Know A Scholar Looking For College Dollars?

Do you know anyone who is about to approach overwhelming school loans in pursuit of a four-year degree? Never mind that it usually takes five years to earn that degree, it's time to submit a free application for federal student aid (FAFSA).

Though you have until June, it's wise to apply as early as possible in the year you intend to go to school due to the first-come, first-served principle. Many schools grant aid to those who ask first on the belief that they're the students who are most eager to attend. With state budgets stretched beyond see-through proportions, state aid is limited and shrinking. Add spiking tuition costs to the equation and there's some serious competition for available cash.

It doesn't cost anything to apply for aid but could mean quite a difference to your bottom line when those tuition bills hit. And every penny counts, considering that average debt among 2010 graduates is $25,250 – up five percent from the previous year, according to the Institute for College Access and Success.

Take Action Tip for Today

It's easier than ever to file the FAFSA online, but you'll need to secure your PIN first. Plus, you may need to track down income records and other information, but don't let that stop you.

Here are some other hints about federal financial aid:

• The federal formula for determining aid excludes home equity, retirement accounts, cash value life insurance and annuities. However, colleges typically do consider home equity when distributing their financial aid.
• While family income is the main factor that determines aid eligibility, the size of your family, the age of the older parent and number of kids you'll have in college at the same time all play into the equation.
• It's common for parents to overestimate their student's potential for scholarship dollars based grades and talents. To be candid, don't rely on a full ride as your main funding source. Likewise, don't worry that you won't get financial aid if your kid isn't on the rocket-scientist trajectory.
• A more expensive school does not translate into more aid. Your expected family contribution (EFC) is determined based on income and asset information, and your EFC status is the same, no matter what school your child aspires to attend.
• If your financial circumstances change after you file the FAFSA (job loss, etc.), you can ask the financial aid officer at your student's school to revisit your aid package.

More Resources

If you are a procrastinator looking for ways to avoid the FAFSA:

• Visit our College Matters page for links to college prep resources and other tools.
• If you have young kids and time to save, take a spin on our college savings calculator.
• Our student budget calculator is a planning tool and reality check in equal measure.
• We have a free College Matters workshop for parents of high school students that can help you navigate the application and financial aid process. Find a workshop in your area.

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