You’ve made it to your senior year of high school and can see your future ahead of you. What an exciting time! But you’re most likely carrying the worry about how you’re going to pay for your dream school and graduate without piles of student loan debt.
The key to solving the college debt mystery starts with the financial aid application process, which will always include the Free Application for Federal Student Aid, otherwise known as the FAFSA. You may have heard that the FAFSA process is long or intimidating, but we’re here to help you navigate this exciting and sometimes challenging road toward securing financial aid. Here are our FAFSA tips and strategies for college bound homeschoolers (or how you can secure the most financial aid possible).
What is the FAFSA?
Financial aid is essentially money paid toward your college costs that makes up the difference between what you can afford to pay and your college tuition. Financial aid comes in many forms, including grants, loans and scholarships. It is based upon your guardian’s income from January of your junior year to December of your senior year of high school, as well as other financial assets like checking account balance, 401K and investments. Most colleges and universities have a limited amount of aid, so you want to apply early to have the best chance of securing the help you need!
If you’re applying for financial aid, you’re in good company! Approximately two-thirds of college students receive financial aid. But not everyone receives the aid they need (and even fewer college students make wise financial decisions regarding tuition and debt). You don’t want to fall into the college debt trap as so many have done in the past.
The Class of 2016 graduated college with an average debt of over $31,000 each. While this doesn’t seem like a lot, debt of this amount can impact your future ability to buy a house, secure a loan, or provide for your family in years to come. Applying for the FAFSA is FREE, simple and crucial to avoid accumulating college debt that can sink you.
When to apply for the FAFSA
High school seniors who have chosen a college or university should apply for the FAFSA as soon as possible. The open date was October 1, 2016, which means you can apply NOW if you are headed to college for the 2017-2018 school year. The sooner you start, the more likely you are to receive financial assistance. If you’re not ready to apply yet, find out the deadline based upon your state and the school year you are applying for here.
If you’re ready to file now and secure aid, but haven’t completed your 2016 taxes, that’s OK! You don’t need your 2016 income tax completed to fill it out. You can fill it out with your 2015 income tax information. There is no need to update it later. This happens automatically. You don’t have to worry about that piece of the pie, the government does it for you!
Tricks to getting the most aid possible
While federal aid is a highly regulated process, there are a few tips and tools that may secure you more financial aid with the FAFSA. There’s a lot to know about federal aid, and those in the “know” will be in a position to secure more aid than those who are not!
- File as early as you can. The earlier you file, the better off you are. Not only will you get it out of the way, but 16 states award money based on a first come, first serve basis. In this case, the early birds really do catch the worms!
- Be accurate. If your FAFSA has mistakes, it could be delayed or rejected completely. Be as accurate as possible when filling out the FAFSA.
- Move student savings to a 529 account. According to Time Magazine “The FAFSA formulas assume that students should be able to spend 20% of their assets on college. For parents, the rate maxes out at 5.64% of assets.” This means that any account in your student’s name that is not a 529 (educational savings account managed by parents) will be assessed at 20 percent, not the lower rate of 5.64 percent. Moving your student’s savings into a 529 should protect you from the higher assessment rate.
- Pay your bills down with extra cash. The FAFSA does ask how much extra savings parents and students have in their accounts. Use your savings to pay down any debts as a way to honestly show more need. Remember, based on the FAFSA, those who have less in their savings have a higher need than those who have money in the bank.
This is an exciting and yet nerve-wracking time in your life. Don’t add to your stress by waiting until the last minute or filling out the FAFSA blind. Use our tips and tricks. File early to ensure you get the most bang for your federal-aid bucks!
Have you filled out the FAFSA before? Tell us your tricks in a comment below!