HOUSTON – The cost of college is skyrocketing. The average four-year institution will cost more than $104,000. You may be trying to find ways to help pay for your child’s school, but one college financial expert says many parents are making mistakes that could cost them thousands of dollars.

Brannon Lloyd started The College Money Guys 16 years ago with workshops and consulting to help parents secure scholarships for their kids.

These are the three biggest mistakes he sees parents make:

Failing to fill out the FAFSA (Free Application For Federal Student Aid)

Even if you know you make too much money to qualify for federal aid, many schools won’t even offer merit-based scholarships if you don’t have one of these on file.

Putting money into a 529

These are funds you have to claim on the FAFSA form. Colleges and universities know you have saved that money specifically for your child’s education. Lloyd said that can work against you. If a university sees you have $25,000 sitting in a 529, but your child needs $50,000 to attend that school, they will offer only $25,000. In a sense, Lloyd said you are punished for planning ahead. Instead, he said parents who have any type of business — even selling Tupperware — can legally employ their child. Instead of a paycheck, put their earnings into a Roth IRA in their name. The FAFSA does not ask or include retirement accounts when determining how much money you can pony up for your child’s college expenses.

“When they get ready to go to college, they have this pool of money in a retirement account, which isn’t showing up on a FAFSA,” explained Lloyd. “You can access it without a 10% penalty because you’re using it for higher education. And because it’s a Roth, you won’t pay any taxes on the gain just like a 529 plan.”

Only applying to one school

Put your school loyalties on the sidelines for a moment and be open to schools that are known for enticing students to their campuses with scholarships.

“Looking at schools like Trinity in San Antonio is a good example,” said Lloyd. “Trinity is actually top-ranked in Texas right now, but they’re very generous when it comes to academic scholarships.”

The Fiske Guide to Colleges can help in your search for schools.

Lloyd said most state schools like Texas A&M University and The University of Texas have so many interested applicants that they don’t have to throw money at them to get them to choose their schools, so they don’t.

Your child should apply to multiple schools. Don’t accept any admissions offer until after you have worked out funding. You can use one school against another to get them to pony up more money.

Other resources for college money:

The Abe & Annie Seibel Foundation offers interest-free loans to college students. You have to contact the foundation to get an application. The deadline for this year is February 1, 2020.

The College Money Guys often hold free workshops to help parents create a plan to pay for their child’s college. When you fill out the FAFSA, the form will request information from your tax return from two years prior, so Lloyd said if your child is a senior now, your tax return from two years ago (when they were a sophomore in high school) is the return they will see. You want to get some help before you file that return.

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