Many families suffer from self-imposed pressure and financial angst that often lead to costly mistakes and blown opportunities to send their children to college.
By 2018 the U.S. workforce is expected to be more diverse with Whites making up a decreased share. At the same time, the U.S. workforce will be shifting to service-providing industries dominated by health care and social assistance as well as professional, scientific and technical and educational services. It also is a time when college enrollment from 2009 to 2020 is expected to increase by 25 percent for Blacks and Asian/Pacific Islanders, according to the Department of Education.
But who is going to pay for their education?
For starters, many parents avoid the FASFA and other financial aid forms without realizing what they have sacrificed.
First-generation families that pay for everything in cash may not realize that cash is not really needed for college. Making matters worse is that, according to U.S. Census Bureau statistics, poverty is on the rise. In 2010, 15.1 percent of all persons lived in poverty, and poverty numbers are disproportionately higher among minority groups, as 27.4 percent of Blacks, 26.6 percent of Hispanics and 12.1 percent of Asians live in poverty, compared to 9.9 percent of non-Hispanic Whites. Annual poverty level thresholds for single-parent families with two children were $17,568 per year as compared to $22,113 for two-parent families.
Failing to complete a FAFSA makes little sense especially when families may qualify for maximum federal and possibly state financial awards under the automatic zero Expected Family Contribution (EFC) calculation. Parents who file a 1040A or a 1040EZ federal tax return, have combined wages or an adjusted gross income of $30,000 or less per year, receive any federal benefits such as temporary assistance for needy families (TANF), support for women, infants and children (WIC), social security benefits (SSI), food stamps or free/reduced programs automatically qualify for a zero expected family contribution. Having a tax service complete the long form 1040 tax return rather than the shorter forms 1040A or 1040EZ is another common mistake many parents may not be aware of.
Zero EFC provides students with up to $5,500 per year in Pell Grants, low 5 percent interest Perkins loans, and more in subsidized Stafford loans before any state or need-based financial support. The other benefit of the Stafford and Perkins loans is that they are not based on parental credit scores but on the student’s financial need.
