Learning How to Navigate College Finances

Hartford-based LPL Financial associate Craig Breitsprecher walked Tolland families through some of the pitfalls of college finances on Monday night, at a free lecture sponsored by the Tolland Public Library Foundation.

While Breitsprecher discussed a variety of funding options, from grants to loans, scholarships and work study, he stressed that even high-income families should "explore every opportunity" when it comes to college expenses.

Even FAFSA can provide financial aid for upper middle class families, he said, depending on how the need for aid is calculated. For example, parental assets are only counted in FAFSA at a 5.6 percent rate, and the first $40,000 of those assets are automatically deducted, Breitsprecher explained.

However, assets in a child's names are assessed at a 20 percent rate, with no level of protection in the FAFSA program, according to the lecture. Therefore, the type of financial accounts a family has, as well as whose name they are kept in, can significantly affect the resulting financial aid from the federal government.

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Breitsprecher also discussed many other pertinent financial facts, including:

• Many federal loan programs have a maximum cap over four years
• Private loans may be given with a variable interest rate, which could become as high as 14 to 15 percent in certain cases
• Those with a household income of less than $130,000 can get federal refunds on college expenses up to $2,500 as part of the American Opportunity Tax Credit

Breitsprecher encouraged students to apply to four or five state schools, as well as four to five private schools, in order to use the financial aid appeals process to its full advantage.

He explained that he had peronally seen several cases in which students leveraged acceptance letters from other colleges to raise their financial aid offers at their preferred choice.

"Acceptance letters are worth their weight in gold," he said, calling the appeals process a "powerful" tool for families, especially if the student has a strong academic background.

Breitsprecher recommended that families visit the CT Office of Higher Education website for great information about various college financing options.

Tolland parent Ken Davidson, who has two daughters in school, said that the lecture was very useful.

"I'm trying to find some ideas for new resources to tap," he said, "and I definitely got some new ideas."

The lecture is part of the Year of the Young Adult initiative run by the Tolland Public Library Foundation.

For more information on LPL Financial, visit the company's website.