In this issue:
- Introduction
- Featured Article: Top Ten FAFSA Tips for Maximum Financial Aid!
- Scholarship Notes
- A Word from our Sponsors
- Privacy and Subscription Information
- Back Issues
- Sponsor this newsletter!
Welcome to the January 2005 issue of FinancialAidNews.com. We wish you a very happy, safe, prosperous New Year 2005. In this issue, we go for the jugular with tips on how to maximize your federal financial aid using the FAFSA, plus four full tuition scholarships! This is a newsletter you absolutely cannot pass up - send it to your friends and family!
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Featured Article: Top Ten FAFSA Tips For Maximum Financial Aid
Getting the most aid from the government is - or should be - the top priority for college and college-bound students as soon as the New Year rolls around. January 1, 2005 is the first day that the US Department of Education will accept FAFSA submissions, and it's vital to get yours in as soon as possible, as correctly as possible. We have a slew of tips for you to help you get the most aid possible.
First and foremost, file a FAFSA. You may qualify for federal financial aid that you didn't even know about. Don't make any assumptions about how much aid you will receive. Just go ahead and file. And even if you think you've got your college expenses covered, filing the FAFSA allows you to keep your options open, just in case you decide to apply for federal and state funding. Since the FAFSA itself is free, there's no harm done in filing it. You may want to get professional assistance with your FAFSA if you have complicated accounting issues - a good rule of thumb is, if you use a tax preparation service for your taxes, you should probably use a FAFSA preparation service, too. If you file with a professional preparation service, you can file it right now and it will be transmitted as soon as the doors open on January 1, 2005, guaranteeing that your application will arrive early.
Second, remember that most financial aid formulae calculate what you are eligible for based on what assets you and your family have. 35 percent of students' savings and assets are expected to be contributed toward their education (compared to less than 6 percent of parents' assets). Some parents choose to shift assets in their children's name to their own name, or to the name of a grandparent. If you are considering this option, use extreme caution. Check with a financial advisor before shifting any assets and be very careful if advised to shift any assets out of your immediate family, as you can get into a major legal tangle.
Third, file a FAFSA as soon as possible. Grants like the Pell Grant are issued on a first-come, first-serve basis, which means that the sooner you file your FAFSA, the better your chances are of receiving such aid if you are eligible. The closer you submit to January 1, 2005 (ideally on January 1!), the better your chances are of getting "exhaustible" aid, which means scholarships and grants. Once those awards are given out, they're gone!
Fourth, it's easier to fill out financial aid paperwork if you have completed your previous year's tax return. That's well and good, but it can be difficult to do and still get a FAFSA in early. The best thing to do is to gather up all your pay stubs for the year and from there estimate the taxes paid. You do not have to wait on a completed tax return to be able to submit the FAFSA. You may check the appropriate box indicating that you are estimating your income and then provide your best estimate based on check stubs, W-2 forms, or other income documentation. If your financial situation is similar to last year, you might want to use last year's tax return as a basis for your estimation. Remember that the FAFSA is NOT an IRS tax form. The FAFSA is administered by the Department of Education, while the 1040 is administered by the Internal Revenue Service, part of the Department of the Treasury. You can be severely penalized, even go to jail, for estimating or guessing on your IRS 1040. This is not the case on a FAFSA - wherever appropriate, use estimates in order to get your FAFSA in sooner, and when you estimate income and assets on your FAFSA, do not overestimate. Remember, your federal aid is calculated based on what income you have to contribute; the government's goal is to give out aid to as many students as possible, while your goal is the get the maximum amount of aid you can. The two are somewhat incompatible - so estimate as carefully as you can, and when in doubt, guess low rather than high.
Fifth, don't leave anything blank. If an answer is zero, indicate "0". If a question doesn't apply, indicate "0". If you're unsure of a question, answer "0". Blank answers are one of the top mistakes on a FAFSA that gets it tossed out immediately - along with any chances of getting federal financial aid. If you remember only one tip from this entire newsletter, remember that on the FAFSA, answering zero is your friend, and blank answers are your deadliest enemy.
Sixth, make sure you are using correct information! Have your school's correct federal school code. Check with your financial aid office, or use our handy online database of more than 14,000 schools at the Student Loan Network Eligible Schools Guide. Use your name as it appears on your Social Security card or in NSLDS (if you already have student loans). Using any other name or name variation (i.e. nicknames, short names like Chris instead of Christopher) than what is on file can delay or deny your FAFSA. Here's a short list of documents you should gather up before starting the FAFSA process:
- Social Security card
- Driver's license
- Alien Registration Card (if applicable)
- Current bank statement and mortgage information
- Completed 2003 federal income tax returns, including W-2s and 1099s forms
- Accurate estimate of your 2004 income
- Records of untaxed income, such as Social Security income, welfare, AFDC (Aid for Dependent Children), and veterans' benefits
- If applicable, records that relate to any unusual family circumstances (for example, medical and dental bills not covered by health insurance, unusually high child support costs or loss of employment)
- Records of your family's assets and investments, not including your primary residence
- Business and farm records (if applicable)
Seventh, if your parents/guardians are divorced, legally separated, or otherwise using custody arrangements, the non-custodian parent's income may be excluded from the family income calculations on the FAFSA. This can significantly change the aid you are awarded!
Eighth, turn life's lemons into financial aid lemonade. Bad investments - like that portfolio full of Enron stock - can be sold off at a loss and then counted against your income. Got stocks that have lost money? Sell them off before January 1, 2005, take the loss, and use this loss as a deduction against your income. This will increase your federal aid eligibility and also provide a handy tax break when you fill out your IRS 1040.
Ninth, use a professional preparation service to get your FAFSA in exactly on January 1. If you try to file a FAFSA with the Department of Education either online or by mail before January 1, 2005, it will be declined because processing hasn't begun yet. By filing with a professional preparation service, it will be loaded and transmitted as soon as the doors open, putting you as close to the front of the financial aid line as you can get.
Tenth, make copies of everything. We can't begin to tell you how many people call us each year saying they've filed paperwork but can't remember who they filed it with or what happened to it. Make copies of everything, and save them in a safe location!
No matter how you file your FAFSA, student financial aid is becoming tighter and tighter, so it's important to get your FAFSA submitted as fast as possible, as accurately as possible. Good luck from everyone at FinancialAidNews.com in 2005!
Scholarship season is just around the corner! That's right, January 1, 2005 heralds the commencement of two very important season - FAFSA season and scholarship season. Many scholarships begin accepting applications in the new calendar year, so it's more important than ever to have the best tools available for your search. That includes free solutions like Google and premium solutions like Financial Aid Officer's Scholarship Search. For a nominal fee, you get access to an ever-increasing database of scholarship awards, more than 2.3 million worth $14 billion.
This month's scholarships are the most incredible ever - full tuition scholarships! What if you could go to college for no tuition at all? You can - if you can earn one of these scholarships:
Attend college for $0 tuition at Berea College. All students admitted to Berea College are also given a full, four-year tuition scholarship.
Attend a major musical conservatory for $0 tuition. All students admitted to the Curtis Institute of Music are also given a full scholarship.
Barnes Full Tuition Scholarship in science. A full tuition scholarship to Colorado College.
The Bank One Bank Fellows Scholarship. Full tuition to Indiana University Northwest.
If you can't find the financial aid you're looking for online, try the FinancialAidOfficer.com Scholarship Search Service at http://www.financialaidofficer.com/scholarship_search/ today.
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