Last Updated: February 22, 2010
On Jan. 1, students became eligible to file their Free Application for Federal Student Aid (FAFSA) online for the 2010-11 school year. Even if you feel you've planned well for your child's education or hope you'll have enough when he or she enrolls, it's a good idea to learn about financial aid well in advance.
Why? Because more than 60 percent of all college students now apply for some form of financial aid, and those numbers will go higher as college costs rise. A financial expert can give you personalized counseling on college planning and where financial aid might fit in.
In 2010, key deadlines for the 2009-10 school year are as follows:
- FAFSA on the Web applications must be submitted by midnight Central Daylight Time, June 30, 2010.
- Corrections on the Web forms must be submitted by midnight Central Daylight Time, September 21, 2010.
Key deadlines for the 2010-11 school year are as follows:
- FAFSA on the Web applications must be submitted by midnight Central Daylight Time, June 30, 2011.
- Corrections on the Web forms must be submitted by midnight Central Daylight Time, September 15, 2011.
It's also time to check your own chosen state and schools' financial aid deadlines, which typically arrive sooner than the FAFSA deadline and have a separate application process. Learn more about state financial aid deadlines. Some states start as early as this month, and they'll want a completed FAFSA with any additional materials they require.
Keep in mind that many private schools also require something called the CSS/Financial Aid PROFILE® to determine financial aid eligibility at that level. Learn more about the CSS/Financial Aid PROFILE®.
It makes sense to learn about the FAFSA now, even if your child isn't going to college for at least a year. The FAFSA assesses the student and parents' income, investments, and other financial resources, and arrives at a number called the Expected Family Contribution (EFC). This is the amount the family is expected to pay before becoming eligible for need-based aid. The online version allows you to test those numbers in advance.
Some financial planners have specific training in college planning that can help you at any stage of the savings game. Find a financial planner that specializes in college planning.
It's important to know that the U.S. Department of Education is phasing out the paper version of the FAFSA. Learn more about applying online. If you or your child don't have access to a computer at home, you'll want to find one at a public library or other location with adequate security so you can feel comfortable about sending your financial data online. If you're a student or a parent, here are the main tools you'll need to complete the form:
- The student's Social Security number
- Driver's license number
- The student's recent tax information
- The student's untaxed income records
- The parents' most recent federal and state tax returns (for students registering as dependents)
- Bank account and investment information
- Documentation forms for resident aliens
Applicants also need to indicate their school choices so the government can forward financial data to those schools. It is important for both the student and parent to apply for PIN numbers even before starting the FAFSA application. PINs allow you to "digitally sign" the form, significantly speeding up the process. But they take several weeks to arrive by mail, so apply early.
The majority of financial aid comes in the form of loans, so you or your child will have to pay them back. But the loans are often subsidized, meaning you don't have to pay interest or principal on the loan until after the student graduates or quits school. That's a big help to cash flow. Furthermore, the student may receive work-study for 15 or 20 hours a week. Many colleges, particularly private schools, kick in grants or merit scholarships from endowment funds. You'll have to become a student for these options, but a trained financial expert can help you with short cuts.
Students who have already applied for financial aid with a FAFSA don't have to redo the form from scratch each year. The Renewal FAFSA retains much of the data in the original form (demographics, mainly) and allows updates for financial data like adjusted gross income, taxes paid and asset information. Students must file the renewal FAFSA each year if they want to be considered for aid.
One more thing. Did you know that in case of a borrower's death or disability, federal student loans are forgivable by the federal government? That means that in the case of the student's death, parents, spouses or other family members won't be saddled with that debt.