10 Ways to Fail the FAFSA

You may have already submitted your Free Application for Federal Student Aid (FAFSA) -- and if not, you really should -- but have you reviewed your submission to make sure that it is free from errors? One out of every seven FAFSAs contain a mistake which can delay processing and may even result in your form being returned.

Now that your eyes are fresh and you don't have to focus on the nitty gritty numbers, return to the FAFSA website to review your form. You have until September 22 to submit any corrections. To help you, fellow college guide College Tidbits published 10 common errors students make:

  1. Leaving fields blank - Many students skip fields when the answer is zero or if the question is inapplicable. Do not do this. Instead, write in a zero. A blank response will be interpreted as a mistaken omission.
  2. Using W-2 information for income - The FAFSA requires the information that is found on the 1040 federal tax return (or 1040A or 1040EZ forms), not the W-2. Make sure that you and your parents have entered this information correctly. If you or your parents have not filed taxes this year yet, you may estimate the values and then submit a correction later.
  3. Forgetting to report all income - Things like Social Security, child support, and Aid to Dependent Children (ADC) income sources are often neglected. Some scholarships will also need to be reported. Don't forget about other assets like bank accounts, stock portfolios, or retirement accounts either.
  4. Neglecting to sign the application - This is one of the big mistakes that will result in having your form returned. If you're a dependent (even if you're living away from home and even if your parents don't fund your college education in any way), both you and your parents must sign the FAFSA. If you file online, you may use your PINs. Your parents should have received a PIN as well.
  5. Waiting on your parents - You may be great about getting your taxes done on time, but many adults will get as close to April 17th as they possibly can before filing. If your parents are one of these types of people, don't wait for their taxes before submitting your FAFSA. Always make your best guess for now and correct it later.
  6. Filing late - The priority deadline has already passed, and so have a few state deadlines. It's not too late to file your FAFSA if you have not done so already, but aim to get it done as close to the January 1st opening as possible.
  7. Forgetting to file every year - Many students forget that the FAFSA has to be completed and submitted for every year you plan to be a student. Doing it once is not enough.
  8. Read more tips at College Tidbits.

If you have questions, consult the FAFSA's FAQ section on their web site, or call the Federal Student Aid Information Center at 1-800-4-FED AID (1-800-433-3243).

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Three Days Until FAFSA Financial Aid Priority Deadline!

If you want to receive financial aid during the 2008-09 college year and have not yet filed you FAFSA (Free Application for Federal Student Aid), do it today. March 3 is the deadline for priority consideration, and you definitely want to meet this mark. While your aid application may still be submitted after March (and all the way until June 30), you will need to file before this priority deadline to increase your likelihood of receiving maximum consideration for all sources of aid.

Also note that many states have March state-specific deadlines including: California, Idaho, Indiana, Kentucky, Maryland, Michigan, Mississippi, Montana, North Carolina, North Dakota, Rhode Island, Tennessee, West Virginia, and others (consult the official FAFSA website for state filing deadlines).

Leap-year may have bought you an extra day, but take this weekend to complete and submit your FAFSA online if you have not done so already. Even if you are waiting for information like your W-2s, your parents' W-2s, or other financial or tax information, you should fill out the FAFSA with your best guesses and then submit a correction later.

Last year, an estimated 2 million students who lost out on free money. Don't make that same mistake. Begin filling out your application at http://www.fafsa.ed.gov.

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Can I Take a Year Off Before College?

A 'gap years' or 'bridge year' both refer to the increasingly common choice to take a year off before going to college. What once was the realm for slacker, drifter teenagers has now become a viable option for almost any student. As such, I can reply to the titular question with a resounding 'yes'.

In a new article, I explore the types of students that benefit most from taking a year off, and also explain several possible activities for the gap year. If your parents are averse to the idea, make sure to read it with them.

Full article here: The 'Gap Year': When It's a Good Idea to Take a Year Off Before Starting College.

Financial Aid Consultants: Spending Money to Make Money?

I discussed the dangers of personal statement coaches on Saturday, and I'd like to address a similar topic today. I am always skeptical of any type of 'college admissions coach', and financial aid consultants strike me as even more suspicious. While other consultants offer a benefit that is rather unquantifiable (there's no specific dollar value of a 2200 SAT score or Harvard admission, for example), financial aid coaches offer money for money. On a simple analysis, if you earn more in financial aid than you pay the coach, you come out ahead. On the other hand, if you pay more than you earn, you have lost money with no other material benefit.

Thus, I am wary when I see steep fees charged for these consultants. Ivywise, a New York-based firm, in particular receives a lot of criticism for their programs. At roughly $650 an hour, I have wondered if their financial aid coaches can actually get you that much money back.

My suspicions grew when I read Ivywise's February 2008 newsletter which featured an article written by financial aid counselor Rod Bugarin, in which he says: "government loans for parents (called PLUS loans) have a relatively low interest rate (currently 6.1%)."

While this piece of information would be correct for students borrowing in the 2005-2006 aid year, PLUS loans have been fixed at 8.5% since July 1, 2006. Mr. Burgarin who presumably also charges the approximately $650/hour fee of Ivywise is relying on information almost two years old to give financial aid advice. This worries me.

In fairness, I e-mailed Mr. Burgarin last week about the error and he had this to say:

[T]hanks for letting me know. I[']ll make changes on monday. I should[']ve double checked the interest rate before publishing the article. As this article was in a two part series, I[']ll let readers know in next month[']s edition. Thank you.

Though it is now Tuesday and the error persists, I am glad to see him acknowledge the mistake and endeavor to correct it. But should I, a small, independent purveyor of free advice really be correcting the errors of a career financial aid consultant who charges hundreds of dollars per hour for his service? Ivywise's most expensive package runs for over $32,000, and patrons could potentially be paying for damaging advice. Industry experts earning salaries for their services should know better.

I do not mean to criticize any one program or company. Instead, I would like to remind students and parents that there are options available outside of high-priced consultants. Much of the advice they offer is available free at many places on the Internet, including this site. The industry of college admissions consulting is one in which more the expensive services are not necessarily better.

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Could Rising Interest Rates on Student Loans Actually Be a Good Thing?

I've blogged previously about private student loans and why they tend to be a bad choice (see the final point on my article about comparing forms of financial aid). Federal loans with their lower interest rates are almost always a better option than the high-interest, often restrictive private alternatives. But the current sub-prime mortgage crisis and recent Federal legislation have meant that even if students avoid private loans, they are still getting hit with the effects of a tanking economy. As John at Free College Blog points out, the credit crunch is having far-reaching effects:

[T]he recent legislative reform drastically reduces the amount of income [student lenders] are able to generate. To make up the difference, lenders are: raising rates on private loans; denying loans to students with low credit scores; or getting out of the [Federal] subsidized loan business all together.

One of the biggest advantages of Stafford and Perkins loans, and also graduate PLUS loans, is that none used to require a credit check. But with students as such big credit risks, and with lenders losing money on defaulted loans, banks are becoming more reluctant to deal with students as openly as they have in the past. This is troublesome for everyone.

Perhaps, though, the news isn't entirely dire. John goes on to make another excellent point:

In the long run, this could be helpful for tuition costs as more schools figure out business models that allow them to admit students without necessarily needing loans to pay for it.

Surely we should be cautious in praising soaring interest rates, but this point is a good one. As the cost of education continues to increase exponentially and as graduate debt follows its own upward path, colleges will soon have no choice but to dip into their endowments to make their programs more accessible. We're looking at a lot of trouble in the short-term, but there may be light at the end of the tunnel after all.

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Why (and How!) to Take Control of your Online Presence

Did you know that college admissions officers actually check MySpace, Facebook, and Google? What was long just a myth designed to scare students has now become reality in a new Web-driven era.

Learn their search strategies and how they find you online, and tips to make sure that what they find helps rather than hurts you by reading my newest article on how (and why) to take control of your online presence.

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