The Worker Bee
Even though most students feel perpetually broke, it is very possible to earn “too much” while you’re in college. The downside of achieving a higher tax bracket is that it can cause you to miss out on thousands when it’s time to report your income.
The fix: Instead of working multiple jobs or angling for big one-off paydays, pour that energy into getting the highest GPA possible. In the long run, the financial aid opportunities available to good students pay off more than any job or paycheck.
Imagine this: You’re about to begin your sophomore year at your dream college. You’ve filed the FAFSA and checked all the appropriate boxes, but when your award letter arrives, it’s for $8,000 less than the year before—leaving you to make up the difference somehow.
The fix: Most federal and institutional aid is awarded on a first-come-first-served basis, so missing important deadlines could leave you high and dry. File the FAFSA as soon after January 1 as possible and, if necessary, estimate your tax returns and those of your parents. It’s better to have to go back and update your forms than to skip a deadline and miss out on your maximum reward.
Despicable as it is to prey on needy college students, many scammers do just that—and falling for a scholarship scam can set you back time and hassle, not to mention thousands of dollars.
The fix: Fortunately, scholarship scams are pretty easy to spot if you know the warning signs. Avoid any offer that a) requires you to pay a fee upfront; b) claims to be “automatic,” “guaranteed,” or simply too good to be true; or c) asks you to attend a free seminar. All of these are common characteristics of cons, but when in doubt, research the award/organization with the Better Business Bureau.
The Perpetual Student
Waffling back and forth between majors, repeatedly switching schools, borrowing more than you need: All these things can impact your financial aid eligibility. With no access to funding, you may have to take a break from your studies and save money. But how are you supposed to do that when no well-paying employer will hire you without a college degree? It’s a pretty miserable catch-22.
The fix: It’s understandable—and sometimes advisable—to switch gears at some point in your college career. But for the sake of your solvency, it’s smart to choose a general direction as early as possible and stick with it. Meeting with your advisor early and often is the key to staying the course.
Divorce is hard enough without all its inherent financial implications. But for college students, accidentally reporting the “wrong” parent’s income on financial aid forms can spell disaster.
The fix: Pay close attention to the portion of the FAFSA where it talks about reporting your custodial parent’s income—that’s the parent you live with most of the time. You may also be asked for information for noncustodial and step-parents; when in doubt, contact the prospective school’s financial aid office to be sure you’re reporting the right info.