Despite previous assurances that the 2025-26 Free Application for Federal Student Aid, better known as FAFSA, would be released on Oct. 1, the U.S. Department of Education announced in August that most families will not be able to submit their FAFSA until December.
While many families may be wringing their hands about the announcement, the delay will actually give some families an opportunity to reduce their college costs by thousands of dollars a year.
But to make that happen, they need to start now doing their homework by studying the new FAFSA rules and how they can benefit from them.
Here are some examples of actions that take time but can be completed prior to filing the FAFSA:
· Changing the ownership of 529 college savings accounts. Accounts that are in the student’s name are assessed by the FAFSA at a much higher rate than those owned by parents. If the beneficiary is a sibling, it also does not need to be reported.
· Repositioning a child’s assets, including checking accounts, savings accounts and brokerage accounts. Any assets, not just the child’s, can be repositioned.
· Accelerating retirement contributions by parents, because retirement savings are not reported on the FAFSA. For 401K’s, this only matters for the calendar year and has nothing to do with the FAFSA being completed.
These are just a few examples of how families, especially middle-income families, can reduce college costs.
Families shouldn’t delay. They should be doing their homework now in order to be ready when the FAFSA is released. College families also have time to set the stage for a much more effective appeal by the time their financial aid letter reaches them.
An effective appeal or negotiation with your favorite choice college can also mean thousands of dollars in additional financial aid.
Families should also figure out what they are likely to pay for their student’s top-choice colleges, using the net-price calculators that are required on every college website.
The calculator may not be 100 percent accurate about the student’s eligibility for merit and need-based aid, but it will still give you an idea of your costs. If it’s more than you can afford, there will still be time to consider other options that might be not only more affordable but also a better fit for your student.
From personalized academic and financial planning to free workshops and test score improvement, My College Planning Team consists of an expert team dedicated to making higher education accessible and affordable, particularly for middle-income families. Free, no-obligation workshops are presented in person and virtually.
As the new school year is ramping up, it’s important to get the word out to as many families as possible.
For information, visit the My College Planning Team website.
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