Money for College: What You Need to Know about the FAFSA

I remember being shocked at the price of diapers when my girls were little. Now we’ve got college tuition to figure out.

Criminy. Kids are crazy-expensive.

Fortunately there are ways to mitigate the sticker price on a college education. Federal financial aid is one of the methods we have to help afford the mind-boggling costs we’re up against, and the infamous FAFSA (Free Application for Federal Student Aid) is the key to unlocking that.

I’ll explain what the FAFSA is, what it provides and why it’s so important. AND…why you should always, definitely complete and submit the FAFSA form (even if you think you make too much money to qualify).

Know what the FAFSA is.

The sole purpose of the FAFSA is to determine your family’s Expected Family Contribution (EFC), which is the amount the government believes your family can chip in for college that year. The EFC qualifies students for federal financial aid, including:

• grants and scholarships (which you don’t have to pay back)
• work-study jobs (part time work your teen does, typically on campus)
• loans (paid back after graduation)

The EFC is also one of the main factors used by colleges to determine how much your family can pay relative to the cost of the school and what that college will contribute to your family’s financial aid package.

In fact, you can figure out a good estimate of what your EFC will be by using one of the many calculators available online. Try out the College Board’s EFC Calculator if you’re curious.

Know where to find it.

Thankfully, the form is online – I remember the green FAFSA forms I used to have to hunt down from the financial aid office every year back in the day.

Go to www.fafsa.gov to complete the FAFSA. To make things even easier, you’re able to import your tax information directly from the IRS website. Oh, how I love that it’s 2016.

Submit the form. No matter what.

Many families think that their household income is too high and so they won’t qualify for financial aid. Not true. There’s no income cut-off that disqualifies a family from aid, so not completing the form essentially means you’re likely leaving money on the table.

Other factors, such as the number of students in your household who are attending college at the same time, will affect your eligibility for aid. And even if you don’t qualify for federal grants, the unsubsidized Stafford loan and the PLUS loan are available without financial need. You can be rolling in the dough and still qualify for these loans.

Seriously, moms and dads. Complete the form.

Complete the FAFSA early.

For the 2016-17 school year, the FAFSA was released on January 1, 2016, and should be completed asap; the start of the financial aid season is when there’s generally more money available to give away.

The ultimate deadline for submitting the FAFSA for the 2016-2017 award year is June 30, 2017. But I absolutely, 100% recommend you complete that much earlier – many states and colleges have earlier deadlines for applying for their state and college financial aid.

Check out each state’s deadlines at https://fafsa.ed.gov/deadlines.htm, and contact each college directly to find out when those deadlines are.

Know how to list colleges on the FAFSA in the right order.

FAFSA results will be forwarded to your state for financial aid consideration. Some states require that your teen list an in-state public college first on the FAFSA’s college list in order to qualify for state financial aid.

Again, repeating for emphasis – make sure that state college is listed first!

Check out the National Association of Student Financial Aid Administrators’ State Financial Aid Programs page for more information about what your state offers for grants and/or scholarships and how to apply.

Understand what happens after it’s submitted.

You’ll receive link to a document called the Student Aid Report (SAR) via email within 3 to 5 days after submitting it online, which will show your Expected Family Contribution (EFC). The schools that you’d listed on the FAFSA will have access to this information within one day after it’s processed.

You won’t actually see how much financial aid you’ll receive on the SAR, rather that information will come from the colleges that you’d listed on your FAFSA. They’ll calculate your aid and will send you an award letter to let you know how much aid you’re eligible to receive from their particular school, as this varies between institutions.

Appeal financial aid packages if necessary.

The FAFSA doesn’t cover every detail about your income and expenses, so make sure you connect with the financial aid office if there are other circumstances to consider. This could include things like a parent losing a job, a divorce or separation, medical expenses or a disabled sibling or parent. Think about hardships that may interfere with how much you can reasonably pay.

Additionally, if other colleges have offered your teen better financial aid packages, you could potentially use that information as leverage to negotiate for higher scholarships or merit aid at another college. Just don’t use the word “negotiate” – it’s distasteful, and no one likes a pushy parent. Simply ask if anything else can be done to further compensate based on merit. See the financial aid folks as partners, not adversaries.

 

Now don’t forget – the FAFSA is only one piece of the financial aid puzzle. Make sure your teen is applying for scholarships, as well. Learn about 4 easy ways to find scholarships – they’re out there for everyone!

Let’s continue the discussion! Thoughts on this post? Please leave a comment below!