January 1 was the first day that next fall’s crop of college students could submit their FAFSA—Free Application for Federal Student Aid. This 136-page form determines whether students are eligible for federal grants, loans, and work-study.
While tempting to procrastinate filling out the form until the June 30 deadline, it’s smart to do it earlier rather than later. Many states use the information to determine aid awards, and those deadlines are as early as Feb. 15. To find out the deadline for your state, go here.
Colleges and some private financial aid organizations also use the FAFSA to determine aid offers. Knowing what your family is expected to contribute and what help is available early can help in deciding which school to attend.
While the cost of college is increasing, so is the amount of aid available to students. (See October blog post.)
Tuition and fees at public four-year colleges and universities have increased at an average annual rate of 5.6 percent beyond inflation over the past 10 years, according to the College Board Trends in Higher Education 2010. Despite rising published prices, the amount students have actually paid (once grants and tax breaks are considered) has increased more slowly than the Consumer Price Index over the past five years. Pell Grants alone have provided $28.2 billion in grant aid for 7.7 million students in 2009-10. This is an increase of almost $10 billion from 2008-09.
Filling out the FAFSA is the first step in the financial-aid process. You can choose to do it online (processes in 3-5 days) or by paper (processes in 7-10 days).
You need to pull together lots of records of income earned last year before you get started. You can print out a FAFSA Worksheet before you enter the information.
Families don’t have to wait until they’ve filed taxes to complete the FAFSA, says Mary Fallon, spokesperson for Student Financial Aid Services Inc, a fee-based student aid preparation and advisory service. A student can estimate his/her adjusted gross income and file a FAFSA before filing income taxes to “hold a place in line,” she says. Then, later, the family can adjust the FAFSA with the corrected amount.
Accuracy and speed are the best guarantees for students to receive the most financial aid possible, adds Fallon. Answering questions incorrectly can lower your aid amount. Federal law allows students the option of getting professional help from a fee-based service such as Student Financial Aid Services. The company also assists low-income families who can’t afford its services.
Fallon says a student can tell quickly that the professionals are not a scam if the company’s Web site home page explains the “free” do-it-yourself alternative on the Dept. of Education’s Web site and doesn’t suggest a student “game” the financial-aid system.
The College Board offers good information here about how to complete the FAFSA, complete with free resources to help you in the process.
For a quick glance at your financial-aid eligibility, go to the FAFSA4caster.