Paying For College Part 3: Are you Making the Biggest Mistake of All?

Your kids are headed towards college. How will you pay for it all? You're losing sleep over that question. You're not rich by any stretch of the imagination, but you think you have far too much money to qualify for financial aid. Here's a tip: that assumption can cost you big-time.

Not that you're alone. Most parents, middle-class and beyond, believe they make too much to qualify for aid. And they don't even bother to look. Big mistake.

There are different types of financial aid offered by colleges and universities. And not all of them are "needs-based." Sure, some of them are, but there are plenty that are not. Not by a long shot.

In fact, there are many "merit" based grants, which are based on academic achievement and have absolutely nothing to do with financial need. And no, you won't have to have little Einsteins either to get them. In fact, having a high GPA counts for less than you think when it comes to qualifying for merit based grants. Depending on the child’s skill sets and talents, it is possible to obtain merit awards with a 3.0 GPA.

There are also special incentives that come from some colleges directly. They're competing for students, believe it or not. So if a college wants to attract your child, you may very well be offered a tuition discount to entice your child to attend if he or she is marketed effectively. And no, your income will have little to do with it.

However, to have a chance at any of these offers, you must apply for financial aid. Even if you are a high-middle income, high-income, or high-net worth family that won't qualify for need-based financial aid, you still need to apply. Don't worry that you probably won't qualify for need-based aid. You'll definitely qualify for something. Even regular financial aid is available no matter what your income. Sure, it won't be a grant and it will have to be paid back, but you can get a loan at rock bottom interest rates basically for the asking.

If you are new to the college funding game, most likely you are not aware of the strategies you can use to increase your chances of receiving financial aid. You probably don’t even realize that there are strategies. And few people will volunteer them.

Clearly, there is more to planning for college than simply reaching deep into your pockets or applying for loans. Most parents have no idea what kinds of possibilities are out there, and this can leave them wide open to getting overwhelmed by the system which will now work against their best interests and can cost them thousands of dollars of potential savings. And you too, if you're in their shoes.

Just realize that it makes no difference in which income and net worth bracket you are. Planning for college expenses can save you money. You can even get the government to pay for a good piece of your child's expenses. But only if you plan ahead.