January Financial Aid Action Plan

Wow! Can you believe you are already halfway through your senior year? Has it even crossed your mind that in just seven months you will be starting college? That is not too far away. Although it may seem like you have done everything you can possibly think of to prepare yourself, you are not done just yet. This month is all about financial aid! You will be submitting the FAFSA, PROFILE, and other financial aid documents. You will also be checking on your scholarships status and college application status. This edition also contains information on loans, which are another very important facet of financial aid.

Did you get an early start last month and begin filling out the printed FAFSA?  If so, you are ahead.  If not, you need to get to work and get caught up. Either way, it is time to get this done! Go to www.fasfa.financialaidtips.com and click on the “Fill Out My FAFSA” link. Since it is now after January 1^st, you may sign and submit your FAFSA online. However, we recommend that you and your parents file a tax return before submitting the FAFSA. Filing a tax return does not affect your award in any way but having the information helps you get organized and ensures your answers are accurate. If your parents have not yet filed a tax return, do not stress out. You can use your parent’s W-2 forms for the information you need. The earlier you fill out your FAFSA, the greater your chances are of receiving financial assistance from a wider variety of sources. Awards start being given out now, and you don’t want to miss them.

Make sure you have the PIN number you and your parents applied for a couple of months ago. You will need it in order to sign into your account. You will also be using your PIN number to electronically “sign” your FAFSA before submitting it. Keep in mind you will always need your PIN number to access your information regarding the FAFSA. Make a note of the PIN  and save it even after you have completed the application because you will need it every year you file for financial aid.

When you begin filling out the FAFSA, you will be asked a number of questions about general information, financial information, and school information. When you are finished filling it out and are ready to submit it, the website will bring up a page that contains all the information you have entered, so double check all of your answers. DO NOT click “continue” on this page until you have double checked your information! Although this may seem time consuming, remind yourself that this is the most important document in applying for financial aid. Make sure your information is accurate to the best of your knowledge.

Once you have completed the FAFSA, double check the colleges you have applied to and make sure that you have not missed any school-specific financial aid applications. Although all colleges recognize the FAFSA, some have their own financial aid applications and award school aid to students who have financial need. If you are unsure whether there is a separate school-specific financial aid application along with the FAFSA, call the school financial aid department and ask if there are any additional applications you need to submit.

You may receive a notice that one of the schools or scholarships to which you are applying requires further financial information as part of an Institutional Documentation Service (IDOC) program. The IDOC is a program offered through the College Board and is used by some colleges and scholarships. You will be asked to submit financial documentation such as federal tax returns, and the College Board will send that information over to the participating school. If you get a notice that documents are required, be sure to send them as promptly.

Last month, you received information on grants. This month, you will be learning about loans. Loans are unlike scholarships and grants since they must be paid back in full, plus interest. There are numerous options to apply for loans. Federal loans, such as the Stafford or Perkins loan, may be applied for by the student or student’s parents. If you decide to apply for a federal loan yourself, the maximum amount you can receive is limited. However, you will not have to make any payments while you are enrolled in school at least half-time (generally 6 hours per semester). If you drop below half-time or you graduate, you are given a six month grace period before you are required to begin paying back the loan. Loans applied for by a parent have a much larger maximum amount. However, payments start immediately.

Federal loans are a wise choice because they have a lower interest rate than private loans. Federal loans may be automatically offered to you in your FAFSA award, and you can choose to accept them or not. The loan is first given to your school’s Financial Aid office.  They may either apply the loan to your costs or give the funds to you.  If you receive a large amount of other financial aid, then part of the loan may be refunded to you, and you can use this money to pay for any other school-related expenses. This can be very helpful on housing, books or other expenses not covered in other ways.

Private loans are generally used to cover any gaps in financial aid which grants and scholarships do not. These loans work in a similar way as federal loans. Private loans have higher maximum amounts and higher interest rates, too. You can choose to defer payments or begin making the payments immediately. Because private loans are higher amounts, they may be used for a wide variety of school-related expenses. These expenses can include room and board, technology (new laptop anyone?), books, etc. Private loans may be applied for through your bank or through companies that provides specifically for students and parents.  Many lenders have either stopped making student loans or are considering ending their programs, so be careful. We recommend at least applying at www.loans.financialaidtips.com. Make sure you review all loan options with your parents so they can help you make that financial decision.

In summary, after January, most of your financial aid preparation is done. Remember this month you need to:

o   Keep applying for scholarships

o   Fill out and submit your FAFSA application

o   Research  school-specific financial aid options

o   Begin the process of evaluating loans to cover remaining costs

In the coming months, you will be receiving your acceptance letters and making important decisions!

If you missed any of our previous Monthly Financial Aid Action Plan newsletters, you can find them here:

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