FAFSA Form & Financial Aid Form Blog

Every year, families look for additional ways to pay for college without impacting the EFC, or the Expected Family Contribution. One way is gifting - giving money to a student or parent to pay for education, but that shows up as an asset in the FAFSA, which is not a good thing.

However, there’s a loophole: if a grandparent or other non-parent relative makes a payment directly to the school, the money is never visible as far as the financial aid process goes, and that’s the best way to go - funnel money through the grandparents or uncles or whoever is not an immediate family member, and avoid the gifting tax and gift limits.

As you get ready to file your FAFSA this January, you or your family may be thinking about pulling out equity in your home to pay for college. This is a bad idea for several reasons:

* Mortgage and equity rates are highly variable and unlike student loans have no interest rate caps.
* Equity in your home is best reserved for critical emergencies or retirement.
* Equity used for financing education is not deductible on your taxes as part of education expenses.

Bottom line: file your FAFSA, nail down as many scholarships as you can, and make use of federal and private student loans to fund education. Tap home equity as a very last resort.

Students can work for up to $2,440 in after tax income without being penalized on the FAFSA.

Wages after that limit are penalized at a 50% rate!

So… keep it under $2,440.

An article in USA Today pointed out that up to 40% of college students may be eligible for some form of financial aid but never receive it. Why?

They don’t apply.

Doh!

The FAFSA is a free form - granted, it can be a time-killer, but it is free to file, so there’s really no reason not to file one.

Maybe we’ll do a FAFSA together on the Financial Aid Podcast.

What do you think?

Loans they should be applying for include Parent PLUS loans and private student loans.

Have you graduated? Take a look at options for student loan consolidation!

The 91-day T-bill just crossed 4%.

Yup.

4.004%

as of Monday’s sale. That’s STAGGERING. If rates were computed for student loans today, they would be:

+ Stafford in grace: 5.704%
+ Stafford in repayment: 6.304%
+ PLUS: 7.104%

That’s a HUGE increase over last year.

What does this mean for you? File your FAFSA as soon as the doors open on January 2, because every day you wait, the less non-loan money is available!

If you’re looking for school codes - the six digit numbers that you input at the end of the FAFSA - look no further than our school info directory on FAFSAonline.com. We provide you with school codes for every Title IV school that we could find.

FAFSA school codes!

Incidentally, there are codes for schools that are now closed. The reason for that? That’s what is in the Department of Education-supplied database.

So in my revamp of the FAFSAonline.com yesterday, I came to this conclusion:

You absolutely, positively MUST do your IRS 1040 prior to doing your FAFSA; no other form will organize your finances as well as the 1040.

Hey folks, it’s yet another Student Loan Network blog. This time, it’s the FAFSA blog. Unlike our more popular newsletters and blogs, this one will be updated just as events warrant; I will be keeping you up to date with the latest happenings as the January 2, 2006 FAFSA deadline approaches.

If you haven’t already, stop by our new FAFSA walkthrough at FAFSAonline.com and give it a read-through. Our goal is to be the definitive FAFSA resource online without boring you to tears and hysteria, which, incidentally, was where I was when I was writing that thing. But it’s done and it’s far more readable than the official instructions that come with the FAFSA (which you should still read anyway).

So, welcome aboard. Oh, and there are 54 days left until the filing gates open!