Posted on: Thursday, January 31, 2008
Seeking college aid worth the effort
By Sandra Block
Filling out the Free Application for Federal Student Aid is a tedious task, but it could produce a significant reward. Yet many parents of college-bound students don't bother with the FAFSA because they're convinced they make too much money to qualify for any financial assistance.
Here's why you should fill out the FAFSA:
Financial aid isn't limited to low-income families. Yale University announced last week that it is increasing financial aid for families with income of up to $180,000 a year. The announcement followed similar moves by Harvard, Duke and other top schools to reduce the burden on even upper-middle-class families.
You need a FAFSA to apply for federal student loans. All college students are eligible for unsubsidized Stafford loans, no matter how much money their parents make. These loans, which the federal government guarantees, offer lower interest rates and more flexible repayment terms than private student loans.
The rate for unsubsidized Stafford loans is 6.8 percent for the life of the loan. The rate for new subsidized Stafford loans, available to students who can show financial need, will drop to 6 percent on July 1. And under a federal financial aid bill enacted last year, Stafford borrowers will never have to spend more than 15 percent of their discretionary income on loan payments.
Once you've resolved to fill out the FAFSA, here's how you can improve your chances of receiving aid:
Apply online. You'll immediately receive confirmation that your application has been received, along with a preliminary estimate of your Expected Family Contribution — the amount your family will be expected to pay under the federal financial aid formula.
Know your deadlines. If you're applying to a state school in Connecticut, get busy, because the deadline for financial aid applications for such colleges is Feb. 15. That's the earliest state deadline, but several others impose a March 1 deadline.
Start collecting your documents. To complete the FAFSA, you'll need your 2007 income tax returns, bank statements, brokerage statements and mortgage information.
If you haven't done your 2007 taxes, you can estimate your earnings and revise them later if necessary.
Make sure to use the student's full legal name and Social Security number when filling out the form. If the student's name doesn't match the number in the Social Security Administration's database, your application will be delayed.
For more information, go to www.fafsa.ed.gov.