Thieves, IRS & College bucket of gold at rainbows end

December 17, 2008

By J.D. Wyczalek

Remember the line in the hit movie Jerry Maguire “Show me the money!”

There is also an old adage why do thieves rob banks, because that is where the money is.

In the whole college financial aid game (and yes it is a game with players, winners and losers) in this game you have to know the rules and the playing field.

My son plays on a club soccer team. We had a game the other weekend at 8:00 AM. It was crisp and cold. At 8:20 AM the other team still had not showed up. And had they not showed up within the next 5 minutes, it would have been a forfeit.

So my point is, as a player in the college game first you must know which fields to play. Not every college is created equal. Some have bigger pots at the end of their rainbows than others. Yale for example has an asset bucket in the $17,000,000,000.00 (17 Billion). And they are shedding tears because their pot has lost value.

Yes, the economic turmoil has caused a lot of loss but lets look at it this way. In 2004 Yale had $12.7 billion and in 2005 their numbers were $15.2 billion. So they are still up from those numbers.

When your student applies to a college do you know how much is in their dowry? Colleges that have bigger cash rolls tend to be more generous in handing out scholarship/grant money.

An example is Rice University. They are changing the rules for financial aid for their institution. Rice University is raising the annual income threshold for need-based financial aid to $80,000 a year, up from $60,000, in response to the state of the U.S. economy.

“We don’t want any families to be deterred from sending a loved one to college because of the economy,” said President David Leebron.

Rice University also said it will continue to extend admission and financial aid to non-need students as well. Some 30 percent of the freshman class will receive a merit scholarship.

So schools like this have bucks to give out. This of course all started with Harvard and the IRS.

Uncle Sam’s IRS tax collectors started salivating when they turned their eyes towards the assets of colleges. The IRS created a 33-page questionnaire here is a link on the website  to the PDF.

So Harvard said look, look we are giving out more money. Harvard rewrote their rules for handing out financial aid and actually increased the amount of aid given out and has increased who is eligible to receive it.

Show me the money.

It all starts with the FAFSA the Free Application for Federal Student Aid. Fill this form out and submit it to the colleges your student has applied to, to qualify for financial aid.

If you have ever played a game with a 3 year old child who changed the rules in the middle of the game only to make it confusing, difficult and even frustrating. So goes the financial aid rules as described in the updated amendment signed by President George Bush in August 2008 (Higher Education Opportunity Act). New rules, new game.

Who knows where the next administration is going to go with newer rules and newer regulations.

In a nutshell research your college choices. Best-fit college means more than majors offered, amenities and features.

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