Seniors, it's time again to consider the annual rite-of-passage called the FAFSA. Most people find filling out the Free Application for Federal Student Aid about as much fun as filling out another federal form known as the 1040. It's also confusing for many, but unless you are independently wealthy, it's something you will need to do not only this year, but every year you attend college.
Why fill out the FAFSA? The FAFSA is the starting point for all kinds of federal financial aid, including the Pell and other grants, work/study, and loans that generally offer lower interest rates than you could attain elsewhere. It is also required to receive many merit scholarships.
Why do it now? Some grants have a limited pool of money and are offered on a "first come/first served" basis. The earlier you file, the better your chances are of receiving all funds that you might be eligible to receive. I generally advise students to file the FAFSA before Valentine's Day each year. It's OK to estimate earnings if you don't have all your W-4 documentation now; you can amend the FAFSA later based on your exact earnings.
Why bother? I'm sure my family makes too much money to qualify. Besides, I expect scholarships to cover the cost of my college education. Sadly, the majority of students and parents overestimate the amount of money they'll obtain from scholarships and underestimate the amount they can obtain from financial aid. (For some interesting statistics, read Mark Kantrowitz's article here) Like the lottery, "you can't win if you don't play", and applying is the only way you will know for sure. Even if you aren't eligible for grants, you may be eligible for subsidized or low-interest loans. And, as mentioned above, many if not most merit-based scholarships require that students complete the FAFSA before the money is disbursed.
How do I get started? Go to www.fafsa.ed.gov Be careful when using search engines to find the FAFSA site; there are many for-profit sites with FAFSA in their names that charge a fee. Remember, the first "F" in FAFSA stands for "free"; you do not have to pay to file the FAFSA and if a site is asking for money, you're not on the right site. The first step will be to obtain a FAFSA PIN number, which will allow you to electronically sign your form, and access it online later. Then follow the step-by-step directions as you complete the form online. There are pop-up helps and hints as you answer each question, and the site also has a very good topical help section.
What's next? Once submitted, you'll receive a confirmation email. You can also use your PIN to check the status of your FAFSA as it is being processed. After processing is complete, you'll receive an email with a link to access your online Student Aid Report, which details your financial aid package at each school you listed on your FAFSA- how much you are eligible to receive in grants, work/study, and loans. Brace yourself, because the largest chunk of aid will most likely come in the form of loans. Many times the information on the SAR is helpful as you make your final college decision, because College A might offer a better financial aid package (meaning more in grants and scholarships, less in loans) than College B. Once you commit to a particular college, you will have the option to accept or decline each component of the financial aid package. For example, you can accept the grants, scholarships, and work/study aid and decline all or part of the loan aid.
That's a brief overview. For more information, browse the help section of the FAFSA site or the FAFSA section of Finaid.org. Now, get to work on it! Don't procrastinate; the money you save may be your own.
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