College Savings – What Is FAFSA And FAFSA Tips
If you have a child going to college in the fall, or even in the next few years, you are concerned about funding. We want the best for our children and there is a college funding mountain ahead that no one is prepared to climb right away. So let’s make one of those hurtles a little bit easier by discussing the FAFSA. You may remember this acronym from when you, a family member or friend went to college, but that doesn’t mean that you were aware of what it was. In most cases, parents are the people who fill these out for their children, so this may be your first encounter with one. Don’t be scared – the FAFSA is there to make your life easier. So, let’s get started on that college savings.
What is a FAFSA?
The acronym FAFSA stands for Free Application for Federal Student Aid. It is the application that one submits to determine whether you are eligible for federal funding. This application gets filled out each year and is applicable during both undergrad as well as graduate school.
The FAFSA Is the Queen of Financial Aid
If you do not fill out the FAFSA, you aren’t eligible for financial aid. This goes for both federal and state financial aid for college. Almost all colleges participate in the FAFSA, so no matter where your college student has applied, they you or they will need to fill this out.
The FAFSA Is Free and Can Save You Money
The crazy and most helpful thing about the FAFSA is that it costs you nothing to fill out. You may be thinking that you make too much money or not enough, but until you fill it out, you will never know. Whether you are in desperate need of federal funding or on the fence about if you even need loans, it is worth your time to submit the application. Even if you have all of the money to pay for college sitting in the bank, knowing what money you could borrow from the government can be a game changer. Any subsidized loan that you are offered (a loan that you don’t start paying back or accruing interest on until after graduation) is money that you can keep in the bank. Invest that money, buy a short-term bond or do something with it so that you aren’t only saving money with your loan, you’re making a little extra as well.
The FAFSA Can Be Submitted Online
To make your life as easy as possible, the FAFSA can now be filled out online. Make a cup of coffee or grab a Diet Coke and sit down with your future college student to fill out the form. Some items are things that you will have to do yourself, but there are several areas where you will want and need input from the applicant.
FAFSA Is Income Based
Remember that when you fill out the FAFSA, it is based on your household income and assets. Be as honest as possible about what you make and what you own or the government will find out. You don’t want to find yourself in that boat!
The FAFSA Counts Only the Parent’s Income
In a strange financial turn of fate, the child’s college financial aid is based off of only the parent’s income. This means that your child cannot count their own income unless they are 24, married, active in the United States military or qualify as an independent student under other circumstances. There is a list and worksheet that will help you determine if the prospective college student is a dependent or independent applicant. If you do not fall under the independent qualifications (which is much harder to do), you are considered a dependent and only the parent’s income will apply.
The FAFSA Has Deadlines
If you want to get the maximum amount of money for your child’s college education, you have to meet the deadlines. Keep in mind that the state and federal government have completely different deadlines for the FAFSA, so you will want to check the due dates for each year and then mark them boldly on your calendar. Do not miss this deadline or your child’s college entrance could be in jeopardy.
Pay Attention to School Selection Order Listed
When you submit your FAFSA application, you are currently allowed to apply to 10 schools when done online or 4 schools when done by paper. A few years ago, the order in which you listed the schools could have been an issue on a federal level. Since schools could see your entire list, school choice 8, 9 or 10 may have been less likely to offer you money than school choice 1 or 2. Now, in most cases, schools on a federal level cannot see the order in which they are listed, so you can list them in any order. (There are rare situations where that isn’t the case, so check your state for more information.) That said, on the state level, schools can still see the order in which you’ve listed everything, so it may be a good rule of thumb to (at least generally) list your schools from the one you love the most down to the one that you care about the least.
The FAFSA Is Just the Beginning
Whether you are or are not offered money through the FAFSA process, it is only the beginning to the college savings options. There are tons of scholarships, grants and private loans available should you need them. Once your FAFSA is finished, make Google your new best friend. Do searches for savings in your state, through your employer, the military (if any of you have served), private scholarships through large corporations, music or athletic scholarships, as well as anything else that pops into your mind. There are billions of dollars offered in scholarship money each year, so there is no reason that your child can’t try to collect some for their education.
When your child is a senior in high-school, the FAFSA will fall at your feet. Give yourself a little bit of time to fill it out, but make sure that you do. It is free, won’t hurt you, and the benefits could be significant. There are lots of college savings hurtles to try to overcome, but hopefully these tips will make it an easier process for you. In the meantime, you may want to learn more about how to save money for college so that you can get going with your college savings now!