sooner than later.

What are the types of financial aid parents and kids can get for college tuition?

Jim: There is need-based and merit-based aid. Need-based aid is awarded through the federal government, state government or colleges based on your family’s financial need.

Merit-based aid is usually awarded in the form of scholarships or grants based on your child’s academic performance or other talents or contributions, like in sports or the arts.

Why is it important to get an idea of the colleges your child wants to apply to in their freshman year of high school?

Jim: Colleges are different in the type of aid they offer. Some are need-based and others are merit-based. The focus of how the aid is calculated is very different. If it’s need-based, they will start looking at your financials in your child’s sophomore year. If you wait until senior year to look at your financials, you might have missed opportunities to adjust your income to make yourself look “poorer” for the aid. For example, you might put off selling stock or a getting a bonus that will inflate your income during those years they use to calculate your need-based aid. I ended up paying off my mortgage because I looked at my financials sooner than later. It saved me $7500, and it got me more need-based aid for when my daughter went to college than if I hadn’t done it.

For merit-based aid, they use the GPA from your child’s first three years of high school and their best SAT/ACT test scores. Plus, they will be looking for where your child has demonstrated leadership. They will look at sports or other activities that they have stayed with and learned from. For example, if your child ran track for three years and lettered in it.

Tell us more about FAFSA and what it is.

Jim: FAFSA is Free Application for Federal Student aid for need-based merit. It is made up of four different calculations – parents’ income, parents’ assets, student’s income, and student’s assets.

Why does FAFSA include the student’s income and assets into the calculation?

Jim: Kids get Christmas money, money from jobs, etc. The government thinks if it’s in your child’s account it must be for college.

Should every parent apply for FAFSA and if so, when?

Jim: Here in Georgia every parent should. It’s the only way to get preferred federal loans, as well as the Georgia Hope Scholarship. You should apply in October of your child’s senior year. Do not wait until May. Some merit-based aid can also be based on need. The FAFSA lets the college know who that is.

I hear horror stories from other parents about how hard it is to fill out the FAFSA forms. What are your thoughts?

Jim: It’s really not hard. You just need to pay attention to what they are asking. You can always click on the question mark icon if it’s unclear.

What tool is available for parents to determine their expected contribution?

You can go to the College Board website and use their expected contribution calculator. This will give you an idea of how much your family will be able to financially contribute each year of college.

What are your other pieces of advice for parents as it relates to paying for college?

Jim: One, work with a financial planner. They can help you look at different options like stocks, bonds, etc. to help pay for college. Two, if you are having to borrow too much to pay for college, you need to reconsider the school. There are a lot of great schools that can give your child the knowledge and skills they need for their career.

As you can see, Jim has a wealth of information on how to navigate the financial aid process. You can reach him at or by phone 404-545-1369.

What additional questions do you have regarding financial aid for college? Tell us in the comments below. We will get the answers and use them in a future blog post.