Federal Financial Aid for College Students – A FAFSA Primer

As the cost of a college education continues to rise, more and more people are becoming familiar with the Free Application for Federal Student Aid (FAFSA).  There are many things to consider when applying for federal financial aid, below are some key points the FAFSA.

Planning Ahead
It makes sense to learn about the FAFSA now, even if your child isn’t going to college for at least a year. The FAFSA assesses the student and parents’ income, investments, and other financial resources, and arrives at a number called the EFC, short for Expected Family Contribution. This is the amount the family is expected to pay before becoming eligible for need-based aid. 

The online version allows you to test those numbers in advance. Some financial planners have specific training in college planning that can help you at any stage of the savings game, you can find planners that specialize in college planning at Planner Search. 

Applying for Aid
It’s important to know that the U.S. Department of Education is phasing out the paper version of the FAFSA, so you’ll have to apply online, here is the information you’ll need to complete the form:

1. The student’s Social Security number
2. Driver’s license number
3. The student’s recent tax information
4. The parents’ most recent federal and state tax returns (for students registering as dependents)
5. Bank account and investment information
6. Documentation forms for resident aliens.

Applicants also need to indicate their school choices so the government can forward financial data to those schools.   It is important for both the student and parent to apply for PIN numbers even before starting the FAFSA application.  PINs allow you to “digitally sign” the form, significantly speeding up the process. But they take several weeks to arrive, so apply early.

Recurring Applications
Students who have already applied for financial aid with a FAFSA don’t have to redo the form from scratch each year. The Renewal FAFSA retains much of the data in the original form (demographics, mainly) and allows updates for financial data like adjusted gross income, taxes paid and asset information.  Students must file the renewal FAFSA each year if they want to be considered for aid.

FAFSA Deadlines
2007-08 school year:
• FAFSA on the Web applications must be submitted by midnight Central Daylight Time, June 30, 2008.
• Corrections on the Web forms must be submitted by midnight Central Daylight Time, September 22, 2008.

2008-2009 school year:
• FAFSA on the Web applications must be submitted by midnight Central Daylight Time, June 30, 2009.
• Corrections on the Web forms must be submitted by midnight Central Daylight Time, September 15, 2009.

It’s also time to check your own chosen state and schools’ financial aid deadlines, which typically arrive sooner than the FAFSA deadline and have a separate application process. Some states start as early as this month, and they’ll want a completed FAFSA with any additional materials they require, state overview. Keep in mind that many private schools also require something called the CSS/Profile to determine financial aid eligibility at that level.

This post is produced in association with the Financial Planning Association (FPA), the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.

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