So here’s a shocker.  The fine folks that manage FAFSA (the Free Application for Federal Student Aid) really stepped in it this week, and not for the obvious reasons typically associated with completing the oft-maligned, convoluted federal financial aid forms that the government (and by default many universities) use to determine how much you can afford to pay for one student for one year of college.

Nope – they did something far worse.  Last week FAFSA tweeted an odd photo with the caption, “Help me. I’m poor.”, and the tweet read, “If this is you, then you better fill out your FAFSA”.  Note that the link has since been pulled down by the U.S. Department of Education.  Good move.

And here’s why.  Aside from the fact that you may be offended by the message (I’m not by the way), it is completely misleading to imply that FAFSA is only for poor people.  Financial Aid (yes, even the need-based type) is a long-standing tool used by all colleges and universities (though not in equal measure) to discount their prices!  And that practice extends most definitely to the middle class – in fact, institutional need-based aid represents the largest source of scholarship money available to middle class families.  Literally billions of dollars are awarded through this system, and therefore, everyone (not just poor people) should be completing a FAFSA.  This is not my opinion or a theory – it’s a fact.   The middle class, or those with household earnings between $80K and $200K (my own definition), may be in a great position to see significant discounts off the price of college.  I have counseled plenty of regular, professional families —  even families earning incomes above $200,000, who have received 5-figure awards.   That’s not to say that every family in this demographic will enjoy that level of benefit from every school on their child’s list.  But some most definitely will.

The college financial aid process is neither simple, nor straight-forward, nor fair.  Neither is the admissions process.  In both, there are certain rules, and then there is discretion and “professional judgment” .  If you know the rules, and more importantly, how those rules will be applied to your situation (at a particular school), then you may be able to arrange your finances and admissions strategy, so that you can maximize your opportunities at landing a discount.

While there is no single, one-size fits all strategy that fits all families; there is one thing that is certain.  If you don’t  apply, you definitely won’t get anything.  Unfortunately, I do see too many ‘wealthy’ families after the fact who — after having been told by well-intentioned, but uninformed couselors that they wouldn’t qualify — left money a lot of money on the table.  That’s why tweets like the one from last week are truly horrible.  They simply perpetuate the myth that financial aid is only for ‘poor’ people.  Even the White House is vehemently URGING ALL FAMILIES, regardless of income, to consider their financial aid options.  

If you have a student or students at home and are confused about the process, you’re not alone.  How colleges set price and then discount those prices is complicated.   You can read past year’s discount reports at the College Board website.  You’ll see from them that today’s admissions process is inexorably tied to a school’s pricing policies… and that price differentiation is REAL.  And therein lies your potential opportunity.  How much opportunity?  That depends on many factors, but I’ll say this:  the sooner in the process you learn the rules, the better your opportunity.

I’ll be talking about those rules and how to ensure that you’re getting the right  (as in  financially aligned) admissions guidance for your student at   my college funding workshop next month in Pembroke Pines.  Past attendees have raved about what they’ve learned.  I’ve been doing this now for 7+ years, and while much has changed during that time, one constant is that those who attend my workshop are better off for having done so.  The time to get this information is now, before the bedlam of school returns in August.

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