Baird’s Susie Bauer: Families Unlikely to Receive Financial Aid Should Complete Forms by Deadline, Take Steps to Reduce Income

MILWAUKEE, Jan. 22, 2014

Families with one child in college, an annual income of $180,000 or more, and typical assets are unlikely to qualify for federal or state financial aid. But even families above this income threshold can struggle with the significant financial commitment of funding a college education, the cost of which is continuing to rise at a rate of roughly 6% annually. What advice does Susie Bauer, 529 Plan Manager for Baird’s Private Wealth Management group, give high-net-worth families who suspect they won’t qualify for financial aid and are inclined to skip submitting the forms altogether? Don’t do it.

Don’t miss January deadlines for financial aid forms
According to Bauer, many high-net-worth families fail to complete either the FAFSA, the Free Application for Federal Student Aid, or the more detailed CSS Financial Aid Profile, and this is a big mistake. “Our clients often ask why they should bother filling out the FAFSA or CSS profile if they don’t qualify for financial aid,” Bauer said. “We tell them that failure to do so will take your student out of the running for even merit-based scholarships or grants. Many schools offer scholarships to get the students they want and failure to complete these forms may mean leaving money on the table.” Families must also complete the FAFSA to get access to federal loan programs.

Bauer encourages families to complete these forms each year, especially as your circumstances may change. “The whole financial aid equation is complicated,” she said. “For example, you may find that having a second child in college changes the equation and aid may become available.” The current-year forms are posted in January and the earlier you submit them, the better. This article provides an overview of all financial aid options including grants, loans and scholarships.

Steps you can take to reduce your income
Financial aid is primarily based on your income, as well as a portion of your assets. The formula also counts student assets and income at a higher rate than the parents’. “While you cannot “hide” assets or income on financial aid forms – a commonly asked question – you can take steps to “spend down” certain assets or defer income, which is a smart move,” Bauer said.

For example, fully funding your retirement directly reduces income and adds to your retirement assets, which are not counted in the financial formula and will not jeopardize financial aid. If possible, it also can help to defer income from one year to the next. Finally, if you have money in a savings account, consider using it to pay down your mortgage. You are not expected to use your home equity to pay for college, but you are expected to tap your savings.

Qualifying for Financial Aid” provides an overview of how the annual Expected Family Contribution (EFC) for a student is calculated. To schedule an interview with Susie Bauer on this or related topics, contact Amy Nutter, Baird Public Relations, at (414) 765-3988 or anutter@rwbaird.com.

About Susie Bauer
Susie Bauer is the 529/UIT Manager for Baird, where she has worked in UIT marketing since 1997 and 529 plan marketing since 2000. Additionally, she is a trainer, and conducts e-learning sessions and educational presentations for Baird associates. Susie serves as chair of the Securities Industry & Financial Markets Association’s (SIFMA) 529 Working Group. Susie earned a bachelor of fine arts degree from the University of Wisconsin-Milwaukee and a Master of Arts degree from the University of Illinois in Champaign-Urbana.

About Baird
Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has more than 2,900 associates serving the needs of individual, corporate, institutional and municipal clients. Baird has more than $100 billion in client assets. Committed to being a great place to work, Baird ranked No. 9 on FORTUNE’s 100 Best Companies to Work For in 2014 – its 11th consecutive year on the list. Baird’s principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s investment banking and private equity operations. For more information, please visit Baird’s Web site at rwbaird.com.

For additional information contact:

Amy Nutter
Baird Public Relations
414-765-3988