Bankrate asked: "Should students be asked to pay for their college education? Should parents be expected to foot the bill?" NASFAA President Justin Draeger penned the following viewpoint.
Parents who can help pay for college should. It's not only their parental responsibility, the philosophy of the U.S. higher education system depends on it.
Let's imagine two hypothetical students, Carla and Tim. Carla comes from a two-parent household that brings in $150,000 per year. Tim lives with just his mother, who earns $30,000 annually. Both Tim and Carla have part-time jobs earning $12,000 per year. If we only considered Tim's and Carla's income without looking at their family situation they would appear equally needy, when nothing could be further from the truth.
That's why the higher education financing system, constrained by limited federal-aid dollars, is structured to rely on families as the foremost funders of a student's education. With unlimited financial-aid resources, parents would not need to contribute to college costs. But that has never represented reality.
The federal financial-aid system isn't designed for children to fly solo financially. Generally, students aren't considered independent from their parents for financial-aid purposes until they're 24 years old or have an event that signals adulthood, such as military service or a marriage.
Of course, whether parents should help pay for college is entirely different from whether they can pay for college -- and financial aid exists for those families who truly don't have the financial resources to pay.
There are a number of steps parents can take to ensure they are taking full advantage of all available funding avenues:
Apply early. Many states and colleges use the Free Application for Federal Student Aid, or FAFSA, to determine eligibility for nonfederal student-aid funds that may have early deadlines or limited funding. Completing your taxes earlier will help you get a jump on filing the FAFSA, but you don't need to have your taxes complete in order to apply. You can use data from your previous year's tax returns to estimate figures needed to complete the FAFSA.
Avoid common FAFSA errors. Common FAFSA mistakes, like entering the wrong federal income tax amount paid or listing adjusted gross income as equal to total income from working, can slow down the processing of your aid application, giving you less time to review funding options. See our FAFSA Tips and Common Mistakes to Avoid guide for a more comprehensive list.
Look into state and regional college tuition discounts. Many states have programs that allow residents to attend college in another state without having to pay out-of-state tuition. Check with your state, or with universities that you're interested in, about available tuition exchange or reciprocity programs, and ask about how to sign up. Read more about it on NASFAA's website.
Take advantage of tax breaks. Tax credits directly reduce the amount of tax you are liable for, and tax deductions reduce the amount of income on which you pay taxes. Review our annual guide to federal tax breaks for higher education for an overview of all the options that may be available to you.
Help your student find and apply for state aid and outside scholarships. Many organizations offer grant or scholarship funds based on financial need, academic merit and other criteria such as ethnic background, residency or employment affiliation.
Additionally, almost every state education agency has at least one grant or scholarship available to residents, and many have a long list of student-aid programs. NASFAA's State Financial Aid Programs page offers an interactive state map where you can click on your state to find out what financial-aid programs may be available. Do some searching to see what is available and speak to financial-aid professionals at your student's school or prospective school to better understand how these funds will affect your student's aid package or reduce the total you will need to pay out of pocket.
Touch base with the financial-aid office. Your college's or prospective college's financial-aid administrator can provide information on the types of financial aid available to you, financial-aid application deadlines, and how to accurately complete the FAFSA and other forms. Financial-aid professionals can also speak with you about how much aid you are qualified to receive and when you can expect to receive it, ways to make smart borrowing decisions, and how to request an appeal of financial-aid decisions.
Research clearly demonstrates that a college education dramatically expands students' earnings and learning potential over their lifetime, and most parents are likely to support that benefit for their students.
Given the multitude of ways that parents can help with funding, it is not far-fetched to expect those who are able to contribute to this meteoric rise in their child's earning potential to contribute.
NASFAA President Justin Draeger penned this article for Bankrate.com.
Publication Date: 6/1/2015