Visit the Building Blocks of Paying for College

Most traditional college students are dependent – even if they are paying their own way through college or no longer have a relationship with their parents. There are special circumstances in which a traditional college student would be considered independent that will be explained here.

However, if you are like the growing number of non-traditional students returning to college or starting for the first time, even if you have the financial support of your parents for the costs of your education, you may be considered independent for the sake of the financial aid application. In fact, in 2000, independent students made up 37% of undergraduates in both public and private 4-year schools, and 64% at community colleges.*

Students are classified as dependent or independent because federal student aid programs are based on the principle that students (and their parents or spouse, if applicable) are considered the primary source of support for postsecondary education.

The philosophy of the federal government is that it is the parent’s responsibility to provide for their children’s education. Your parents’ ability to pay is considered when deciding your eligibility for financial aid, not whether they actually give you any money.

The federal definition of an independent student is one who can answer yes to any of the following questions, for the 2008-2009 filing year:

1. Were you born before January 1, 1985?
2. Will you be working on a degree beyond a bachelor’s degree, such as a master’s or doctorate, in school year 2008-2009?
3. As of the date you will be submitting the FAFSA, are you married? (Answer yes if you are separated, but not divorced.)
4. Do you have children who receive more than half of their support from you, or do you have dependents (other than your children or spouse) who live with you and receive more than half of their support from you, now and through June 30, 2009?
5. Are you an orphan or ward of the court or were you a ward of the court until age 18?
6. Are you a veteran of the U.S. Armed Forces?
7. Are you currently serving on active duty in the Armed Forces for other than training purposes?

Applicants who answer “no” to all of these questions are dependent students and are required to report parental information on the application.

In unusual circumstances, a student who does not meet any of these criteria may still be considered independent if a compelling case can be made to override the dependent status. This can only be done by a qualified financial aid officer and is very rare.

Dependent Students

Unless you meet any one of the criteria stated under Independent Student Status or there are some exceptional circumstances, you will be considered a dependent student for financial aid purposes.

Exceptional circumstances include but are not limited to:

• Your last surviving parent died after you first applied for financial aid.
• You and your parents are separated and you have been granted refugee status by the U.S. Immigration Service.

Either of these circumstances can be considered, but do not automatically give you independent status. All circumstances must be documented before consideration. If you believe your circumstances may be one of these exceptions, please see a financial aid counselor at your school or at a prospective school.

You should be aware that you are not automatically independent for financial aid purposes simply because your parents stop claiming you as a tax exemption or refuse to give you support for your college education. Your parents’ unwillingness, inability or reluctance to help pay for your educational costs does not make you independent. Becoming emancipated or qualifying for in-state tuition at a public institution also does not mean that you are independent for federal financial aid purposes. In cases where you do not qualify as an independent student but you receive no parental support, counselors in the financial aid office can provide you with information about alternative financing and employment opportunities to help you pay for your college expenses.

Independent Students

A common misconception is that by virtue of not being claimed on your parent’s income tax for two years, you can become an “independent” student.

In unusual circumstances, a student may be able to make a compelling case for their inability to provide the necessary information on the FAFSA. Such examples are:

• The parents reside in a location where mail delivery does not exist.
• The parent is mentally handicapped.
• The student suffered documentable parental abuse and contact with the parent would put the student in danger.
• The student was abandoned by parents
• Both parents are incarcerated or institutionalized.
• Both parents lack the physical or mental capacity to raise the child
• The parents whereabouts are unknown or the parents cannot be located
• The parents are hospitalized for an extended period
• The student was living in an unsuitable household (e.g., child removed from the household and placed in foster care)
• A married student’s spouse dies or student gets divorced.

Reasons that are NOT considered for changing status are:

• The student has been supporting his/herself for a time.
• The student has been supported by other relatives or friends for a time.
• The student does not live with his/her parents.
• The student is angry with his/her parents and wishes not to speak to them.
• The parents are able but unwilling to provide their information.
• The parents are living in another country.
• The parents refuse to contribute to the student’s education;
• The parents do not claim the student as a dependent for income tax purposes.

Dependency Overrides

A dependency override is when a financial aid officer changes the status of a student for the purpose of financial aid from dependent to independent. It is a very rare occurrence and typically involves additional paperwork, verification and third-party referrals. Overrides are only done for students in exceptional mitigating circumstances, and not for families who simply want to change how their student’s education is financed.

* Independent Undergraduates, 1999-2000. National Center for Education Statistics. http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2005151

The financial aid award can include a combination of scholarships, grants, loans, and even a work-study job. Since these types of aid are very different from each other, it’s important to know the differences, what you might have to do to keep your financial aid, and how it might change in subsequent years of college.

You can also accept or reject parts of your award package. You can accept a smaller loan amount, for example, but know that you will have to find the money elsewhere.

Take the “Free Money” First
Gift aid is the part of your financial aid package that doesn’t have to be repaid. It can include scholarships, grants or a tuition waiver. It’s still important to know a little more about each of these items, so you don’t risk losing them! Some questions to ask include:

• Do I have to do anything to keep my scholarship?
• Is there a grade point average minimum or other condition?
• If so, how long do I have to maintain that minimum or meet any other conditions?
• Do I have to keep the same major, or can I change majors?
• If I am awarded a scholarship from other sources, what happens to my financial aid?
• Will I get the same scholarship each year?

Earning Money is a Good Thing, Too
A financial aid award might include work-study (or federal work-study). This is a part-time job that enables you to earn at least the federal hourly minimum wage. The amount of the award depends on when you apply for the job, the level of financial need, and the availability of funds from the school. Work-study jobs can be either on campus or off campus and could be related to the student’s course of study. The amount you can be paid, or number of hours worked, cannot exceed the Federal Work-Study award amount. Some questions to ask about work-study include:

• How many hours per week am I expected to work?
• Will the school help me find a job?
• What is the rate I will be paid?
• How often will I be paid? Does the paycheck come to me, or to the school?
• What if I need – or want – to change my job?
• If I don’t think I can handle my school work and a job at the same time, can I switch the award amount from work-study to a loan?

Borrowing is Common, but Know What You Are Getting Into
More than 50% of students are awarded loans as a part of their financial aid package. Sometimes it’s not clear that an item in your award letter is a loan, so make sure you know all of the terms and ask the school for clarification. You could be awarded subsidized or unsubsidized loans – subsidized means that the government pays the interest while you are in school. Some questions to ask include:

• What are the terms of each loan?
• What is the interest rate of each loan?
• Are there any fees associated with each loan?
• What is the total cost of each loan (or how much will I owe by the time I’m finished with school)?
• When do I have to start repaying each loan?
• How much will each monthly payment be?
• Can I start repayment early, to save on the interest?

Key Features of 529 Plans
Contributions in most 529 plans grow entirely tax-free, meaning there are no capital gains taxes paid on them. About half of the states currently offer tax deductions on contributions into their 529 plans.
Anyone, regardless of income level, can contribute to the plan, whether the 529 plan is for their own kids or that of friends or family.

There are two kinds of plans: prepaid and savings. 529 prepaid plans are contracts that you buy to lock in today’s tuition rate at public and some private colleges within a particular state. There are restrictions on using funds in 529 prepaid plans for out-of-state colleges and the impact on financial aid is worse than if you invest in 529 savings plans. 529 savings plans are made up of mutual funds that grow tax-free and can be used for any qualified higher education expenses, meaning tuition, room and board, and other miscellaneous expenses associated with college.

You can invest as little as $25 to open a 529 plan and invest over $300,000 per beneficiary, but not all at once. There are currently over 75 529 plans and over 700 different investment options to choose from, with many well-known fund managers, such as Fidelity and Merrill Lynch.

529 plan costs range from 0 - 2.5% of your assets per year, plus front and/or back-end sales fees if you buy plans through brokers. So if you have $100,000 invested and the expense ratio is 1.5%, you pay $1,500 in that year - standard practice in the mutual fund industry. Selecting plans with lower expense ratios is generally a smart strategy, although how a plan performs also impacts whether that $100,000 grows rapidly or not. The states that govern the plans as well as the 529 plan fund managers receive this compensation for administering the plan and managing your money.

Rebate and tuition discount programs like Upromise, Babymint and Sage Scholars offer parents “kick-backs” of 1-10% on purchases made with affiliated retailers. Such rebates may be invested in specific 529 plans.

Key Features of Coverdell Education Savings Accounts
A Coverdell ESA (formerly called an Education IRA) is the most attractive way to save for K-12 or higher education expenses, including UGMA/UTMAs and mutual funds. However, there are income requirements that preclude some upper income families from participating.

Coverdell ESAs, in addition to tuition, covers transportation costs and uniform expenses. Additionally, Coverdell funds may be used for items such as computers and academic tutoring for children in grades K-12 at both public and private schools, in addition to tuition, fees, books, supplies, room and board for college. Another benefit of Coverdell is the added discretion that the account holder has over the investment direction of the funds in the account, which can be more freely allocated among stocks, bonds and mutual funds.

Coverdells have certain provisions that prevent some from participating. Among them is the fact that the $2,000 maximum contribution applies to both the account holder and the beneficiary. In practice, the beneficiary can only have a total of $2,000 contributed to his or her account in any given year, regardless of the number of contributors to that account. In addition, the account holder can only make a maximum contribution of $2,000 per beneficiary.

Excerpted from articles written by Jim Boyle, President of College Parents of America

That being said, you also have to consider the benefits of higher education – both financial and otherwise. The College Board reports that typical college graduates earn up to 60% more over their lives compared to high school graduates. There are more than financial benefits, too – individuals with college educations are healthier, exercise more and smoke less. In addition, the study found that society benefits more from a population with a postsecondary education, with higher voter turnouts, lower unemployment rates, and even a lift in wages of workers with lower education levels in metropolitan areas with higher overall education levels.

A few facts to consider:

• The average tuition for a four-year private school in 2006-07 was $22,218 and a four-year public school was $5,836.*
• The average surcharge for an on-campus room and meal plan at a four-year school in 2006-07 ranged from $6,960 to $8,149.*
• The average amount spent on books and other supplies in 2006-07 was over $900.*
• The average transportation cost for students in 2006-07 ranged from $722 to $1,224. Expenses could include public transportation, gas, car insurance, maintenance, parking fees, and travel home for breaks and holidays.*
• The average amount spent on personal expenses in 2006-07 ranged from $1,277 to $2,048. These could include lab fees, athletic fees and equipment, club, sorority or fraternity dues, study abroad expenses, medical expenses, and emergencies.*

These ranges are helpful, but it can be hard to use them to determine what college is really going to cost for you or your son or daughter. It is often hard to get a sense for the total cost because there are so many items that add up to the complete sticker price, and then there are a number of other factors (scholarships, discounts, a part-time or work-study job) that – thankfully – lower that number to the real price paid by a family.

Start your math by finding each of your prospective school’s published expenses for Tuition & Fees and Room & Board. Search on the school’s website or look around the Financial Aid Office’s website. Look for an itemization of the incidental costs (and apply your own judgment to the school’s estimates).

Some things to consider when you break down those incidental expenses:

• Some schools list average costs for travel that might not consider how far you really have to go, or how often you will go home. A student who can bum a ride with a friend and chip in $50 for gas certainly will pay less for one trip than the one from Hawaii who goes to school on the mainland. Going home more often is obviously more expensive, no matter how you get there.

• Speaking of driving, having a car on campus is very expensive. Gas, maintenance, and insurance are just some of the additional costs. Many schools with parking restrictions don’t allow first-year students to have a car at all. If you go to school in a place with a premium on parking, you might also have to pay for a permit or garage fees – or parking tickets. Look into public transportation and shuttle buses for when walking isn’t feasible. Riding a bike to and around campus is a great way to save money and stay in shape (just make sure you have a helmet and a light)!

• Consider your meal plan options. Some plans force you to use the balance before the end of each year or semester while others are more flexible. It’s hard to know how often you’ll hit the campus cafeteria before you get there, but know that even if you live in a dorm, you will likely have access to a kitchen where you could prepare your own, inexpensive meals.

• Personal expenses can also add up. Keep room in your budget for things like medication, laundry, haircuts, clothing, and phone bills.

• Don’t forget to include some extra funds for having fun. Extra-curricular activities and sports aren’t always free – consider the cost of fees or dues, athletic equipment, uniforms, travel, or tickets for performances.

Most college guidebooks include Tuition & Fees and Room & Board; some will add it all up. Try to find the itemized accounting, and add up the numbers yourself. That total is as close to a reasonable expectation of the entire cost of college as you can get. Check what academic year for which the data is provided – if it is the current year’s cost, add 5% as a reasonable expectation of next year’s cost. If you’re really ambitious, go ahead and run a four year calculation, increasing the cost by 5% or so each year.

* Source: The College Board Trends in College Pricing, 2006.

First, the information in your FAFSA is submitted to the Department of Education’s Central Processing System.

If you submitted the FAFSA online, using a PIN for your signature, you can check the status of your application at www.fafsa.ed.gov within 3-5 days. If you submitted a paper signature by mail, it’ll take 7-10 days to be able to see the status of your FAFSA online.

If you submitted the FAFSA online and provided an email address, once your application has been processed, you should receive an email notification with a link to an online document called the Student Aid Report (SAR). Using the PIN you set up to electronically sign the FAFSA, you can view the SAR online at www.fafsa.ed.gov.

You’ll also get this same email notification if you submitted the FAFSA by mail and provided an email address, but it could take about 14 days longer.

At the same time that you can view it, your SAR is made available to the schools you listed on the FAFSA. The Financial Aid Office can then start evaluating your Expected Family Contribution, requesting more information from you if needed, and determining your financial aid award.

If you find that you made a mistake when filing, don’t worry! You can make corrections after the application has been processed. You MUST do this online, with a PIN. You may want to notify the schools who received your SAR so they know to expect an updated version.

You may start hearing from schools before you have decided to enroll, or even before you have been accepted. You may receive offers of financial assistance, or award letters, with a wide range of gift or self-help aid options. Be sure to carefully read the information you receive from each school so you understand the amount and types of aid that’s available to you.

The race for financial aid funding begins early each year, during a short window in the winter when key pieces of information are submitted to the colleges and universities that your child might attend the following fall. You should approach this time with one crucial item in your dashboard – the FAFSA.

FAFSA stands for Free Application for Federal Student Aid. Developed by the U.S. Department of Education in the 1990s, the FAFSA is intended to help schools make fair decisions about how and to whom they award need-based financial aid dollars.
Fair decisions can be made because the FAFSA allows for an evaluation of family financial circumstances that is consistent and equitable across all applicants.

Two key assumptions are made with that evaluation:

1. The primary responsibility for paying for education rests with the parents of dependent children, and

2. The students themselves are expected to contribute a reasonable portion of the educational expenses.

Each edition of the FAFSA is issued on January 1st of each year and is available at www.fafsa.ed.gov. Filing online is recommended for both speed of transmission and accuracy of information. However, you can choose to use a hard copy to submit the application. Forms should be available at your high school’s guidance or college counseling office or at the college or university’s financial aid office.

Parents of a students in their junior year of high school or younger don’t have to worry about filling out a FAFSA. . .yet.

If you are the parent of a current high school senior – or a current college student – and you hope to receive any form of financial aid for your child’s education, then you MUST submit the FAFSA. Try to do submit it as soon as possible in the New Year, perhaps in parallel with the preparation of your 2006 income tax returns.

Be aware of several myths when it comes to financial aid. They include:

• Only students with high grades or test scores get all the aid:
• Only extremely financially needy students can receive aid, so if your family income is high, then don’t bother to apply; and
• If your older son or daughter didn’t qualify for aid, then neither will your other children.

Truthfully, the vast majority of financial aid dollars go, as they should, to those who truly need the money. Merit funding (or aid based on grades, test scores or other non-financial criteria) is available, but only at some schools, and in fairly limited quantity. Merit dollars are growing faster than need-based funding, but many of the most selective schools in particular have more than their share of deserving – and high-achieving – applicants. They have adopted a “need-blind” policy that awards financial aid to any accepted student, regardless of their financial circumstance.

Financial aid does not just mean scholarships and grants, or “free money.” Financial aid actually refers to money to help pay for college that is awarded (the free money), paid in return for work-study, or loaned with the backing of the U.S. government.

If you want your child to be eligible for any or all of these types of financial aid, then you must complete and submit the FAFSA as soon as you can in the year your child will start their postsecondary education. If you haven’t done so, and you have a student in their second, third, forth, or even fifth (!) year of college, you should still submit the FAFSA to qualify for aid for the remaining college expenses.

Deadlines vary from school to school but no school will award a cent of need-based aid until the FAFSA has been reviewed by the U.S. Department of Education and by the school’s financial aid office. In fact, some schools require information beyond what is contained in the FAFSA, either on forms they have created themselves, or on a form called a PROFILE provided by The College Board. Check with the college or university to see whether they require more than just a FAFSA.

Written by Jim Boyle, President of College Parents of America

The FAFSA is just the first – but some would say the most difficult – part of the student financial aid process. The FAFSA collects personal and financial information that determines a very important number in the financial aid needs analysis – the Expected Family Contribution, or EFC.

The needs analysis is based on a few principles. First, the parents have the primary responsibility for the cost of higher education. Second, the student is responsible for some contribution to educational costs. Third, families should only be evaluated in their present financial situation. And lastly, the family’s contribution should be determined consistently and equally for all families with children attending institutions of higher education.

With that in mind, it helps to understand how that Expected Family Contribution is determined. The calculation is called the “Federal Methodology” and was created by Congress. There are two ways to determine EFC, one for independent students and another for dependent students. Most traditional freshmen are considered dependent, so we’ll describe that calculation here.

An independent student meets any of these criteria:

• Is at least 24 years old by December 31 of the award year covered by the FAFSA
• Is a graduate or professional student
• Is married
• Has children or dependents (other than a spouse) for whom the student provides more than half of the support
• Is an orphan or ward of the court
• Is a veteran of the U.S. Armed Forces or is currently serving on active duty
• Is determined to be “independent” by a financial aid administrator based on unusual circumstances

The information you entered into the FAFSA and that are considered for the EFC include parental income, parental assets, and student contributions, with some calculations to exclude enough of the family’s resources so they can still pay living expenses.

The first step in the EFC calculation is to determine what portion of the parents’ income is available to contribute to the costs of college. It includes total income but then subtracts taxes paid, child support and basic living expenses, and an employment allowance (basically a percentage of the income of the parent who earns less, or of the single parent’s income). This number is the available income.

Then, parental assets are analyzed. The value of cash, savings, checking accounts, the net worth of a business or farm, and investment or real estate net worth (excluding the family’s primary residence) are added together. From that, specific savings for education and an asset protection allowance (a portion of assets dependent on structure of the family and the value of assets) are subtracted. A part of this total is used to determine the available contribution from assets.

Available income and the available contribution from assets are totaled to equal the EFC.
This number is subtracted from the total cost of attendance (or COA) as determined by the school, to leave you with a dollar amount to define your “need.”

The information on the FAFSA determines what the EFC, and subsequently, what the need is. Each school you sent your FAFSA to may use this information differently to determine how much aid you will qualify for, and how to make up that need with a combination of gift-based aid (or money you don’t have to repay, usually in the form of grants or scholarships) and self-help aid (or loans and money earned from employment).

In creating the financial aid award package, financial aid officers will first use up federal grants and low interest federal loans for those with the greatest need. The most common examples of these kinds of aid are ACG Grants, Pell Grants, Perkins loans, and subsidized Stafford loans. If any state grants are available, those might be included if you are eligible. A work-study job could also be included, in which the student works to earn a portion of their aid over the school year. Scholarships are counted in the aid package – if you were awarded scholarships from outside sources, the financial aid officer may count that as part of your available contribution. Some schools have their own money to give away for financial aid, too, so once all of the federal and state resources are exhausted, you might see a scholarship, grant or loan from the school in your award package.

This overview only provides an insight into the process used when a school follows the standard federal methodology for determining financial need. Many schools require additional forms after the FAFSA, such as The College Board’s PROFILE ® or a school’s unique financial aid form. The information collected in these supplemental forms can be used to adjust the EFC, either in your favor or not. So don’t be surprised if you try your own calculations and they differ from what you see in a given school’s award package. It helps to understand how each school to which you are applying calculates a student’s financial aid, if you are going to use the aid award as a factor in your decision to enroll. (more…)

1. Is it worth it to save for college?

2. If we do, are we penalized for saving?

The short answers are, 1) yes, and 2) maybe. The reason the answer to the first question is yes is that saving is better than borrowing, no matter what the circumstance. It is always better to have interest paid to you when you save money rather than to pay interest to someone else when you borrow money.

Let’s look at an example to help illustrate this point.

The Johnsons are savers. This family started saving for college when their son Timmy was five years old. They put aside $175 each month, which added up to $2,100 per year. After 13 years, they will have $27,300 saved. If their return is 5% per year, by the time Timmy is ready for college at age 18, they will have accumulated about $40,000.

The Baker family did not save any money for their children’s college educations. As their daughter Jennifer is about to start her freshman year, the Bakers look at how much of their income they can use to pay Jennifer’s college expenses. They decide they need to borrow $10,000 per year, or $40,000 total, assuming she finishes in four years and her expenses are the same each year. The interest rate is 6.8% with a 10-year repayment period. After Jennifer graduates, she gets a repayment schedule from her lender. Her total debt, including both the principal and the interest, comes to $55,238.

That $40,000 of borrowed money turned into $55,238 of debt.

It is clear with this comparison that the Johnson family made the wiser financial decision. For the same $40,000, they paid $27,300, while the Bakers will have paid more than $55,000.

Saving for college by itself is a good idea, provided the family doesn’t do it at the expense of maintaining normal living standards, putting aside money for emergencies and having an adequate retirement plan. Even without the comparison to borrowing student loans - remember, the $27,300 still turns into $40,000 - it is reasonable to measure saving against borrowing because loans are the primary means of paying for college in today’s world.

Assume that based on this information, we agree with the idea that setting aside an affordable amount each year makes sense. (Incidentally, it is wise to start saving for college when each child is born, but at least begin by age 8 so there will be 10 years of contributions and the accumulation of interest.)

Suppose that, over time, a family sets aside about $50,000 in a 529 plan. Based on the cost of college by the time the child enrolls as a freshman, it’s possible that this amount is not enough to pay all the college expenses, and it is necessary to apply for financial aid.

To go back to the second question, if a family does save, are they penalized for it? The answer is “maybe” because it depends on how the saving is done. If the $50,000 in the 529 plan is the only savings the family has, most of it will be protected from the calculation a school will make about how much a family needs to contribute. The “need formula” used by the federal government and the schools is the total cost of attendance less the amount the family can contribute. The difference is the need upon which financial aid is based. The formula includes an asset protection allowance so that the first $50,000 worth of savings in a 529 will not have an impact on the family’s eligibility for financial aid.

Assume the family has an additional $50,000 in savings or investments that maxes out the asset protection allowance. The $50,000 in the 529 plan is subject to the need formula and will increase the expected family contribution by about $2,500. If we assume that the $2,500 won’t need to actually be paid until well into the academic year, the family actually comes out even. Using a 5% return on the college savings, the family can earn back nearly the entire $2,500 in interest.

The bottom line is that the need formula will ask each family to contribute anywhere from zero to an amount that will need to be covered from the return on any college savings. In the end, that doesn’t seem like such a “penalty” for saving.

The application is made available on January 1st of each year for the next school year. (So on January 1, 2008 for the school year starting in the Fall of 2008 and running into 2009). That may seem really early when, as a high school senior, your child doesn’t even know what school he or she will be attending yet!

Don’t worry about that – you can have the FAFSA sent to up to six schools and you still only have to fill it out once, per student, per year. Even if your senior can’t decide among more than six, you can always make corrections to an application after it has been processed so it gets to the right place.

What’s key to remember is that with all financial aid, the sooner you apply, the better your chances of receiving financial award money.

The federal deadline for filling out the FAFSA is typically at the end of the school year for which you are applying (so for the 2008-2009 school year, it would be around June 30, 2009!). However, without the FAFSA, you can’t get the aid when you need it (like when the tuition bills are due). Also, many states have application deadlines for the FAFSA because they use the application to determine how to allocate funds from the state. Some state deadlines are as early as March 1st. Schools themselves may do the same thing, so remember, first-come, first-served!

This doesn’t mean you should get up bright and early on New Year’s Day with your calculator and pencil. The FAFSA requires a lot of financial information you may not even have yet, such as tax returns for the previous year. You can estimate those numbers based on the year before, but then you have to go back and make adjustments later. It’s best to gather all the data you need at once and get it done with the most accurate information. That might mean waiting until you, as parents, or your child, files a tax return. Another great reason not to wait until April 14th to take care of your taxes.

The Department of Education does a great job of preparing you to fill out the FAFSA on their website, including a checklist of all the documents you’ll need. If you know you want to file electronically, before you even have any of the financial information you’ll need, you can apply for a PIN. Your PIN is your electronic signature, so it’s an important number you’ll want to keep safe and not share with anyone. It takes 1-3 days to get a PIN electronically and you can use the same PIN to sign the FAFSA each year. So plan ahead and get that PIN first, keep it in a safe place, and have it ready when you sit down to fill out the FAFSA.

Next: FAFSA: The Form Itself
The quickest and easiest way to file is to use FAFSA on the Web: www.fafsa.ed.gov. You may also pick up a paper copy from your high school guidance counselor or your school’s financial aid office, and submit it through the mail, although this will take longer to process.
If you are doing the online version, know that you can stop and save your information to come back at a later time. You don’t have to do it all in one sitting – the Department of Education saves your information for 45 days or until the federal deadline has passed.

The FAFSA is available in both English and Spanish and asks questions about:

• Age and marital status
• Educational, residency and dependency status
• Income and household finances
• Investments, business and farm records
• The types of financial aid in which you are interested

In order to be eligible for federal student aid, the student must:

• Be a U.S. citizen or eligible non-citizen
• Have a valid Social Security number (unless you’re from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau)
• Comply with Selective Service registration, if required
• Have a high school diploma or a General Education Development (GED) Certificate or pass an approved ability-to-benefit (ATB) test
• Be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program at a school that participates in the federal student aid programs
• Not owe a refund on a federal grant or be in default on a federal student loan
• Not have certain drug convictions (see www.fafsa.ed.gov for more detail).

Dependent Students
Most typical undergraduate students are considered dependent, even if they live away from their parents and support themselves. For the purpose of the financial aid application, a student is considered independent if she or he:

• Is 24 or older as of December 31 of the present year
• Is married
• Is enrolled in a graduate or other post-bachelor degree program
• Can claim others (besides a spouse) as legal dependents
• Is an orphan or ward of the court (or were until the 18th birthday)
• Is a veteran of any branch of the United States Armed Forces

Good news! Once you have filled out the FAFSA for the first time, it gets much easier the next time. Each student needs to submit a FAFSA for each school year but the renewal process is shorter than the initial application. Just keep your PIN and the same deadlines in mind each year.

For more information on the FAFSA, visit the Department of Education’s website at
www.fafsa.ed.gov