Daily Aid 63: Scholarship money running out already?
Daily Aid 63: Scholarship money running out already?
Student Financial Aid News
From Inside Higher Ed:
Boston University is today announcing plans for more budget cuts and reallocations, following a 41 percent increase in mid-year financial aid applications from students. The university has already instituted a hiring freeze and is now planning to review various services — in areas such as communications, finance, alumni relations and research administration — to look for ways to reorganize to become more efficient. Further, the university is reviewing the subsidies it provides to various institutes and centers. A university statement said some layoffs are “very likely.”
Commentary
A 41% increase in mid-year applications is nothing compared to what’s coming. Without disclosing too much proprietary data, I can safely say that interest in the FAFSA and our free FAFSA guide web site, FAFSAonline.com, is up 150% based on people visiting the site. There isn’t a single moment of the day when at least a dozen new people are stopping by, even at 3 AM.
States, colleges, and the federal government have failed to correctly estimate just how busy this year will be and just how great the need for financial aid will be this year. If you’re not already getting going with your financial aid applications, you truly risk being left out in the cold.
From NASFAA and MSNBC:
“The demand for scholarships to attend Arkansas State University next fall has already surpassed the funds available, according to ASU officials,” msnbc reports. “Due to ASU-Jonesboro’s increased publication of scholarship information, the efforts of the Admissions recruitment staff, and an increased public awareness of ASU and its institutional scholarships, the demand for scholarships has exceeded the budget for such scholarships.”
Commentary
Scholarship money is going to run out. There’s no kind way of putting it. There’s no gentle reassurance that can be provided. Free money, in the form of scholarships and grants, is going to run out this year. The fiction spun by some financial aid consultants of “millions of dollars in scholarships go unclaimed each year” will shortly be proven very, very wrong. In fact, I would go as far as to say that any source of low-cost funding for college that isn’t a student loan is going to be tapped out very soon.
Get moving on your financial aid, okay?
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Mail Bag
Beata writes in:
Hey Chris,
I’ve been gearing up for college ever since the summer before my Junior year of high school. I’ve read up on financial aid more than anyone I know. I’ve been applying for scholarships like crazy and on New Years I started to fill out my FAFSA as far as I could. The thing is, my mom hasn’t filed her taxes yet. I know I could use her information from last year but here’s the thing: last year’s taxes include my dad’s income who passed away in November of 2007. We already know (from my sister filling out her FAFSA last year) that this will count against me so this wouldn’t be such a great idea.
I’m going to wait until my mom files her taxes (which she said she’ll do in February) but I’m getting nervous.
Is there nothing I can do but wait?
First, my condolences on your father. Because your father was not a source of income for tax year 2008, it would indeed be a bad idea to use tax year 2007 data for the FAFSA.
If you have your mom’s final 2008 pay stub, you can use the information in there to estimate the tax return data for the FAFSA. Grab a copy of the IRS 1040 from the IRS web site and do a rough, admittedly fuzzy tax return for your mom based on the pay stub, then use that data for the FAFSA.
You may have to file a FAFSA correction later in the year once your mom’s official taxes are done, but you are on the right track by getting the FAFSA done as soon as possible.
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Unfortunately, the effects of the recession are very real. With so many workers (most of whom have families to support) losing their jobs, more students will naturally need more financial aid just to finance for college.
With stiff competition for aid, urgency in applying for student aid is a must.
This year the largest and oldest FAFSA preparer – Student Financial Aid Services – is predicting fierce competition for aid because of the more than 40% increase in calls it had for FAFSA advice in just the first five days of the season.
The federal aid application, known as FAFSA, asks 137 tax and asset questions and puts many people off – more than 8 million according to the Dept. of ED. While the form is “free” like IRS income tax forms are “free,” there is professional help for those who don’t want to wrestle 2-3 hours with the form and who want to avoid mistakes while maximizing their eligibility for student aid.
(About 2 million FAFSA forms are rejected each year for errors – time loss correcting them means aid could be going to others not you in this first come, first served world.)
There are 9 federal, 603 state, and more than 7,000 campus-based aid programs. Most aid is given out on a first come, first served basis – but grants and work-study are scarcer than loans so being among the first is important.
Nearly every student is eligible for some form of financial aid, including low-interest federal Stafford and/or parent PLUS loans, regardless of income or circumstances, provided a student:
•is a U.S. citizen, a U.S. national, or an eligible non-citizen;
•has a valid Social Security Number;
•has a high school diploma, GED, or equivalent;
•is registered with the U.S. Selective Service (if a male ages 18 to 25);
•completes a FAFSA promising to use any federal aid for educational purposes;
•does not owe refunds on any federal student grants;
•is not in default on any student loans; and
•has not been found guilty of the sale or possession of illegal drugs during a period when he/she received federal student aid.
You don’t have to be a full-time student to receive some type of aid. And you don’t have to wait until you or your parents have filed your income taxes. You can estimate earnings. Waiting to apply could cost you aid.
Unfortunately this is a sign of the times. Money for education is running out and at the same time enrollment is up because kids coming out of high school are less likely to find a good job. We can only hope that Obama an his stimulus package will help turn things around.
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