The cost of college tuition is already expensive, and it’s steadily rising.
This financial obstacle keeps thousands of students from being able to continue their education.
There are many scholarships and grants available to help students combat the expenses of college.
To get most of these scholarships and grants, the first step is to fill out a FAFSA form.
The Free Application for Federal Student Aid (FAFSA) is the form that the Department of Education uses to determine how much education assistance you qualify for. Filling it out is crucial in getting financial aid.
The FAFSA plays a strong role in whether many people can afford college or not. Because of this, there are lots of tips to help you fill out the cumbersome application.
Here are the top five tips on filling out the FAFSA in order to get the maximum financial aid.
1. Watch the Deadlines
Some deadlines in life are flexible. The FAFSA is not one of them.
When you’re completing your FAFSA application, watch the dates carefully. There are annual deadlines for different semesters of college.
Each of those semesters will require you to submit income tax info from yourself and/or your parents. Whenever possible, FAFSA requests this information directly from the IRS (with your permission).
If your tax info isn’t available, you’ll have to ask the IRS to send you a hard copy, which can take a few weeks. If you don’t start the process early enough, this can push you past the due date.
Another important reason to watch those deadlines is that other students are applying, too. Many scholarships are granted on a first-come, first-approved basis. When you apply early, you’ll be eligible for most scholarships.
2. Consider Your Assets
The Department of Education reviews your assets, your family’s, or both, depending on your age and living situation. If you have a lot of assets in your name, they will count towards your Expected Family Contribution, or EFC.
The EFC is the formula the DOE uses to decide how much money you’re supposed to pay toward your education while in school. Your income, your family’s income, and the assets in your name all figure into your EFC.
The thing to understand about your EFC is that any assets in your name count at 20% of the formula, whereas assets in your parents’ name count at 5.65%. In other words, if you have a lot of assets in your own name, you’ll be expected to contribute more.
With proper tax planning and the help of your financial advisor, you can place your assets strategically. This advanced foresight will maximize your FAFSA eligibility.
3. Pay Down Your Debt First
It’s great to have cash in your checking and savings accounts. Financial experts even tell you it’s a smart idea to have six months’ worth of bills in your savings account.
But those same advantages are a disadvantage when you’re filing your FAFSA.
Having debt doesn’t hurt your chances, but your savings count towards your EFC. It’s a careful balance that you need to handle as strategically as possible.
Many financial advisors recommend using savings to pay down debts before filing the FAFSA. This gives you the double benefit of having less to pay off during and after school while helping to maximize how many grants and subsidized loans you qualify for.
Paying down your debt is never a bad idea, especially if you can bulk up your savings again after your college expenses are covered.
4. Make Sure You Accept or Decline the Award
Once you fill out your FAFSA, the work isn’t over. The school will then send you a list of financial aid packages to choose from.
All of these offers will be things you qualify for, but you don’t have to accept them. Some will be federal grants, but others will be subsidized and unsubsidized loans. You may also qualify for work-study programs, which allow you to make money during college.
You can decide whether to accept or decline them, but make sure you follow through with an action to continue receiving awards. Leaving an award hanging without a response can hurt your potential to receive those same packages if you try to apply again in the future.
5. File an Appeal if Necessary
In some cases, your financial needs might change between the time you fill out the FAFSA and the time you get your response. That’s okay because you can always file an appeal.
You may have less overhead than you thought you’d have because you chose a cheaper college. In that case, you can decline or request an adjustment of the loan amount. By taking out less money, you’ll have less to pay back.
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Or, you may need more money to cover unexpected expenses. When that happens, there’s a process you have to go through to appeal your current offer.
If your circumstances change or your awards aren’t sufficient for any reason, you can and should appeal the FAFSA. You aren’t stuck with the packages they offered you, even if you already accepted them.
Instead, contact your financial aid office for advice and guidance. Let them know how your circumstances shifted, and they can help you get the funds you need to cover your education.
With most government forms, the filing process can get pretty complicated. The FAFSA is no different, but if you know how to approach it, you can maximize your financial aid.
With these tips and the help of your college financial aid advisor, you can be on your way to school with as much economic assistance under your belt as possible!
Image Credit: FAFSA tips by twenty20.com
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