Understanding one of the easiest way to secure student aid.
If one or more of your children is getting ready to start looking at colleges, there are a lot of things to think about. Since EducationData.org reports that the average yearly cost of attendance at a public institution is over $25,000, figuring out how to pay for it is likely high on the list. That’s where the FAFSA, or Free Application for Federal Student Aid, comes in.
The Basics of the FAFSA
The U.S. Department of Education provides approximately $121.8 billion annually in federal grants, loans, and work-study funds to help around 10 million students complete their education, according to U.S. News experts Farran Powell and Emma Kerr. The FAFSA is a key tool in determining who qualifies for these funds.
The FAFSA is “the official form that students or their families use to apply for financial assistance for college from the federal government.” It collects details about your household’s financial situation to determine the type and amount of aid you or your child may qualify for.
Who Qualifies for Aid?
The FAFSA considers factors like household income, number of dependents, and other assets or investments. However, as Epstein notes, it doesn’t include the value of retirement accounts, life insurance policies, or home equity.
This information is used to calculate an Expected Family Contribution (EFC), which determines the kind and level of aid offered. Families with an EFC of zero – common for households earning $27,000 or less – may qualify for a Pell Grant, which is a federal award based on financial need.
Even if you don’t qualify for a Pell Grant, it’s worth filing the FAFSA, as it may unlock other opportunities like scholarships or work-study programs. Financial aid experts like Ilyan Nunez of KIPP New Jersey emphasize that “all families should submit a FAFSA whether they think they will qualify for aid or not.”
How to Prepare
Since the FAFSA is a government document, accuracy is crucial. To avoid errors and maximize your chances of receiving aid, follow these tips:
- Start early: StudentAid.gov recommends beginning the process as soon as possible and reaching out to school counselors or financial aid offices for guidance.
- Meet deadlines: Missing deadlines could result in losing out on aid opportunities, so make note of key dates.
- Have your documents ready: Gather Social Security cards or Permanent Residence cards (if applicable) and records related to income, assets, and investments.
- Include at least one college: You don’t need to apply to a school before filing the FAFSA, but the form requires you to list at least one institution. Kantrowitz recommends listing an in-state public college first to qualify for state grants.
Your Next Step
Filing the FAFSA is one of the most effective ways to make higher education more affordable. Starting the process early and being prepared can make all the difference in securing the financial aid your child needs.
At Five Star Bank, we’re here to support your family’s financial journey. Stop by one of our local branches or connect with us online to explore how we can help with your savings and education goals.
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