FAFSA Form & Financial Aid Form Blog

As of July 1, 2008, interest rates will be changing on federal student loans such as the Stafford loan. Here’s a quick rundown of the details:

For new Stafford loans:

• Subsidized: 6.0%
• Unsubsidized: 6.8%

For Stafford loans older than July 1, 2006:

• In grace period: 3.61%
• In repayment: 4.21%

For PLUS loans older than July 1, 2006:

• All older PLUS loans: 5.01%

If you’re just filing your FAFSA now, be aware that loan limits have increased as well; you’ll receive additional details from your school’s financial aid office in your award letter and financial aid package.

For those who don’t know, if you have past drug convictions, for selling or possession while you were receiving Federal aid, then this can affect your aid eligibility. Your eligibility for Federal aid is revoked for a period of time (directly correlated to the type and number of convictions).

I did some research on this, and it appears that as long as you have completed an “acceptable drug rehab program”, you can still receive federal aid. There are no time constraints on this, either. You could be convicted of selling/possessing drugs, enter a rehab program, complete it, and still get federal financial aid right away

An acceptable drug rehabilitation program must include two random drug tests.

The program must also:

• Be qualified to receive funds from federal, state, or local governments

OR

• Be qualified to receive funds from a federal or state licensed insurance company

OR

• Be administered or recognized by a federal, state, or local government agency or court

OR

• Be administered or recognized by a federal or state licensed hospital, health clinic, or medical doctor

I also found that if this drug conviction (for selling or possessing) was 2 or more years ago, then a drug rehab program is NOT required, and you should still be able to get federal aid. If you have more than 1 drug conviction in the past 2 years, then your eligibility is suspended for longer.

If you have more than 1 drug conviction in the past 2 years, you have to wait longer in order to be eligible for Federal aid. (it appears that each drug conviction you have = 1 year of lost eligibility). If you have 3 or more drug convictions in the past, then you are ineligible for Federal aid indefinitely.

Because it is nearing the end of the summer, students are scrambling to find ways to pay for school. I received a phone call a few minutes ago from a girl who needed a loan asap! Here is a re-creation of our conversation:

Caller: “Hello, my tuition is due August 15th, and I am short $2,000. If I can’t come up with the money, my school will drop my classes. Can you help me?”

Me: “Sure, have you already filed a FAFSA for this school year”

Caller: “What is a FAFSA?”

Me: “FAFSA is the federal form that all students should fill out. It is free to do, and it determines your eligibility for federal grants, and all federal student loans. You cannot take out a federal loan unless you have a FAFSA on file, which is why it is really important to fill out this form.”

Caller: “Ok, so I fill this form out, and then I will be able to take out a Stafford Loan.”

Me: “Well not exactly. Once the FAFSA is filled out, your college receives a Student Aid Report from the government. On that SAR report, it will say whether you are eligible for the Stafford Loan (which is based on your financial need). If you are eligible to receive the Stafford Loan, then you would just fill out a Stafford Loan Promissory Note in order to receive the funds. This whole process can take over a month to complete, from start to finish. ”

Caller: “Oh I see, so it is probably too late at this point in time to do the FAFSA and get the Stafford Loan?” Me: “Most likely, yes. Check with your school to see if they will still accept a FAFSA for Fall semester. If they say no, then you can apply for an Act Education Loan; which does not require you to have a FAFSA filed. You can get those funds in 3-5 days.”

This is a conversation I have almost daily. Remember to file your FAFSA, and then renew it every school year. That way you won’t be left in a jam.

For more information, visit:
Stafford Loans
Scholarships
FAFSA help

As the tax season approaches and the deadline for the FAFSA nears, March 1, 2007 to be exact, I thought it would be a good time to go over some common mistakes to avoid when filling it out. The first mistake I see people make is not having their tax information up to date. If you are unable to get your taxes in on time you still want to fill out the FAFSA. The longer you wait to fill out your FAFSA the less chance you have on receiving money. What you want to do is fill out the FAFSA to the best of your ability using the year before tax information. You can always update your FAFSA when you get the new taxes back. This is perfectly legal and recommended by the DOE. If you are still not sure what to do always check with your schools financial aid office or check out FAFSA Online.

Mistake #2!! Always check your work. Make sure you have filled everything out with the right information in the right order. It sounds like common sense but time and time again people put their name out of order, parents fill out the student’s part of the FAFSA with their information, and they leave questions blank. Just because a certain area doesn’t apply to you doesn’t mean to leave it blank. By doing this you are hurting your chances on getting money awarded to you. What you want to do is put the number O in instead. You may think there the same thing but the DOE doesn’t. In doing their calculations every number matters.

Finally, not that any of you upstanding citizens out there would do this, but, DON”T LIE on your FAFSA. That is the one sure way not to receive any money and its illegal. Also, with the new rule changes it’s no longer necessary to hide inheritances or college funds. They are no longer factored into your total EFC (Expected Family Contribution). Now that you know what not to do it should make your experience a little less painful.

Some Helpful Links

Ms. Stafford and Financial Aid Podcaster’s BLOG
ActEducationLoans.com

Before I touch on the title subject…remember this…FAFSA is free! There is no harm in filling it out, even if you think you do not qualify for Federal Aid…you will never know unless you fill it out. Federal Aid eligibility is based on certain criteria that varies per individual and school. So fill it out. Ok, back on track…if you fill out your FAFSA and your school tells you that you are not eligible for Financial aid (which happens quite often)…do not stop there. The Stafford Loan IS financial aid…even though it is a loan that you have to pay back, it is considered a form of financial aid. What does this mean for you, the student? 1) You cannot get a Stafford Loan without filling out the FAFSA first. 2) Filling out the FAFSA does not automatically mean you applied for the Stafford loan. You still need to fill out the Stafford Loan Master Promissory Note. 3) You must collaborate with your school’s Financial Aid Office in order to receive this loan….why? Because it is financial aid!! Although the Stafford Loan may be a bit of a hassle to receive…it is still the best borrowing option for an undergraduate student because it has the lowest interest rate, the best repayment options, and the best borrower benefits…that may not seem important now, but you will be thankful for when you are a graduate paying back your loans.