Complete the FAFSA: Know what's on it BEFORE you fill it out

Students who are prepared for the SAT’s are statistically more likely to perform well on them than a student who did not prepare for nor had no prior knowledge of what the test would consist of. The same can be said of the FAFSA, or Free Application for Federal Student Aid. Knowing what’s on the form will enable you to be more effective when filling it out, as there are a number of documents and pieces of information that must be collected in order to validate your information. This will result in getting all of the financial aid you deserve, whether that be loans, grants, scholarships, or work study.

The best way to begin is to download a FAFSA from the US Department of Education website. FAFSA’s are also available on most school’s websites. Study the form, and collect the documents requested. In general, the information you must provide will include:

*Your income and personal information. Your full name, address, date of birth, social security number, etc. All income earned from all sources, including dividends earned on investments. This will include providing your most recent year’s tax returns.

*Your parent’s income and personal information. Their full names, birthdates, social security numbers and more. If you are a dependent student, your parent’s income information will determine how much aid you receive.

*Your student status is a primary question on the FAFSA: Are you part time or Full time? Dependent, Independent, or Independent with dependents?

*Military service. You must indicate on the FAFSA whether service is active duty, reservist or Veteran.

*Information about the school/ program you intend to enroll in

*Information regarding your interest in non-loan programs, such as scholarships and grants

*Your parent’s education history

*Information regarding your criminal history is required on the FAFSA, as some drug convictions can bar you from receiving awards.

*Your marital status

Being prepared by having these documents and pieces of information available can go a long way toward getting you the financial aid you need. In fact, if you have this information available, completing the FAFSA can take as little as 25 minutes. However, if you don’t understand something on the FAFSA, you may use the help feature on the US Department of Education’s website, or ask a financial aid official at your school.

Where do you stand? The FAFSA and Your Student Status

Many students find themselves confused about their student status as determined by the Free Application for Federal Student Aid, or FAFSA. Student status is used to calculate available loan, grant, scholarship, and work study programs. Because the FAFSA generally awards these programs to students with financial need, the establishment of student status is crucial in making financial need determinations. However, many students fill out their FAFSA using the wrong student status, resulting in delays in loan approvals, and the possible loss of a class if it fills up before all FAFSA issues have been resolved. Therefore, understanding your status is essential to effective use of the FAFSA.

You don’t really need to figure out if you’re one or the other- you only need to figure out if you are NOT independent. Independent students are those that:

*Are married at the time of FAFSA

*Are 24 years old or older as of December 31 of the FAFSA award year

*Are enrolling in a Master’s or Doctoral program

*Were an orphan or ward of the state

*Parents were deceased after age 13

*Were legally emancipated (special conditions apply)

*Were determined to be a homeless youth by a state-approved youth services facility

*Have dependents that get more than ½ their support from student

*Have dependents that live with student and receive their support from student, including dependent adults

*US Armed Forces Veterans

*Military members on active duty (for other than training purposes)

If you do not fit into one of these categories, chances are that your student status is dependent according to the FAFSA. Some exceptions may apply. Students that do not communicate with their parents or those that come from abusive homes may be able to get a dependency override. Regardless of the situation, all students who do not clearly fit into one of the described statuses above should speak to financial aid counselors at their school in order to determine the correct status to use.

FAFSA Application Questions

The FAFSA or Free Application for Federal Student Aid is the comprehensive form that all college students must fill out in order to determine eligibility for college money. This form is comparable in content and length to the IRS 1040 form, but may have additional questions for students with financial need. You would think there would be dozens of companies out there trying to get you to hire them to help you fill out the form. Well, there is not. There is only one mainstream company that you can hire to help you file the FAFSA. Or, of course, you can do it for free with the help of the contractor of the federal government. They do have a call center staffed with highly trained, er more like sweat shop workers that are happy to answer your questions and walk you through anything. Of course, as long as you can do it in under 3 minutes!

So how on earth are you supposed to answer questions like, "IRA deductions and payments to self-employed SEP, SIMPLE and Keogh"? Wow, would your accountant even know that? Well, of course they would, but that is not the point. The FAFSA application questions are pretty tough and you want to make sure you know exactly what you are doing so as to not cheat yourself out of any federal aid by making mistakes.

You can always go to the FAFSA site and go through a worksheet first to make sure you have all the information handy when you start the application. Most colleges offer a "Super Sunday", where you can go down to the college with all your information and there are people there ready to help you submit your application.

Whatever you decide to do, please make sure you know the FAFSA application questions before you start.

College is a Privilege, not a Right!

Going to college and getting a degree is almost a necessity in the US today. Statistics have been published that indicate college graduates make something like one million dollars more in their lifetime than a high school graduate. This is not the case for 100% of the people in this country. Bill Gates, Paul Allen, and Sheldon Adelson are all college dropouts.

Back to my point. I have met so many teenagers that are about to graduate that are getting a hard dose of reality when it comes to paying for college. They think that going to college and getting a degree is a birth right and they get mad when they realize how much a degree actually costs.

So you want to go to a party school or an out of state college? Plan on shelling out tens of thousands of dollars to go. If you think that financial aid is going to pay for it all, think again.

If you and your parents are living below the poverty level and you are eligible for the most financial aid possible, you are only looking at about $15,000 total for the entire year. That includes a full Pell grant, FSEOG grant and the maximum Stafford loan.

It is VERY hard to get a full Pell and FSEOG; they are reserved for people with very little money, not very little money for college.

Community College vs State School

I get questions all the time asking me if students should go to a community college or a state school first. These are also the same students who are asking about or looking for money for college. If you do not have enough money for college and the financial aid offers are not pouring in, then you should DEFINITELY consider going to community college for 2 years first. In my area of the country community colleges are about 25% of the cost of traditional 4 year schools; and the education is the same.

Not everyone is going to be able to attend an Ivy league school for all four years, so it is best for you to plan for your life right now. That is going to include planning for the debt you are going to incur. I will always suggest going to community college first.

FDSLP

I have had a couple of questions recently about the FDSLP. This is the acronym for Federal Direct Student Loan Program. It is the blanket term for all the direct student loan programs for college students. It includes subsidized and unsubsidized student loans, consolidation loans, and PLUS loans. All direct loans are now serviced and funded by the United States government.

Are student loans credit based

It seems like these days students are having to take out more and more in student loans. College is getting more expensive and the government is certainly not giving out more and more money.

Students have to rely on student loans to get through college and earn a degree. It is very hard to get grants and scholarships, as they are reserved for people with very little income.

There are great federal student loan programs out there like the Perkins loan and the Stafford loan. The Stafford loan is is the most popular option for students these days.

The big question is, are student loans based on your credit?
Most students come into college with zero credit and it is pretty stressful thinking you have to have credit to get a student loan.

The answer is no; federal student loans are not credit based. Your school will not even check your credit and unless you have another student loan in default, you will be approved.

WAIT....

Just because the loan is not based on credit does not mean that it will not affect your credit report. Your federal student loan WILL be reported to the credit agencies. This is good though, as paying it back will help you build great credit for your future.

If you decide not to pay back your student loan, your credit can be ruined for a long time. Additionally, any tax refunds or stimulus checks due to you will be intercepted to pay off the debt, so make your payments.

Scholarship entry fees

I have been asked several times over the past week or so about paying an entry fee for a scholarship.

This is a very touchy subject that gets lots of attention from school administrators and government officials. There is no right answer to the question and there are pros and cons to the situation.

First of all, there are legitimate scholarship granting companies that offer scholarships and don't charge an application fee. They are hard to find and you must do your research. There are also companies that charge an application fee to enter the scholarship contest and give tons of scholarships, as well as companies that charge and never give a single one.

Lets say you enter a scholarship contest where there is a $5 entry fee. The company says they are going to give out 5 $1000 scholarships. Well this is fine if only 1000 people or less enter the contest, but this is usually not the case. What happens if 10,000 students enter the contest? Looks like the company will make a hefty $45,000 profit for not really doing much.

I have found scholarships that do give 100% of the money from application fees back to students. Of course everyone who enters will not receive a scholarship.

There might also be issues with this type of scholarship being a lottery or game of chance. Those are generally illegal in the United States. This is why most companies require that you submit a scholarship essay of some sort. This takes away the element of chance in the contest.

Whether the application fee is $1 or $100, please conduct research on the company you are applying to. Also, you can always check the BBB in your state.

FAFSA Dependancy Override

I get questions every day from students who believe they should be considered an independent student in the eyes of the FAFSA. Unless a student is 24 years old by January 1st of the school year they are going to attend, have a child, are married, have a 4 year degree, have other dependents, or are a military veteran, then the student must provide parental financial information on the FAFSA. I know this does not sound fair because some students are on their own after high school. Your parents are not going to help you with college, or maybe you just want to get out and want to do everything on your own. Well, this is not the case most of the time. Even if your parents are not claiming you on their taxes anymore, you still need their financial information.

There is an exception to this rule called Dependency Override. A dependency override is when the financial aid office at your school determines that you should not have to use your parents information on your FAFSA. This sounds really great, but in all actuality, it is very hard to get a dependency override from your school.

Here are some reasons why your school will NOT give you a dependency override:
1. A student says that they are on their own and the parents do not help out at all.
2. A parent is unwilling to give the student any financial information
3. A parent no longer claims the student on tax forms.

Here are some reasons why your school would grant a dependency override:
1. You are or were living in an emotionally or physically abusive household.
2. You left a household that was unsafe.
3. Parental abandonment of the student.
3. The custodial parent is incarcerated.
4. The student was removed from the parent's house by court order.

The first step in applying for an override is to talk to the financial aid office at your school. You should do this before attempting to file your FAFSA. The financial aid office will review your dependency override case and tell you what steps you need to take to file your FAFSA.

Most financial aid offices are going to ask for detailed documentation regarding your situation and will probably ask for letters from adult mentors in your life to back up your story.

The school has the final word on your override and you can not appeal it to the school or the federal government. If you truly are in a situation where a FAFSA dependency override is necessary, then your school will give you one.

All schools might have different criteria on granting the override, so if you had one at one school and then change schools, it is not automatic that you are going to be granted one at your new school.

Back to the FAFSA Blog

Wow, I am amazed to see that it has been over 2 years since I have posted a blog! I am back now and ready to start writing about the FAFSA and financial aid again.
Stay tuned..
FinAidGuy