Dunnan on Dollars

  Personal Finance Tips from Nancy Dunnan

Filing The Free Application
For Federal Student Aid

January 25, 2008 - Maybe you’re rich. Maybe you’re not. It doesn’t matter. If you have kids applying to college you should fill out the FAFSA (Free Application For Federal Student Aid) form.

Tip: Deadlines for state schools are posted at: www.fafsa.ed.gov. For private schools, check the school’s website.

                             HOW TO FILE

There are two ways to file – the old fashioned paper-and-going-to- the-post-office method or going online. There’s a distinct advantage to opting for an online application. First of all you’ll quickly receive a preliminary estimated of the Expected Family Contribution (that’s the amount your family must pay based on the federal financial aid formula) and, second, you can list up to 10 schools that you want to receive your financial information.

With a paper application, you will be limited to just four schools, rather than 10.

                                      WHO SHOULD FILE

Keep in mind that financial aid is no longer just for low income families. As you probably have noticed, some of the Ivy Leagues and other pricey private schools are boosting financial aid for higher income families. Yale, for example, recently announced that it was increasing aid for families with annual incomes up to $180,000. Harvard, Duke and other top notch institutions have new and similar policies.

The FAFSA is required for federal aid, state aid, scholarships and grants from private schools.  You also need the file is you’re applying for a federal student loan, such as the Stafford loan.

Note: A federal financial aid bill passed in 2007 brought good news to those with Stafford loans, which are federally guaranteed. Stafford borrowers will never be required to spend more than 15% of their discretionary income on loan payments.

                                      REQUIRED DOCUMENTS

Here’s what you’ll need when filling out the FAFSA:

o Your 2007 federal tax return (or your estimated 2007 income)

o Your business financial statements or tax return

o W-2 forms

o Documents relating to any income that’s not taxed, such as Social Security, welfare payments and tax-exempt interest income

o Brokerage firm statements

o Bank statements

o Mortgage statements

o Your student’s Social Security number

o Details about child support: paid or received

o Details about 2007 medical expenses

For More Information:

www.FinAid.com

www.fafsa.ed.gov

- Nancy Dunnan