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Your FAFSA Answers...How Much Will It Cost You?

The FAFSA (Free Application for Federal Student Aid) form is your first step in finding out what college will really cost you, and how much college loan debt you will bear.

Your initial FAFSA year is the year before you fill out the form. Careful financial planning for that year can make a big difference, but any preparation for the answers you will give on the form is better than none.

The answers you supply will:

determine if you qualify for a Pell grant

allow you to be considered for your college's own grants and scholarships

automatically fill out free grant applications in some states. (State college loans and grants are different programs in each state.)

decide how much and which kind of federal aid (loans, work-study programs) you qualify for

Planning Ahead

If you have time before filing to adjust your finances, bear in mind that you should not

allow the student to have assets: There should be no assets in the student's name- all savings plans, investments, accounts, etc. should be under the parent's name(s). Why? Because student contributions are weighed much higher than parents' contributions.

have a lot of cash on hand: Money in savings and checking accounts (parents included) will mean that the student is going to qualify for less aid. If you have money, use it to pay off debts which will not be taken into account when your EFC is calculated.

accept money from grandparents for college: Ask them to wait until the student graduates, otherwise it will count towards the expected family contribution.

withdraw retirement funds: During the base year for your application, do not withdraw money from any type of retirement fund, because this type of investment is not included as an asset.

take out a home equity loan for paying college expenses: I won't say that it is never right to use your home for this purpose, (because in some situations it is) but use a home equity line of credit instead. That way, any unused money won't show up as an asset the following year.

These are the basic mistakes to avoid. Doing what you can to avoid them is a legitimate strategy. Some other strategies are not as legitimate and can get you investigated and penalized. Financial aid administrators are trained to spot inconsistencies and they can recommend investigation by federal, state or local authorities.

A popular (illegal) strategy a few years ago was having a parent enroll in a college at the same time as their child, but then letting their registration lapse after the financial aid application was processed. An enrolled parent no longer counts towards a lower EFC as a result of this widespread fraud.

If you pay a consultant for advice (and each year parents pay thousands of dollars) make sure it is for:

legitimate strategies to manage income for maximum financial aid (FAFSA deferred compensation is what is most asked about)

ways to target the schools which best meet your needs, both financially and academically

and not just for filling out a form which is free to submit.

If you are interested in this type of planning, you can get the same level of professional help (without the huge fees) on the internet. A wider client base allows most consultants to charge lower fees.

(Paragraphs below allow you to access more information about each topic)

What Does FAFSA Stand For?

...and other basic questions answered about the form, such as, why is it used, when should it be filed, who has access to the information, etc.. Learn more about this 'must-do' for financial aid...

The New FAFSA Website...

...has been redesigned for greater security in dealing with your personal information. It has also been made more user friendly with new help features and the ability to skip over questions that do not apply to you. And for 2012-2013, the site will tell you what to do based on your history there. More about the official website...

The FAFSA PIN...

...is your first step in this process, but one you will need throughout your college years (and after). Both student and parent should each apply for one. Read more about the PIN...

The FAFSA Deadline...

...you need to consider is not just the federal one which is the same for all students, but your state deadline- which can occur very soon after the new form is available.

Do not miss out on state grant aid or college financial aid. Both of these are assigned early to students, as well as campus-based programs like federal Perkins student loans and work-study. Check your deadlines every year because they change. See your deadline...

The FAFSA Online Application...

is the quickest and easiest way to complete this form. The online application minimizes mistakes because if contradictory information is entered or if an entry is skipped, you will not be able to advance to the next question until you correct it. Using the online form allows you to receive your SAR (student aid report) more quickly. Before you start it, read about the online form...

A Printable FAFSA Application...

...should be downloaded whether or not you use it as your submission. Anytime you complete an online form, you should make a duplicate hard copy for reference. Storing previous years' FAFSAs (and student aid reports) can also be useful for comparing differing levels of financial aid. See the exact questions before you file with a printable application...

The 2012-2013 FAFSA Application...

came out on January 1, 2012. Changes have been made to this form which make it easier to finish and submit. (And this will definitely increase the number of students who receive aid.) The instructions are clearer, questions have been combined and simplified and the notices for help (both online and phone) are much easier to locate on every page. Learn some best practices to use when filling out the application...

How Much Aid?

Your application results in a number...your EFC (Expected Family Contribution). It is this number that will decide your eligibility for federal, state and college aid. No matter how high this number looks to you, DO NOT GIVE UP HOPE...because even though federal aid is based on it,

each school makes its own decision about what to award students

schools know EFC numbers are artificially high because of federal needs guidelines and they take this into account

you can make corrections if any of your information is wrong

your EFC number is not written in stone- It will change every year as your circumstances change and as Congress makes changes to the EFC formula (It can even be adjusted during the year by a financial aid administrator if there is a documented loss of income.)

FAFSA Corrections...

...some of these you are required to make, because of mistakes or information conflicts. Or you might need to add financial data if you only provided estimates. If you want to add or drop a school on the 2012-2013 form, you must use 'corrections' to do so. But the government does place some restrictions on which information you are allowed to correct. Learn how to make your corrections...

You Will Renew FAFSA Each Year, So...

...you have an opportunity to plan ahead for the next year. Renewal is not automatic. You will manually file every year and your numbers will change.

Maybe your income will go up (or down). Perhaps a sibling will be going to college. You might be living in an area that qualifies for federal disaster relief, or whatever- things change. And if you filed too late to qualify for some state aid this year, you will know enough to do it earlier next year.
See what to expect when you renew...

FAFSA School Codes

Planning ahead does not only mean your finances. Targeting the schools you want to be considered for should play a large role in your financial aid application. By accessing a list of colleges that are eligible for federal financial aid (along with their identifying school codes) before you fill in the form, you can do your research and make the most out of your opportunity to let 10 schools know about your interest. See the entire list of school codes...

FAFSA Verification

Some students are selected by the Department of Education or their colleges to have the information submitted on their applications, verified. In the past the selection process was random, but new regulations are transforming it to be both more efficient and more targeted. Find out how the changes might affect you, as well as learning about the current 2012 verification...

Do the actual FAFSA yourself. You are responsible for the information in it and there is free help available for filling out the form.

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FAFSA Form Partners

The goal of making sure that every student complete their FAFSA has become a collaborative effort between the U.S. Department of Education, state education departments, colleges, and local high schools.

Why?

Think of the FAFSA as not just a federal loan or grant application, but as the semi-official census of post-secondary education. The information you submit does not just affect you, but it helps all these entities make short and long-term decisions about budgets, development and outreach.

FAFSA is the easiest way for them to collect the data they need.

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Get Some FAFSA Help!

A recent study* found that independent (adult) and dependent students who received help filling out the FAFSA form, were more likely to receive federal grants.