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Tips for Completing the FAFSA
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Each year, June 30 is the online filing deadline for the Free Application for Federal Student Aid (FAFSA). (Note: State governments have their own deadlines for their forms.)
FAFSA is the form the federal government requires before you can qualify for any federal education aid. Today, the application is an online process on the U.S. Department of Education’s Federal Student Aid website. It’s a lengthy process, but the site takes students and parents through each stage step-by-step.
Even if your child isn’t headed for school for a few years, it makes sense to go over the FAFSA form as soon as possible. The form assesses the student’s and parents’ income, investments and other financial resources, and arrives at something called an EFC number, short for Expected Family Contribution. The online version allows you to test those numbers in advance. A college takes your EFC and does a simple calculation, taking the total cost of attendance, subtracting your EFC and ending up with your total amount of financial need. And based on that computation, the school’s financial aid office will prepare a financial aid package that will be summarized in a letter.
If you’re a student or a parent, here are the main items you’ll need to complete the form:
- The student’s Social Security number
- Driver’s license number (if available)
- The student’s most recent tax return (if available)
- The parent’s most recent federal and state tax returns (for students registering as dependents)
- 2009 untaxed income records
- Child support received
- Workman’s Compensation
- Veteran’s non-education benefit records
- Bank account information
- Documentation forms for resident aliens.
Here are a few starting points on the financial aid process:
If you’re not sure about your overall college finances, get advice first. A CFP® professional can start by helping you sort out your finances and affordability options for various college choices.Also, planners can tell you what assets should and should not be included on the FAFSA form to give you the maximum opportunity for aid.
File early. Federal deadlines are firm, and keep in mind that during the economic crisis, state budgets for college aid are tight, and those deadlines are generally earlier anyway. Get the necessary application information in early to be first in line for grants—the best form of college aid because grants don’t have to be paid back.
Bring your tax professional into the discussion. A financial planner can offer extensive advice on the college planning process, but tax professionals can help you find more tax-efficient ways to structure your finances and plan for college that won’t negatively impact your ability to qualify for financial aid.
Stay close to the financial aid office throughout the process. Not only is it important to make sure the necessary paperwork is in the aid office at each of your student’s chosen schools, it’s important to keep the aid office informed if there’s a sudden change to a family’s financial circumstances, such as a job loss or change in marital or health status.
Focus on scholarships and grants. Employers, clubs, fraternal societies, trade associations related to your field of study, professional networking associations related to your eventual career (many of these groups have chapters at colleges) and companies that employ parents or summer interns are great potential resources for scholarships and grant money. If any of these options have a scholarship fund, do whatever it takes to find out about qualifications for these programs. Though with so many states in budget trouble, it makes sense to keep an eye on any grants you receive from local or state government. It’s entirely possible that public funding shortfalls can endanger grants when the student needs to pay bills.
This article was submitted by the Financial Planning Association, the membership organization for the financial planning community. FPA members are dedicated to supporting the financial planning process in order to help people achieve their goals and dreams. Submission of this article does not imply an endorsement or recommendation of the Financial Resource Center site.
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