Tag: paying for college

The key to filling out the FAFSA is to be prepared. How do you prepare for a long, detailed form like the FAFSA? You gather all the personal identification information and financial documents the FAFSA will ask you for and you apply for a FAFSA P.I.N. so you can fill out your official FAFSA online (FAFSA-on-the-Web).

Here’s a step-by-step explanation of how to do the FAFSA. (For a few important FAFSA Facts first, see EducationGrant’s FAFSA page).

Before We Start: Understanding FAFSA Application Periods

Each FAFSA application period runs from January 1st of any given year to June 30th of the following year. This 18-month period provides financial aid coverage for the traditional September–to–May school year and a short summer school session at either end.

For example, as of January 2010:

  • If the education program you want to enroll in starts between now and June 30th, 2010, fill out the 2009-2010 FAFSA.
  • If the education program you want to enroll in starts between July 1st, 2010 and June 30th, 2011, fill out the 2010-2011 FAFSA.

Key to Filling Out the FAFSA: A Step-By-Step Plan

Step 1: Collect the documents you’ll need for the FAFSA and use them to do the Practice Worksheet

Required personal identification information and financial documents:

  • Your Social Security Number (SSN)—or your alien registration number if you’re not a U.S. citizen
  • SSN of your parent(s) if you meet the FAFSA criteria for a Dependent Student
  • Your driver’s license if you have one
  • Your most recent bank statements
  • Your W-2 Forms and other records of money earned
  • Your Federal Income Tax Return (and your spouse’s, if you are married): IRS Form 1040, 1040A, 1040EZ, foreign tax return, or tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia or Palau
  • Your parents’ Federal Income Tax Return, if you meet the FAFSA criteria for a dependent student
  • Records of your untaxed income such as Social Security, Temporary Assistance to Needy Families, welfare, or veterans’ benefits
  • Your most recent business and investment mortgage information, business and farm records, and records of stocks, bonds, and other investments

Step 2: Get a PIN for FAFSA-on-the-Web OR download a paper application

The Department of Education strongly recommends that you use FAFSA-on-the-Web. Filing online is shorter, easier, and faster, and you get an answer back more quickly, too. (Read more about FAFSA-on-the-Web in Step 3.)

FAFSA-On-the-Web (FAFSA Online)

  • Apply for your PIN online at www.pin.ed.gov.
  • Your PIN allows you to “sign” your Online FAFSA, and to access your FAFSA file every year that you apply.
  • Apply for your PIN ASAP because processing your request will take at least 2-5 business days.
  • Your parent(s) must have a PIN too if you meet the FAFSA definition of a Dependent Student
  • Providing an email address will speed up the PIN process.

Downloadable Paper FAFSA to Submit by Mail

  • Download a PDF copy of the FAFSA from the Student Aid Website or call the Federal Student Aid Center at 1-800-4-FED-AID.
  • Check the federal school code page to find the code for each school you plan to apply to.
  • Throughout January and February 2010, volunteers across the country are holding events where they are providing in-person help to students filling out the FAFSA. If you could use some help, see if there is a FAFSA event in your area.

Step 3: Set aside some time to do the FAFSA

Block out a couple of hours on your calendar to sit down and just get the FAFSA done. The Department of Education recommends using FAFSA-on-the-Web for several reasons:

  • Online instructions are provided for each question and live online help with a customer service representative is available if you get really stuck.
  • FAFSA-on-the-Web is designed to find mistakes and prompt you to correct them.
  • You can get the federal school code while you’re right there in the form.
  • You can fill out all the questions at once or save your application for later changes and updates. This is a great feature for submitting all the information you have other than your tax return. You have 45 days from when you first submit information, or until the application deadline passes.
  • Once you click “Submit My FAFSA Now” your information is immediately sent to the Department of Education.
  • Your application is processed more quickly.

Tips from FAFSA Experts

  • Do a dry run. Print out a FAFSA Practice Worksheet and fill in as much of the information as you can. This way you’ll have all your data in one place and can easily transfer it to your official FAFSA-on-the-Web.
  • About taxes. You can do your FAFSA-on-the-Web before filing your tax return. Estimate your tax information on your FAFSA, then submit a FAFSA follow-up with any corrections after you’ve completed your tax return. (You have 45 days.)
  • Dependency status. If the FAFSA defines you as a Dependent Student but you have no contact with either parent, make an appointment with a financial aid officer at your school. The financial aid administrator will work with you to determine if you qualify for Independency status in spite of meeting the Dependent Student criteria, and then will submit your FAFSA-on-the-Web with a Dependency Override. Another option is to submit the FAFSA-on-the-Web without parent information, which will qualify you only for an unsubsidized student loan. In this case, you will get an incomplete Student Aid Report (SAR), and if the financial aid office of the school you want to attend agrees to give you Independency status later on, they can do the dependency override then.

Ok, it’s a lot— but it isn’t that different from doing your taxes, another process that benefits from having all your ducks in a row before you begin. For the 2007–2008 academic year, the federal government provided over $14 billion in Pell Grants to more than 5.4 million undergraduate students. Start collecting all your documents as soon as you finish reading this post. The key to filling out the FAFSA is just a little preparation.

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Here’s a treat for a Monday: a chance to share good news about the challenging FAFSA. This month and next, volunteers are standing by to help you fill out a FAFSA, in person, so you can get federal financial aid for college.

Kim Clark, who is always on top of financial aid news at U.S. News & World Report, just alerted her readers about the free FAFSA assistance in her article, Applying for Financial Aid Will Be Easier in 2010. Apparently, some of the volunteers will be tax professionals who will help students with both the FAFSA and their tax returns.

Since the FAFSA is the application you have to fill out in order to get a Pell Grant (and maybe other federal grants for college), getting free help with both the FAFSA and the 1040 sounds like a well-spent afternoon.

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Thinking about going back to school, but don’t know where to start? Amanda Ly, a freshman at East Los Angeles College, wrote a gripping and informative LA Youth article about her initial experience with choosing and paying for college:

Hit with the real cost of college

Although her college plans didn’t turn exactly as she had hoped, Amanda’s financial situation will feel familiar to many students and her description of her experience in navigating student loans, and her hard-won advice, will benefit all readers—whether you’re a new high school graduate or a nontraditional student returning to school. For an introduction on college planning, take a look at this student’s thoughts about what she learned during her college selection and application process.

Top tips: What to find out from the school(s) you’re considering and how early to start planning how you’ll pay for college.

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Have you ever felt like you watched a paycheck come in one door and go out another before you could say “savings account”? Well, the beginning of the new year is an excellent time for advice on saying “hello” to more money and saying “goodbye” to burdensome debt. So, we looked around for just that kind of advice. Here’s what we found:

In the Boston Globe, personal finance guru Suze Orman listed her Top Money Tips for 2010. Check out this advice on saving money, paying cash for purchases, understanding mortgages, preparing for being laid off, and finding career paths for prosperity.

Favorite quote from this article, re: finding a job:

“You should go into a field where you really want to spend the rest of your life. If you can just do what you want to do and you can be the best at what you want to do, better than anybody else out there, you will create a job for yourself. Just because there’s a job market out there this month or next year in an area, it doesn’t mean it will be there a few years from now—look at the car industry.”

And at Bankrate.com, Steve Bucci provided 10 Ways to Dump Your Debt in 2010. Considering that the Class of 2008 carries an average of $23,200 in student loan debt (and often far more than that), any practical and effective advice on how college students and graduates can start eliminating their student loan and credit card debt is a step toward a brighter future.

Welcome to the last year of the first decade of the new millennium!

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financial aid for collegeWhat do you want to know about financial aid for college? Considering the country’s economic turmoil in 2009, EducationGrant.com certainly picked a good year to launch a college financing blog. Not surprisingly, the posts that attracted the most readers were those that focused on how to get scholarships and grants.

Here are the top 5 EducationGrant blog posts of 2009:

1. Single Mom Scholarships

2. 10 Scholarships for Women

3. Pell Grant Application Process

4. Financial Aid for Single Mothers: Grants

5. Student Loan Forgiveness

With the latest numbers on average student loan debt rising to $23,000, the demand for scholarships and grants and a better financial aid system will surely be intense in 2010. No one has all the answers to the question of paying for college, so EducationGrant.com invites readers to share their personal experience, ideas, and suggestions with each other and the entire EducationGrant community next year.

We’ll be back on Monday, January 4th. Best wishes for a safe and happy New Year holiday.

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Worried about adding all that holiday shopping to your debt? Well, you may get some financial power back in 2010, when new credit card and student loan rules start leveling the playing field between customers and lenders.

A week ago, Congress approved a proposal to create a new Consumer Financial Protection Agency. The new CFPA is designed to monitor financial transactions not covered by the Truth in Lending Act — including private student loans, which are currently unregulated. If the CFPA proposal eventually becomes law, the Agency will have the authority to establish and enforce rules for private student loans.

Also, a new credit card law goes fully into effect in two months (February 22, 2010). These new rules ban or restrict unfair fees, require more transparency about credit card costs, and help consumers make more informed decisions about which credit cards they acquire and how they use them.

The Credit Card Accountability, Responsibility, and Disclosure Act:

  • Requires “Plain Language in Plain Sight” explanations of both account and contract terms before consumers open an account and the activity on consumers’ accounts after the account is opened. (For example, customers must be told before they open a credit card account what fees they may be charged. Then, after the account is open, credit card statements must conspicuously display fees the consumer paid both in the current month and over the year-to-date, along with the reasons for those fees.)
  • Bans unfair interest rate increases
  • Bans retroactive interest rate increases for arbitrary reasons and restricts retroactive rate increases due to late payment
  • Offers first year protection: Contract terms must be clearly spelled out, and they can’t be changed at all during the whole first year
  • Bans late fee traps such as a too-short payment deadline, weekend deadlines, deadlines that change each month, and deadlines that fall in the middle of the day
  • Requires over-payments be applied to the balance with the highest interest rate first, and bans interest charges on debt paid on time ( “double-cycle” billing)
  • Requires transparency about over-the-limit fees by requiring the customer’s permission before processing any transaction that would push the account over the credit limit
  • Restricts unfair sub-prime and low-limit card fees
  • Limits fees on Gift Cards and Stored Value Cards and requires more transparency in the disclosure about fees
  • Requires consumers under the age of 21 to provide the signature of a parent, guardian, or other individual 21 years or older who will take responsibility for the debt, or proof that the applicant has an independent means of repaying the debt
  • Requires a periodic review of all interest rate increases since January 2009 and requires rate reductions when a review indicates that a reduction is warranted
  • Requires the inclusion of real information about the financial consequences of decisions, including periodic statements that clearly display how long it will take to pay off the existing balance (and the total interest cost) if the consumer pays only the minimum amount due VS. the payment amount and the total interest cost if the existing balance was paid off in 36 months.

The Credit CARD Act also mandates stricter safeguards for college students and young adults, who are particularly vulnerable to sales gimmicks and traps in the fine print.

  • Credit card issuers and universities will be required to be very clear about any agreements they have regarding the marketing or distribution of credit cards to college students and young adults.
  • Credit card issuers and regulators will be held accountable for failure to abide by the new rules, including increased penalties for repeat violators.

Financial literacy is going to be a hot topic in 2010. Visit EducationGrant.com often for updates on new student loan regulations, credit card rules, and changes to the federal financial aid process.

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These days, going to college requires finding the balance between what it will cost you and what you’ll get out of it. As college students take on more financial burden than they can manage, both public and private financial aid experts stress minimizing student loan debt as critical to staying out of a downward financial spiral after graduation.

“Surviving Student Loans and College Debt,” a video from U.S. News & World Report, offers 3 tips for minimizing your student loan debt and provides examples of TV commercials advertising expensive private loans:

The Federal Trade Commission also has tips on avoiding risky loan offers and minimizing student loan debt. Click on the title to download the 4-page “FTC Guide To Avoiding Deceptive Student Loan Offers” PDF.

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Each year, the U.S. government provides more than $100 billion in federal financial aid to help students pay for higher education. “I’m Going,” the Federal Student Aid website, shares the stories of a few of these students. In one video, Delia describes how she got help with the financial aid application, then turned around and helped her single mom to go to college, too:

“My mom learned from me! She went back to school and got her GED. Then I helped her fill out the Free Application! In two years, she became a nurse.”

As of 2007, there were 10.4 million single moms living with children under age 18 in the U.S., and it’s probably a safe bet to say that many, if not most, are heroes to their children. Being a mom is not easy; being single mom is even tougher. You’ll find stories all over the Internet about both single and married parents who inspired their children to pursue dreams and goals never accessible to the parents themselves. Delia’s story is a treat.

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Tips for Affording Student Loans

Student Loan ApplicationStudent loan debt is back in the news again. Based on data from the 2009 National Postsecondary Student Aid Study, the Project on Student Debt has recently publicized these numbers:

  • For the past 4 years, approximately two-thirds of students graduating from four-year colleges have student loan debt upon graduation
  • Nationwide, the average debt for graduating seniors with student loans rose to $23,200 in 2008, an increase of about 6%/year between 2004 and 2008
  • At some colleges, average debt soared to as high as $106,000

The good news is that there are ways to minimize and control student loan debt and many personal finance experts who offer tips on how to do this. These tips for affording student loans are not new—just a little dusty from not having been used for a while.

Liz Pulliam Weston, a personal finance advisor at MSN Money, wrote a terrific article with tips for affording college and student loans:

How much college debt is too much?

Two years later, with the country in a deep recession, that question is even more important. In addition to a refresher course on understanding your personal finances and federal loans vs. private loans, Ms. Weston also provides recommendations for student loan limits based on the degree you plan to pursue.

If you’re starting to think about going back to school next year, now is a good time to familiarize yourself with tips for affording your student loans after you’ve graduated.

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Black Mortarboard and dollarIf you saw the news about the University of California raising its tuition by 32%, you’re probably sympathizing with the UC students protesting loudly on campus. And who can blame them? The huge increase averages out to about $2500 more per student, and to anyone in a low-paying job or, worse, unemployed, another $2500 might as well be $25,000 as far as coming up with it is concerned.

But even considering all the students affected by tuition increases across the country, it’s not as easy as you’d think to figure out the real problem in paying for college these days.

Ian Ayres, a lawyer and economist who writes for the Freakonomics blog at the New York Times, suggested this today:

Why California’s Tuition Hike Might Be a Good Thing

He makes some interesting points and provides a different angle on the college cost problem and solution.

What do you think is the real problem in paying for college? Is the cost of your college education a bargain, just right, or too high? If you were successful in paying for college with no or minimal debt, how did you do it?

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