Understanding the financial aid application

financial aid formsThe first step in the process of applying for and receiving financial aid – and the most important one – is the Free Application for Federal Student Aid, or the FAFSA. Schools use this application to determine how much and what types of aid you will receive, including federal grants, work-study, loans, and even state or institutional aid.

The application is made available on January 1st of each year for the next school year. (So on January 1, 2010 for the school year starting in the Fall of 2010 and running into 2011). That may seem really early when, as a high school senior, your child doesn’t even know what school he or she will be attending yet. Don’t worry about that – you can have the FAFSA sent to up to six schools and you still only have to fill it out once, per student, per year. Even if your senior can’t decide among more than six schools, you can always make corrections to an application after it has been processed so it gets to the right place.

What’s key to remember is that with all financial aid, the sooner you apply, the better your chances of receiving financial award money.

The federal deadline for filling out the FAFSA is typically at the end of the school year for which you are applying (so for the 2010-2011 school year, it would be around June 30, 2011). However, without the FAFSA, you can’t get the aid when you need it, like when the tuition bills are due. Also, many states have application deadlines for the FAFSA because they use the application to determine how to allocate funds from the state. Some state deadlines are as early as March 1st. Schools themselves may do the same thing, so remember, first-come, first-served!

This doesn’t mean you should get up bright and early on New Year’s Day with your calculator and pencil. The FAFSA requires a lot of financial information you may not even have yet, such as tax returns for the previous year. You can estimate those numbers based on the year before, but then you have to go back and make adjustments later. It’s best to gather all the data you need at once and get it done with the most accurate information. That might mean waiting until you, as parents, or your child, files a tax return. Another great reason not to wait until April 14th to take care of your taxes.

The Department of Education does a great job of preparing you to fill out the FAFSA on their website, including a checklist of all the documents you’ll need. If you know you want to file electronically, before you even have any of the financial information you’ll need, you can apply for a PIN. Your PIN is your electronic signature, so it’s an important number you’ll want to keep safe and not share with anyone. It takes 1-3 days to get a PIN electronically and you can use the same PIN to sign the FAFSA each year. So plan ahead and get that PIN first, keep it in a safe place, and have it ready when you sit down to fill out the FAFSA.

Next: FAFSA – The Form Itself

The quickest and easiest way to file is to use FAFSA on the Web: fafsa.ed.gov. You may also pick up a paper copy from your high school guidance counselor or your school’s financial aid office, and submit it through the mail, although this will take longer to process.
If you are doing the online version, know that you can stop and save your information to come back at a later time. You don’t have to do it all in one sitting – the Department of Education saves your information for 45 days or until the federal deadline has passed.

The FAFSA is available in both English and Spanish and asks questions about:

  • Age and marital status
  • Educational, residency and dependency status
  • Income and household finances
  • Investments, business and farm records
  • The types of financial aid in which you are interested

In order to be eligible for federal student aid, the student must:

  • Be a U.S. citizen or eligible non-citizen
  • Have a valid Social Security number (unless you’re from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau)
  • Comply with Selective Service registration, if required
  • Have a high school diploma or a General Education Development (GED) Certificate or be home schooled

Legislative Update: After July 1, 2012 students will no longer have the option of becoming eligible for federal student aid by passing an approved test or completing at least 6 credit hours or 225 clock hours of postsecondary education.

  • Be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program at a school that participates in the federal student aid programs
  • Not owe a refund on a federal grant or be in default on a federal student loan
  • Not have certain drug convictions (see fafsa.ed.gov for more detail).

Dependent Students

Most typical undergraduate students are considered dependent, even if they live away from their parents and support themselves. For the purpose of the financial aid application, a student is considered independent if she or he:

  • Is 24 or older as of December 31 of the present year
  • Is married
  • Is enrolled in a graduate or other post-bachelor degree program
  • Can claim others (besides a spouse) as legal dependents
  • Is an orphan or ward of the court (or were until the 18th birthday)
  • Is a veteran of any branch of the United States Armed Forces

Good news! Once you have filled out the FAFSA for the first time, it gets much easier the next time. Each student needs to submit a FAFSA for each school year but the renewal process is shorter than the initial application. Just keep your PIN and the same deadlines in mind each year.

For more information on the FAFSA, visit the Department of Education’s website at fafsa.ed.gov.

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