Navigating a clear course toward your financial security.

 Is your child heading to college soon?  Here are some tips:

College Financial Aid - When should you start the process?  Long before you realize.  The calendar year on which your Expected Family Contribution (EFC) is based includes the second semester of your child’s junior year of high school through the first semester senior year.  Then, in January of your child’s senior year, you submit the numbers for the year just completed.  Therefore, you need to make plans to optimize your financial situation as best as you can prior to the second semester of your child’s junior year.  Get familiar with the forms as soon as you can.

When your college-bound student gets a work/study award as part of a financial aid package, the award may be only an opportunity and not guaranteed aid.  Many colleges require students to compete for available jobs and not all students actually get into a work/study program.  Ask what the hourly rate will be to determine the number of work hours per week.  Also, find out whether financial aid awards are paid in cash or credited to your bill.

Insurance coverage – Will your homeowner’s insurance cover your child’s contents in his/her dorm room, such as a computer, microwave, and personal belongings?  What about car insurance?  Will your child’s car be covered if he/she goes to school in another state?  If your child is not taking a car to school, attends college more than 100 miles away from home and is an occasional operator on your auto policy, speak to your insurance carrier.  You may be eligible for a reduced premium.

Credit cards – Have you discussed with your child the use of credit?  Rather than letting them learn the hard way by getting into debt over their heads, teach them about credit by allowing them to have a credit card with a low limit while they are in high school.  Better: Apply for a card that is backed by cash of his/her own.  A representative at your local bank can discuss setting up a card of this nature.

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