FAFSA Form & Financial Aid Form Blog

Source: FAFSA blog

A quick FAFSA update…for the first time ever, the only way to file a FAFSA, is online. I remember when I was a first time FAFSA applicant, back in 1998…my mom and I slaved over the FAFSA forms. We were so relieved when we finally sent them off. I waited for about 2 months for my SAR (Student Aid Report), and when it finally came, it was not that at all. It was one piece of paper that informed me that I had filled out one field incorrectly on the FAFSA form, and therefore I had not been processed at all for Federal Aid, until I fixed it. By the time I did fix it, the Pell Grant was no longer available to me for that school year. I am very surprised that it has taken until 2007 to switch the FAFSA to an online application only, but I can’t complain. Hopefully this will eliminate any prospective student from missing out on financial aid that otherwise would have been available to them. To end this blog, here are some common FAQs I hear about the FAFSA:

Q: My parents refuse to give me their information to fill out the FAFSA, what do I do?
a: If you are 100% certain that you cannot convince your folks that the information provided for the FAFSA form is used solely for educational aid purposes, then your next step would be to head into your FAO. They can hopefully put together an aid package for you through the school, so that you can still attend classes.

Q: I have been denied for the FAFSA because I make too much money, what do I do?
a: What this person really means is that they filled out the FAFSA and the government determined that they do not show enough “need” for them to get free money…otherwise known as grants from the government. This does not mean, that this student cannot borrow the Stafford Loan. If you are not eligible for grants, inquire about the Stafford Loan.

Happy Holidays!

Source: FAFSA blog

As we approach the end of calendar year 2007, it’s a good idea to turn our eyes to the future and start thinking about our 2008 financial aid efforts. Here are 5 strategies to help you make the most of the waning days of 2007 with payoffs in the year to come.

1. See an expert. Most community banks and credit unions offer access to a certified financial planner for little or no charge, making them a great, hidden resource for figuring out your finances. Take the opportunity and an hour or two on a weeknight or weekend to see one and review your personal finances. Get a sense for where you are and how your finances are currently set up.

2. Start writing scholarship essays. Scholarship season really starts in earnest in January of each year, and the sooner you can get your applications in to a scholarship foundation, the sooner you can move onto the next application. Do your research for which scholarships would be appropriate to apply to, and download their applications. The most time consuming part of the scholarship search is the essay, so start writing now!

3. Do your budget. January is often thought of as the time to embark on resolutions, but now is the time to plan for those resolutions so you can hit the ground running after the champagne’s gone.

4. Set goals. Set measurable, achievable goals for yourself in 2008, like a scholarship application a weekend. Be sure to have a calendar set up so you don’t miss any deadlines.

5. Get ready to file your FAFSA. The FAFSA process kicks off on January 1, but having your IRS 1040 mostly done will speed up the process, as will doing the FAFSA worksheets. Run through our FAFSA tutorials here on FAFSAonline.com and make notes of where you have questions - then contact your financial aid officer or attend a College Goal Sunday event to get those questions answered!

If there’s one number that drives more financial aid information, it’s the adjusted gross income on your IRS 1040 form. This number is the effective income you make per year, and since the FAFSA is the government’s way of determining financial need, your adjusted gross income greatly affects how much financial aid you are eligible for.

What are the components of adjusted gross income? AGI is computed by adding your total income to offsets.

Wages, salaries, tips, etc.
Interest and dividends earned on investments.
Taxable refunds, credits, or offsets of state and local income taxes
Alimony received
Business income or (loss)
IRA distributions
Pensions and annuities
Rental real estate, royalties, partnerships, S corporations, trusts, etc.
Unemployment compensation
Social security benefits

That’s your total income. Here’s a list of the offsets:

Retirement plans and savings
One-half of self-employment tax
Self-employed health insurance deduction
Penalty on early withdrawal of savings
Alimony paid
Moving expenses
Student loan interest deduction
Tuition and fees deduction
Educator expenses
Certain business expenses of reservists, performing artists, and fee-basis government officials
Health savings account deduction
Domestic production activities deduction

Offsets are where you can reduce your adjusted gross income the most, and therefore impact your financial aid eligibility. Right off the bat, if you can max out your contributions to eligible retirement plans like 401ks, IRAs, and other retirement vehicles, you’ll lower your AGI and improve your eligibility for aid - not to mention help save for the future.

We’ll add more tips for reducing your AGI in future blog posts, but start by saving for retirement!

At recent financial aid conferences, much has been made of the fact that:

• high school students may choose not to go to college partly because of complex financial aid paperwork such as the FAFSA
• college students may opt to pay for college with private student loans instead of federal student loans due to the FAFSA

Questions for you, readers:

• Has the FAFSA stopped you or anyone you know from applying to college?
• Has the FAFSA stopped you or anyone you know from even trying to get federal financial aid?

Leave a comment here with your answers. I’d love to know more about your personal financial aid experiences.