You don't have to be a CPA to realize the cost of higher education is, well, higher. According to the nonprofit website FinAid!, tuition increases average between 6 and 9 percent each year. These rising costs have students across the country asking, "How am I going to pay for this?"
The first thing students should consider is federal financial aid. These programs exist to help students afford higher education. Many students and families fall prey to the myth that they won't qualify for help. In reality, there's only one way to find out what federal aid you can receive -- you have to apply.
What IS federal financial aid, exactly?
Federal financial aid is money for a student's educational expenses, paid through grant and loan programs by the federal government. Grants are not paid back. Loans are. Except for some loan programs, eligibility is based in part on need.
Who is eligible for financial aid?
Eligibility may vary across programs, but these are the minimum requirements. An aid recipient must be a U.S. citizen or eligible non-citizen; must have a social security card; must comply with Selective Service registration. The recipient must also be admitted or enrolled as a regular student in a degree-seeking program. To maintain eligibility, the student must maintain satisfactory academic progress.
When should I apply?
The deadline for financial aid applications may vary, depending on where you life and what college or university you plan to attend. Research your deadlines and apply as early as possible. High school students should apply in January or February of their senior year.
How do I apply?
The best way to apply for federal financial aid is online. You need to file the Free Application for Federal Student Aid, or FAFSA, through the Federal Student Aid website. To do this, you need to gather some basic information first. You and your parents both need to apply for a personal identification number from the Federal Student Aid PIN website. This PIN will be your secure digital signature. You also need to have your social security number and your most current tax returns. When you're ready, complete the FAFSA online. Include the school codes for any school you are interested in attending. That way, your FAFSA information will be sent directly to those schools. They will then determine your eligibility for local, state and institutional aid.
What happens after I submit the FAFSA?
In three to five days, you will receive an email and a link to your Student Aid Report, or SAR. Your SAR contains your expected family contribution, or EFC. This is the number used to determine your eligibility for financial aid. Using your FAFSA information and your EFC, the schools who received your SAR will prepare a financial aid package for you. If you have high need, your package may include grants and subsidized student loans.With subsidized loans, you don't have to pay interest on the money while you're in school. If you have less need, your package may include unsubsidized student or parent loans.
No matter where you think you fall on the need spectrum, federal financial aid can reduce your out-of-pocket costs. Prospective and current college students should file the FAFSA every year and take advantage of the grants and low-interest loans that help lower the cost of higher education.
Tips
The FAFSA is always free. Avoid websites or services that offer to help you file the FAFSA for a fee.
Keep your PIN secure. This is your digital signature and should never be shared with anyone.
If you need additional help, contact your high school counselor, or a financial aid adviser at your local community college or university. Many of these institutions offer free financial aid workshops.
Kelly Kuhlmann - Kelly Kuhlmann
