If you hope to score any need-based aid, you must complete the Free Application for Federal Student Aid. Many families assume they won’t receive aid and don’t bother to file the form.
Even if you are certain you fall in the “no-need” category, it is still recommended that you fill it out because the FAFSA is required for certain loans, including Direct Student Loans and the PLUS (Parent Loan for Undergraduate Students), that don’t rely on income.
Since home equity is not factored into the FAFSA formula, many “house-rich/cash-poor” families are pleasantly surprised to find that they qualify for need-based aid. Also, the FAFSA does not request information about your retirement accounts.
The FAFSA also provides a few perks:
• For being older. Depending on the oldest parent’s age, a certain amount of money is excluded from consideration.
• For having more dependent children. The Expected Family Contribution is exactly what it says – the expected contribution from the family; whether there is one child in college or two or three. So families with multiple children in college simultaneously will benefit.
Tips for getting started
• Head to the right site, www.fafsa.ed.gov. There are plenty of imposters. Don’t be duped by advertisements that offer to complete your FAFSA for you for a fee or guarantee scholarships.
• Get your PIN. Even if you’re not ready to complete the entire FAFSA form, get your PIN and start collecting the necessary paperwork. You don’t need to have your 2014 tax statements finished. You can use your 2013 statement and update the FAFSA when you have the new information.
• Check assets. Be aware that the assessment on a child’s assets is 20 percent, whereas it is just 5.64 percent on parental assets. Be cautious about monies in your child’s name.
• Check your bank accounts. The FAFSA doesn’t ask about any debts you have or unpaid bills, but it does want to know how much money you have in your savings and checking accounts. Less money in your accounts could mean more aid.
• Less education could mean more money. Some states and some schools provide more aid to families with lesser levels of education. That means if you were one course shy of a bachelor’s degree, the government considers you to be a high school graduate, not a college graduate.
• Utilize the FAFSA resources. There are some wonderful tutorials, videos, handouts, articles, etc., designed to simplify the process. If you still find this process overwhelming, investigate the Free FAFSA Workshops that are offered most places. Check out www.collegegoalsundayusa.org.
Lee Bierer is an independent college adviser based in Charlotte, N.C. Visit her website at www.CollegeAdmissionsStrategies.com.