The bad news is that college costs are rising each year, and it can cost up to $40,000 annually to attend certain schools. The good news is that more than 60% of today’s college students are receiving financial aid, making their dreams of going to college come true.
Each year, the federal government requires those who want federally funded financial aid to complete the Free Application for Federal Student Aid form, or FAFSA. The purpose of the FAFSA is to collect information on a family's annual income and assets. The student decides which college or colleges should be notified of the results of the analysis. Upon receipt of the information from the processor, the college will make a financial aid offer to the student.
Filling out the FAFSA is the first step in the college financial aid process. Federal student financial aid, such as the Pell Grant, student loans, and college work-study funds are all based upon the Student Aid Report that you will receive after you have completed the FAFSA (online or on paper). In addition, most states and schools use FAFSA information to award their financial aid.
How is Financial Need Determined?
The definition of “financial need” is the difference between the cost of attending a particular college and the amount of financial support your family can provide to cover these costs. This varies for each family and is determined by analyzing income and assets.
The dollar amounts for the items that make up the cost of attending are determined by the college. Some of these costs (tuition, fees, room and board) are paid directly to the school. Other costs (transportation, books and miscellaneous) are real costs that you will experience when attending college but are not paid directly to the school.
Understanding Family Contribution
The “family contribution” depends on who is supplying the money to fund the financial aid. If the money comes from the federal government, the expected contribution is calculated using a standard formula developed by the United States Congress. If the money comes from some other source (such as the respective college), the funding agency or institution can either use the calculations made by the federal government or develop its own formula for calculating family contribution.
As a result, the family contribution required by different institutions can vary for the same family. For example, one institution may determine that a family should contribute $10,000 while another institution may decide that the family should contribute only $8,000. In both cases, however, the amount of family contribution required to participate in federally funded financial aid programs would be identical.
Tips for Submitting Your FAFSA
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Get your parents involved; you will need them to help you gather all the family income documentation such as tax filings and returns.
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File as early as possible. Once your Student Aid Report and Expected Family Contribution is returned, you may need time to apply for student loans, grants and work study.
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File online; it is the fastest and most accurate way to work through the financial aid process.
Financial Aid Deadlines
The FAFSA deadlines for states or schools may differ from the federal government’s deadlines, so be sure to pay close attention to deadlines.
Families are encouraged to complete and submit the FAFSA form in January or February of your senior year. Most institutions will begin awarding aid in late February and will continue through spring. Remember that a student must be admitted before an institution will award financial aid.
For the 2008 – 2009 school year (July 1, 2008 – June 30, 2009), online FAFSA applications must be submitted by midnight Central Daylight time on June 30, 2009. Corrections on the Web forms must be submitted by midnight Central Daylight time on September 15, 2009. Note that your school must have your complete, correct information by your last day of enrollment in the 2008-2009 school year.
Ask your prospective college about their definition of an application deadline -- whether it is the receipt date and time or the process date and time of the application. Federal Student Aid considers a FAFSA’s receipt date and time to be when the FAFSA/correction is submitted successfully, so be sure to print your confirmation page with the confirmation number including the exact date and time (Central Standard Time) the form was received.
Transactions must be completed and accepted by midnight to meet the deadline. If you wait too long to submit your application and it is rejected, you may miss your school’s deadline.