Nearly every day, I’m  re-reminded how confusing and wrought with potential landmines the financial aid process  can be… but this recent story from the Chronicle of Higher Education took it to a new level.

Last week the very reputable Chronicle of Higher Education reported that 165,000 applicants lost out on federal financial aid (Pell Grants, in particular) because of a possible decimal point placement error on the application.

You see, in an effort to streamline the process and make grants more widely available to higher income applicants, the 2014 version of the Free Application for Federal Student Aid, or FAFSA, allowed for certain fields to accommodate more digits (i.e., higher incomes).  Good idea.  Bad execution.  Unfortunately this, and other seemingly minor ‘paperwork’ changes, are rarely sufficiently reported and/or explained by the very convoluted instructions that accompany the applications; and in this case, as many as 165,000 applicants mistakenly overstated their income as a result.   Without getting too specific, a family that entered an adjusted gross income of $28,918.24 on the 2014 application would have appeared to have earned $2,891,824 because the FAFSA now ignores the decimal.  The proper entry on the year’s application would have been 28918, with the .00 appearing “outside the box”.

(Note – the family earning $28,918.24 may qualify for a max Pell Grant of $5,730 and possibly other institutional financial assistance.  The family earning $2,891,824 can only hope for a merit scholarship at schools that offer these, but otherwise they would likely be expected to pay full retail.)

Now, most of my readers have an AGI that falls somewhere between $28K and $2.8 million; so what’s the point?

The college application process, and more specifically the critical financial aid subcomponent, is complicated and riddled with obstacles and challenges.  You might argue that the folks who entered the decimal and overstated their income are fools who should have taken the time to read the instructions.   Let me say that as someone who has processed thousands of these forms, the instructions are both complicated and misleading, the rules/definitions of seemingly simple matters (such as stated net worth) are subject to interpretation, buried in thousands of pages of regulation not unlike the tax code…and what’s worse – the ‘confirmation’ form that you receive from FAFSA (called a Student Aid Report) would not necessarily tip off a typical (as in un-initiated) applicant to such a gross error.   Therefore, what’s truly foolish is that there exists a federal application process so poorly conceived, let alone designed,  that  allows 165,000 foolish to make the same foolish mistake!

And frankly it’s only the latest illustration in a series of ‘paperwork’  changes to the way the government and the colleges will be viewing and using your financials to evaluate aid and scholarships.  With something as important (and frankly expensive) as funding your child’s college education, it helps to have an expert who not only understands the whole process, but also can act as your advocate, evaluating each new nuance, and assisting you appropriately in each step, including the preparation and interpretation of the seemingly easy, yet critically important and tedious financial aid applications.

Regardless of where you fall on the the $29k to $2.9 million spectrum, it behooves you to learn how pricing, discounting and financial aid intersect with your student’s admissions objectives.  My insights are measured, based in real-world practice – my own — and my first-person research, not pie-in-the-sky conjecture.  I’m leaving Monday to meet with several Administrators at schools throughout the mid-Atlantic.   When I return, I’ll be sharing many insights from the road, as well as from my practice, including the formulas that will be used to determine how much you are expected to pay for your child’s education.  I’ll be doing so at my free college funding class on July 29 in Pembroke Pines, again right after my own college road trip where I’ll be meeting with admissions counselors from several schools.

I hope to see you at my July 29 class.  Click here to register and to get more info, and keep reading my column as we’ll be posting about what we see behind the curtains of Admissions at some great schools that you may have not heard much about (but should have on your radar)!

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