Paving the way to a positive future:

Getting the FAFSA to work for you, by Anita Martin

Many college-bound students do not fill out a key financial aid form or complete it incorrectly. This can jeopardize their receiving funding and for some may make the difference in whether they attend college at all. The purpose of this article is to help you make sense of the often confusing FAFSA (Free Application for Federal Student Aid) form.
On average, a person with a college degree earns almost twice as much per year as one with a high school diploma. This difference in income can add up to more than a million dollars during the course of a lifetime. But in this time of skyrocketing costs, how can you — or your son/daughter/grandkid/niece/nephew — afford an education after high school? For many, if not most, the key is to tap into available college financing. The first step is filling out the FAFSA form.   
Federal Student Aid, an office of the U.S. Department of Education, provides federal student aid, which includes grants, low-interest loans, and work-study programs for education beyond high school (four-year college or university, community college, or trade school). It costs nothing to apply for Federal Student Aid via the FAFSA form.
Although the form is complicated and long (more than 100 questions) and takes time to fill out, the potential ROI (return on investment) makes it well worth filling out. Completing it correctly could be the factor determining whether or not you or your loved even goes to college or trade school. Correctly filling out the FAFSA form in some cases saves thousands in out-of-pocket college expenses. It can mean getting the best funding package that the college has available, experts say. For some students, it means being able to attend their top-choice school.

You must complete the form online
This year's FAFSA form, which just became available Jan. 1 and has few changes from last year's form, must be completed online. That's one of its limitations, because many people don't feel comfortable putting private information into a public or shared computer.
"It's the highest grade security an Internet site can get," assures Steven Lamb, stressing that the problems of not submitting the FAFSA far outweigh the potential risks. Lamb is a CCPS (Certified College Planning Specialist) with American College Planners, a local 501(c) (3) nonprofit organization committed to helping families prepare for college. Along with CCPS Robert DeCock, Lamb presents free workshops for students and parents in Madison and surrounding communities.
A common misperception is that the FAFSA form is only for those with certain income levels. "The FAFSA is the gateway to get needs-based and merit-based financial aid,"
Lamb explains. "It's not exclusively a needs-based form," although some of the Web sites don't make this clear. "Not filling out the FAFSA guarantees that you will not get any need-based aid and some types of merit-based aid," he adds.

Time is of the essence
Lamb tells folks to fill out the FAFSA form early.
"And plan for it," says DeCock. "I think that's the one thing that people really overlook." People are often told to fill out the FAFSA, he says, but they do it without preparation. He emphasized that planning is what makes the form useful.
Many aspects of the FAFSA are not straightforward, so it's essential to set aside sufficient time to read over the instructions. Filling out the FAFSA is generally not a quick 45-minute process or something to try to do during the Superbowl half-time — as one family DeCock worked with did — and made mistakes.
The fundamental issue and therefore problem with the FAFSA is that people approach it  like a tax-preparation form, DeCock says. Definitions and rules differ between tax forms and FAFSA forms, as to what are considered assets, investments, and household income. DeCock gave an example of family situation: "If I'm divorced, my son is going to college, and he lives with his mom 95 percent of the time but I claim him as a dependent on my taxes, the student includes only the income and assets from the mom and not from the dad on the FAFSA form." (See sidebar.)

A few more things to keep in mind when filling out the FAFSA
"For income, the base year is the year before," says DeCock. "For assets, it's the moment you submit the FAFSA form, what the assets are worth the day you file the FAFSA." He says it's easy to confuse the parent and student information, so watch carefully where you record what. The student sections, which come before the parent sections, refer to spouse because some students applying for financial aid are married.  
  
When to fill out the FAFSA?
The sooner the better, say Lamb and DeCock. High school seniors and those already in college or trade school should aim to complete the FAFSA by Jan. 31, if possible. If you haven't completed your 2008 taxes yet, they suggest using estimates based on 2007 tax returns to complete the FAFSA and sending an amendment later.
"Submitting early can mean getting Pell grants before they are all given out," Lamb says. "It can mean getting subsidized or Perkins loans, [in which the government covers the interest when you are in school], as opposed to unsubsidized." 
Most people submit their FAFSAs in March or April, after they submit their taxes; but by then, many of the funds have already been allocated to other students. "The bottom line is: The longer you wait, the less funds will be available," DeCock says. "Even something like work-study is on a first-come, first-served basis."
The FAFSA generates the SAR (Student Aid Report). "Three to four weeks after you file a FAFSA, it [the SAR] comes back to you in the mail, and that will have what they calculate to be your estimated family contribution," says Lamb.
Even high school freshmen can fill out an estimated form based on where they're planning to attend school, so they know what their savings goal needs to be. For example, Lamb says, if you're looking at Yale, you'll have a better idea whether it will cost your family $50,000 a year for you to attend - or $10,000. (See http://www.fafsa4caster.ed.gov.)

Limitations of the FAFSA
It's important to know that an appeal process is part of the FAFSA.
"The FAFSA doesn't ask what your mortgage is, are you about to be foreclosed on, what is your car payment, what are your debts," says Lamb. "[Let's say] you were employed in 2008 and you just lost your job … These are all things the FAFSA doesn't ask, but the financial aid office [at the school] ought to know about."
Although your financial award letter from your college is usually based on your first-year FAFSA, it's important to fill out a FAFSA form every year you plan to attend school. Families' financial situations aren't static. You lose money in accounts, get jobs, lose jobs; another kid in the family goes to school, etc. - which is why it's important to "update your information and get the school to understand drastic changes to your family situation; and your financial aid letter can be amended," Lamb says. Don't assume that schools look at the second- or third-year FAFSA forms you send and automatically update their records, Lamb cautions; sometimes they don't. Call the financial aid office and follow up by talking with a live person and explaining the changes to your situation, he and DeCock advise.  

More information on the FAFSA
The official Web site is www.FAFSA.ed.gov. Type carefully; some look-alike sites charge a fee. Other resources include www.FederalStudentAid.ed.gov, 1-800-4-FED-AID (free 40-page comprehensive booklet, "Funding Education Beyond High School: The Guide to Federal Student Aid, and www.studentaid.ed.gov/collprep (step-by-step college preparation list: what to do before high school and during each year of high school.)
Questions about the FAFSA? Call Robert DeCock (828-4333) or Steve Lamb (828-4323).
Want to learn more about applying for schools and eligibility for student aid? Attend a free workshop Tuesday, Jan. 27, 6:30-8 p.m. at Alicia Ashman Branch Library, 733 N. High Point Road, or Tuesday. Feb. 3, 6:30-8 p.m. at Pinney Branch Library, 204 Cottage Grove Rd. Reserve your seat at www.americancollegeplanners.org, or call 828-4323. 

Note: Efforts are under way nationally to make the FAFSA form shorter (down to 26 questions), easier to use, and consistent with tax-preparation forms and definitions. U.S. Secretary of Education Margaret Spellings says the FAFSA needs to be redesigned to help "knock down barriers to education, not put up hurdles."