Five Valuable Tips as You Prepare to File FAFSA

Copper Leaf Wealth Advisor Breanna Sykes has published a new article including valuable tips for those preparing to file FAFSA (Free Application for Federal Student Aid), which opens October 1st. The article, published on LinkedIn, provides key points for consideration including:

1. File early

FAFSA applications open on October 1st, and you should file the year before your child attends college. Note that some states award grants on a first come first served basis so file early to make sure you aren’t missing out.

Did you know? Students who file within the first 3 months tend to get twice as many grants on average as students who file later.

2. Plan early

Income required on the FAFSA application is from 2 years prior (2021 for the 2023-2024 FAFSA).

If you plan early enough, you have time to minimize income and assets. You can offset capital gains with losses, incur planned expenses to minimize savings, or structure retirement plan income for later.

Did you know?

3. Save Smart

Consider saving as early as possible to take advantage of compounding interest - even if you start small! Starting early with a small amount can have a bigger impact than waiting until you think you have more to put towards the goal every month. Ask grandparents if they already have 529 accounts open or if they would be willing to open one. Some states offer tax credits for contributions to 529 plans, so saving early could also save you on taxes.

Did you know?

4. Spend Smart

If you qualify for the American Opportunity Tax Credit (AOTC) make sure you spend $4k of expenses out of pocket, not through the 529, to maximize the benefit. You cannot double dip with the same qualified expenses by receiving a tax credit and tax-free 529 distribution.

5. Financial Aid Appeals

You must appeal directly with the college, so it’s up to the specific college’s financial aid administrator to accept or deny your appeal. To begin, you might contact the college you are looking to appeal with and ask about their process.

Did you know?

Are you interested in finding out about more funding your child’s college education? Click here to view Breanna’s article “Five Ways to Pay for College”.

Recipients should not act on the information presented without seeking prior professional advice. Check with your tax advisor about your specific situation or click here to reach out to our *affiliated CPA firm Davis & Hodgdon CPAs.

At Copper Leaf Financial we work with many of our clients as they navigate the college funding process. We know how to manage college costs, increase aid eligibility, determine appropriate savings plans, and generally make the process as affordable and comfortable as possible. Call us today at (802) 878-2731 to schedule a complimentary strategy session.

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*Copper Leaf Financial is an affiliated and separately registered entity.