APPLYING FOR FINANCIAL AID

Applying for financial aid

The FAFSA website is www.fafsa.ed.gov and is free. There are many websites that like the official FAFSA website, but are deliberately misleading.

There are many reports that many applicants fail to apply for financial aid when they are qualified for it; one estimate was that 1.8 million students in 2006 who would have qualified for aid did not apply for it. Applying for financial aid is recommended by almost all college admissions advisers, even for middle-class and upscale families applying to private colleges. 

Each college has its own criteria for determining financial need and loans. One advisor counseled against letting the sticker price of a college dissuade a student from applying, since many of the top colleges have strong endowments allowing them to subsidize expenses, such that the colleges are less expensive than so-called "second tier" or state colleges. College advisors suggest that parents keep financial records, including tax forms, business records, for later use when applying for financial aid, and complete the FAFSA online early in January of their college-bound student's senior year. The earliest that the FAFSA form can be filled out is January first of a student's senior year; in contrast, the CSS Profile can be filled out earlier during the preceding fall. There are reports that many parents make mistakes when filling out the FAFSA information, and mistakes include failing to hit the "submit" button, visiting an incorrect FAFSA website, leaving some fields blank instead of properly entering a zero, spelling names or entering social security numbers or estimating tax data incorrectly. Since FAFSA formulas assume 20% of a student's assets can be used for college expenses as opposed to 6% of a parent's assets, advisors recommend moving funds from student to parent accounts in prior years, including moving funds to a parent-controlled 529 plan tax-advantaged account. Filing taxes early is recommended, but using estimates for FAFSA from previous years is possible provided the numbers are updated later after taxes are filed. There are no fees for applying on the FAFSA site. According to one source, the best time to begin searching for scholarships is before senior year in order to meet deadlines. Several reports confirm that it is important to file aid forms such as the CSS Profile early in the school year. 

In addition to cost factors, increasingly colleges are being compared on the basis of the average student debt of their graduates, and US News has developed rankings based on average student indebtedness. 

US News and others suggest another factor overlooked in terms of financing college, which is the length of time it takes to earn a degree. Finishing a year early (in three years) lops off a substantial portion of the overall bill, while taking five years compounds the expense and delays entry into the workforce. Jacques Steinberg suggested that many college-bound students calculate how much debt they were likely to incur each year, and he suggested that debt for all four years of college should total less than the graduate's expected first year's salary after college, and preferably under $40,000. A handful of schools have "free tuition" policies for low income students, so that they graduate loan-free.