2012 is here and that means financial aid season is just getting started. If you or someone you know is thinking about attending college at any point between now and the end of the 2012-2013 school year, be sure to read on so you understand why the FAFSA is so important and how you can fill it out and get it on file.
Free Application for Federal Student Aid (FAFSA)
The Free Application for Federal Student Aid (or FAFSA, for short!) is a standardized application for U.S. college students who are interesting in applying for federal funding to pay for their educational costs. With this one application, you will automatically be considered for all federal aid programs, and many other scholarships will want a copy for their own processing, as well.
Who Gets Federal Aid?
Federal financial aid is generally distributed to students based on their financial need. A function calculates how much his or her family earned last year, and decides the appropriate level of costs they can afford to help with. If that amount is too low to pay for a program of average expense, some amount is chipped in from the government to help that student pay. These grants never have to be paid back!
In addition to the Pell grants, students may instead qualify for student loans at discounted rates. Instead of borrowing from a bank, they can get better interest rates with a direct loan from the government. In addition, all finance and interest charges will be deferred while the student is in school. While the subsidized loans must be paid back, they still offer a superior deal to private student loans. Unfortunately for many, there is a limit to how much can be borrowed in this way and it might be necessary to take out additional loans through a private lender.
If you’ve already finished your tax returns for 2011, filing a FAFSA has never been easier. If you haven’t done your last year’s taxes yet though, it might be a good idea to get that finished first. Of course, that might not be possible due to accounting issues, but the sooner you can get all of that financial information together the better. If you’re a dependent or under the age of 24, you’ll have to work with your parents on this so try to be insistent, yet respectful, about how important it is to get it done early.
When your financial records are in order, simply head over to the FAFSA web site and register for a PIN number. This PIN is your personally identifiable log-in that will be associated with your account, so be sure to store it in a secure way. The actual application won’t take long at all, but what is critically important is how you use it.
Other uses of FAFSA
Since Federal funding for education is primarily based on a family’s individual income level and financial need, the FAFSA is also basically a printable copy of your tax return that might be used by thousands of colleges or scholarship programs that consider financial need. So even if you don’t think you’ll be eligible for federal grants or subsidized student loans, it is still a good idea to complete the application and keep a copy of the document for your records and future applications.
Institutional Aid Applications
Almost all colleges offer their own internal scholarships and financial aid opportunities – and almost all of them want to see your FAFSA application when they’re deciding how to hand it out. Again, even if you don’t think you’ll be eligible for the need-based awards because you or your parents earn too much money, it is still vital to include the FAFSA in your applications because a universal application may still be used for various merit-based and interest-based awards.
Each school sets its own deadlines for receipt of institutional aid and scholarship applications, so be sure to check early with them and set your FAFSA’s school codes to match the places you might want to attend. It is critical to emphasize how important speed is: All of these funds are available on a first-come first served basis, so those who wait and procrastinate are unlikely to see a dime.
Scholarships and other sources of funding
While the government and the schools themselves are the largest sources of funding for college students, there are many other ways to earn cash for tuition and expenses. Scholarships, grants, and various competitions are available to competitive students who need a little bit of financial help. Again, many of them will be looking for your FAFSA information in your larger scholarship application file, so it is just another reason to get the FAFSA done!
When you’ve completed your federal and institutional applications, it is time to start searching for scholarships you’re eligible for and deciding which ones to apply for. It can be a daunting task, but if you follow the steps outlined here you will be well on your way to earning more money for college – and that means avoiding more debt!