11 Top Financial Aid Strategies to Get More Money for College

Financial aid comes in many forms and from several different sources, including federal, state, school and private opportunities. Although any amount of financial aid is helpful, there are financial aid strategies you can do to unlock additional funding for college.

Here’s how to get more financial aid by planning ahead and putting forth extra effort throughout the process.

Steps you can take before applying for financial aid

1. Reduce your taxable income during the base year

Colleges and universities primarily use the Free Application for Federal Student Aid (FAFSA) to estimate a student’s ability to pay for college. Currently, the student’s Expected Family Contribution (EFC) is used to determine need-based financial aid eligibility. However, the EFC will be replaced by the Student Aid Index beginning in the 2023-2024 academic award year.

That said, the biggest factor influencing need-based aid is (and will continue to be) their family’s income level and assets.

But this financial data isn’t based on a family's current financial situation. Instead, income and tax information is used from the “prior-prior year”. This is referred to as the base year.

For example, an incoming freshman’s first FAFSA base year is from January 1 of their sophomore year of high school through December 31 of their junior year. Therefore, families need to start planning and adjusting their finances years in advance to get more money through the FAFSA.

In general, you can increase financial aid eligibility by reducing your taxable income. Families can achieve this by following these financial guidelines during the appropriate FAFSA base year:

• Avoid selling stocks and bonds that result in a capital gain.
• Don’t take retirement plan distributions that increase your income.
• If possible, defer any work bonuses until they won’t affect your child’s financial aid eligibility.

There are other ways to reduce your taxable income, but they could impact your family in other ways. You’ll need to weigh all of your financial goals and determine the best course of action.

2. Strategically shift or shelter assets

Unlike income information, asset data is based on the date your FAFSA is filed. But families can use strategies to shift or shelter certain assets before filing to reduce their impact on the student’s EFC.

Some financial aid strategies that limit reportable assets include:

• Reducing the amount of money sitting in your checking or savings account. Consider paying down debt with these funds or prioritizing other necessary expenses.
• Increasing contributions to your 401(k) or other qualifying retirement plans. Note that retirement account balances aren’t reported as an asset for FAFSA purposes.
• Spending any loan proceeds before the FAFSA file date.

Additionally, if your child has assets in their own name, it’s best to shift them into the parent’s name as parental assets are treated more favorably than student assets. This might be the case if your child has a UGMA or UTMA account. It’s better to transition the funds into a custodial 529 plan account, which is reported as a parent asset.

3. Research merit-based aid at multiple schools

Not all financial aid is need-based. Most schools offer some form of merit-based aid, but it isn’t always clear what grades, scores or other markers help a student qualify for merit aid.

Some schools openly publish grade point averages and SAT or ACT scores that result in discounted tuition or a specific scholarship. If you can’t find the information you’re looking for on the school’s website, contact their financial aid office directly to inquire about merit-based aid.

Research merit aid at multiple schools to increase your chances of receiving additional school scholarships or other types of financial aid.

Related: Grants vs. Scholarships: What’s the Difference?

4. Be an above-average student to the place you're applying for

Merit-based aid is often subjective, so you need to make yourself as appealing as possible. This includes being an above-average student and ensuring your extracurriculars are well-rounded.

If your goal is to get as much financial aid as possible, it’s important to be realistic about where you stand in terms of academic success in relation to the school you’re applying to. For example, if you’re applying to highly competitive programs, you might find that you receive better offers at a public college or university.

Tips when submitting your FAFSA

5. File your FAFSA as early as possible

As the saying goes, the early bird gets the worm. In this case, the wiggly worm is more financial aid.

Timing matters when it comes to submitting the FAFSA because some financial aid (e.g. federal loans and grants) is first-come, first-served. To be considered for financial aid, submit your FAFSA on October 1 of each year.

Applications are accepted through June 30 of the following year. However, your state or college might have an earlier deadline. It’s best to apply as early as possible.

6. Apply even if you don’t think you’ll qualify

A common misconception is that the FAFSA form is only for low-income families. Even if your family has a relatively high income, financial aid might still be on the table.

For one, the EFC formula is complex. Your assessment of your family’s financial need might be totally inaccurate. Additionally, your family’s financial situation could change (e.g. sudden job loss), in which case you’ll want to have your FAFSA on file to request that funding be reconsidered.

Some schools require a completed FAFSA before they’ll offer academic scholarships and other forms of merit-based financial aid. Likewise, the federal government requires a completed FAFSA if the student plans to use federal student loans to finance any portion of their education.

Don’t box yourself out of extra funds to help pay for college just because you think you won’t qualify.

How to increase your financial aid award

7. Ask for a professional judgment

Many families don’t realize they can negotiate additional financial aid. Once you receive a financial aid award letter, you can request a professional judgment directly from the college’s financial aid office.

This is as simple as writing an appeal letter or submitting an online form that details why additional financial aid is needed.

Each school has different policies and procedures. But in general, this is a great option for families that experienced an income drop or had a significant financial hardship that isn’t reflected in their submitted FAFSA information.

8. Compare award packages

You might be able to leverage financial aid offers from similar schools, particularly when appealing for more merit-based aid.

This needs to be done tactfully. But using competing offers can work to your advantage if the school isn’t where it wants to be in terms of students choosing their program that season.

Using other financial sources

9. Apply for private scholarships and grants

Federal, state and school financial aid might not be enough to cover the cost of attendance. Therefore, you need to put in extra work to apply for private scholarships and grant opportunities.

Many businesses offer scholarships to eligible family members of employees. Local groups, like churches and rotary clubs, provide scholarships to students in their own community.

You can also use online scholarship search tools, like the Department of Labor’s Scholarship Finder or College Board’s scholarship database.

10. Ask your employer about tuition assistance

If you plan on working during school, consider choosing an employer that offers a tuition assistance program. Your employer might provide up-front payment of tuition and qualifying expenses, or it might reimburse a percentage of your tuition after successfully completing a college course.

By taking advantage of a workplace tuition assistance program, you can significantly lower your need to take on student loans.

11. Take out student loans

In the end, you might still need to take out federal or private student loans to pay for college.

Federal student loans have low interest rates and flexible income-driven repayment (IDR) plans. They also have the potential for loan forgiveness and various borrower protections.

This isn’t usually the case with private student loans, so private loans should be a last resort to fill remaining financial needs.

If student loans are in your future, you can set yourself up for long-term success by signing up for a pre-debt consultation with one of our student debt experts. You’ll receive unbiased advice about your financial future, something you won’t necessarily receive from your school’s financial aid office.