College costs a lot of money! And every extra dime you can get to help pay for those costs will be greatly appreciated either by you if you’re footing most of the bill through work or loans or by your parents. Your best resource for gathering as many of those extra dimes as possible is the FAFSA.
First, you’re probably wondering what the FAFSA is. The acronym stands for Free Application for Federal Student Aid. It’s a simple application that can be filled out online or you can pick the forms from your high school counselor or your college’s financial aid office. Completing the application takes less than 30 minutes but it can net you some much needed cash for college.
FAFSA: The Doors it Can Open
You may already know that the federal government has a student loan program. And we’ll talk more about that in a minute. But you may not know that the government also gives out grants to college students whose families’ income falls below a certain level – and, don’t worry, you don’t have to be homeless or on welfare to qualify for these grants.
For the 2008-2009 school year, the maximum Federal Pell grant award is just over $4,700 a year. Of course, if your school isn’t very expensive or your income is on the higher side, you may not receive the full amount. Just remember whatever you do receive doesn’t have to be paid back so even a small amount can significantly help reduce your post-college debt.
The FAFSA can also hook you up with work study programs at your college. These are fairly easy jobs with flexible hours that usually pay minimum wage but which can help supplement your cash flow without interfering with your class schedule the way off-campus jobs often do. If you receive any type of Pell grant, you should also be eligible for work study. Just check with your college’s financial aid department to find out what options are available.
Finally, the only way to be eligible for Federal student loans is by completing the FAFSA. And that includes the Federal Plus loans your parents can take out for you. You’ve probably seen ads for private student loans that make them seem wonderful – quick access to the cash, higher borrowing limits, and no long applications to complete. However, the federal student loans do have a number of advantages, including more income-sensitive repayment plans, programs to forgive loan amounts in exchange for certain types of service, and more.
Also, the FAFSA doesn’t just determine your federal aid either. Most states do offer grants to college students as well and most states use this application to determine who gets what. The amounts available through the states vary – they can range from a little over $1,000 to as much as $7,000. Again, that may not cover your entire tuition but it would certainly help.
If your college offers any type of scholarships based on financial-need, then you will also have to complete the FAFSA to be eligible for those.
The bottom line is even if you’re not sure whether you are eligible for any type of financial assistance for college you owe it to yourself and your family to find out by completing the FAFSA.
FAFSA: Basics
Now that you know why the FAFSA is important, let’s look at some important information you should know before completing the application.
First, you should know there is a deadline. The application has to be completed by June 30th if you’re going to receive federal aid. However, if you want state aid then you’ll need to start working even sooner. Deadlines vary by state: some are as early as February 15 while others have deadlines beyond June 30th. You can find the dates for your state online or by checking with your financial aid office.
Second, it’s usually best to have your taxes completed BEFORE you do your FAFSA. That’s because you will be asked questions about your taxable income for the previous year. You can complete the application without your taxes being done but then you’ll have to estimate everything and add in the real numbers at a later time.
Third, be prepared to enter your family’s income. Even if you live alone, you still have to claim your parents’ income on your FAFSA, except in a few situations. For example, if you are married or have a child of your own, then you’re considered independent and only need to provide your income information. If your parents are divorced, you only have to enter the income for the parent who provides the most financial support for you.
FAFSA: What You Should Expect
I’m not going to lie to you – the FAFSA can be daunting, especially the first time. It does contain about 100 questions and covers about 8 pages. However, you can go through these questions pretty quickly if you have your tax information handy. Plus, if you complete the form online, you can save your progress and return later to complete it.
Once you complete the form and submit it, you will receive a SAR (Student Aid Report). This arrives in 3 to 5 days if you submit the form through the website or a couple of weeks if you do it the old-fashioned way. Basically, the SAR summarizes all of the information you’ve provided and tells you what the government has determined your EFC (Expected Family Contribution) to be. The lower the number the more money you’ll be eligible to receive.
Look over the SAR and make any changes that are needed. If everything is correct, you don’t have to do anything else. The information is sent ahead to your college (you provide that information on the FAFSA) and your college will contact you with the specifics of what you have received.
The good news is that after you complete the FAFSA the first time it gets even faster because most of your information is carried over to the next year and you just need to update your financial information.
Remember the FAFSA only takes a few minutes to complete – less time than watching an episode of American Idol – but it could earn you thousands of dollars in grants, access to more flexible federal student loans, and even work study programs. It’s definitely worth the effort!
