Issues that affect every college or college-bound student who works
1. In the financial aid formulas, students have an income protection allowance of $3,000, but every dollar earned over that it will cost them 50 cents in lost financial aid.
Example: $5,000 earned, 3,000 exempt; $2,000 @50% = $1,000 lost in financial aid; $383 lost in social security and medicare taxes @7.65%.
If the student earns more than $5,000, in addition to ss and medicare taxes, there is also federal income tax.
Example: $8,000 earned, 3,000 exempt; $5,000 @50% = $2,500 lost in financial aid. Tax consequences: $5,000 exempt; 3,000 @10% federal + 8,000 @7.65% ss & medicare = $912 lost in taxes.
2. In the financial aid formulas, students have no asset protection allowance. Every dollar they have will be assessed at 20% per year which only compounds the problem if they don't plan properly.
Sadly, virtually no student is aware of these consequences, and too few parents are.
3. Here's a real zinger. In the financial aid process, if the student will attend one of 225 elite colleges, that in addition to the FAFSA require the CSS Financial Aid Profile, and they didn't work, there will be an automatic income assessment of $1,000! The secret to avoiding this assessment, and much, much, more are all included in Getting Into College And Paying For It!
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Reecy Aresty, a financial advisor since 1977, is the author of Getting Into College And Paying For It, an indispensable parent/student manual, the only book of its kind available in Spanish. For the past 25 years he's helped thousands of families send their kids to the college of their choice for less than they ever dreamed possible. His book is guaranteed to give students that all-important edge in admissions, and for parents there are numerous legal strategies to drastically cut the cost of college. Go to www.paylessforcollege.com for a free report, The College Funding Timeline, and learn what parents, students, and the media are saying about Reecy and his book for all seasons.