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How Gifts Can Effect Your FAFSA

Graduation is approaching for many students and relatives are trying to figure out the best gifts to hand out. You’d probably assume that money would be the most economically smart thing to ask for. You’re definitely going to need the extra cash, what with all the expenses that come with going to college, making new friends, eating out, etc. But wait! Receiving money as a gift may effect how much money the federal government is willing to give you.

Now, a gift of $10 from your 2nd cousin will not do any damage, but if you know someone who is planning on giving you a substantial monetary gift, you may want to ask them for something else. Rick Darvis, co-founder of the National Institute of Certified College Planners in Plentywood, Mont. warns that "A cash gift from (anyone) other than a parent is reported as income on the (federal) financial aid form," says Darvis. "(Student) income is assessed at a 50% rate. That means that a gift of $10,000 could potentially cost $5,000 in financial aid." Your FAFSA has a section dedicated to such gifts. This section is called “student’s untaxed income.” This part wants to know the amount of "Money received, or paid on your behalf (e.g., bills), not reported elsewhere on this form." This includes any money you’ve received from grandma and grandpa, your mom or dad who doesn’t have custody of you, and any family friend. Any cas you receive subtracts fifty cents on the dollar from your need-based federal aid.

By-passing the FAFSA trouble and going straight to the college wont help either. If the college/university was planning on awarding you a $10,000 grant, but they see that you have $10,000 coming in, they’ll take your grant away.

Read next time for Part 2

"The Five-Minute FAFSA"

The folks behind the YouTube channel FastWebContent have made a six minute video to help you file your FAFSA. If you ave any trepidation, you should definitely use this video as a tool!

FAFSA Test Runs

At this point, if you haven't already filed the FAFSA, you may just think of it as a big headache. However, you don't have to rush through it! You can do a test run of FAFSA on the Web by going to www.studentaid.gov and then to the FAFSA demonstration site. This is a good idea, as you will get a preview of the documentation that you (and your parents) will need to complete the form, such as annual tax return, earnings records, Social Security numbers, and so on, and of the amount of time you'll need to fill in the form.

TIP: You may not be done with financial aid forms even after you complete FAFSA. Sometimes, colleges may require additional information and will ask you to complete their own forms or the College Scholarship Service (CSS) PROFILE (www.fafsa.com/profile.htm), another widely used form to help determine eligibility for financial aid. Scholarships often have their own special application forms.

It doesn't cost you anything but time (and some aggravation) to make the FAFSA application. Help in completing the form is available from your high school, the college financial aid office (which often has workshops for parents and students, sometimes at your local high school), and as well as online at www.fafsa.ed.gov.

Help For Fafsa

Want help? You don’t have to simply accept the aid that is offered, according to Reecy Aresty of PayLessForCollege.com, who specializes in helping you gently negotiate a higher award of money that does not have to be repaid.

Arresty offers a free review of financial aid packages to my readers. If you hire him to negotiate on your behalf, the fee ranges from $195 to $395, depending on the number of schools involved. You can e-mail him at Reecy@PayLessforCollege.com.

Says Aresty: “Although May 1 is the deadline for non-refundable deposits at many schools, some families opt to make multiple deposits in order to keep the aid appeals process going beyond May 1.” Aresty notes that if the aid offers are close, it may be worth losing a deposit at one school to gain more grants of money at another.

Signing on for a financial aid package is one of the largest financial decisions any family can make, so do your research and don’t just look at the bottom line. Like your home mortgage, you expect to repay this loan over the years, while the value of the asset — your home or your education— grows over the years. As we’ve all learned, that’s a good idea over the long run — but the payments can be a huge burden over the short run

College tips: stay in state, search for best financial aid package [ChiSunTimes]

FAFSA for Adults

Although 18 is technically when someone is ushered into adulthood, we all know that most 18 year-olds are anything but adults. Not only have they not gone into the world on their own, but they are not financially independent. This means they have to file the FAFSA with their parent’s tax information and can receive loans easily with a co-signer. However, teenagers are not the only ones applying to college nowadays. With the economy forcing people into unemployment and eliminating many entry level jobs, more and more adults 25 years and older are applying to college. In fact, in 2008 these applicants were up 18 percent from the year 2000, according to the National Center for Education Statistics.

If you were one of these lucky men and women, you still have the opportunity to file the FAFSA and get all the free money you can for your new college career. Not only does the FAFSA determine your eligibility for government-subsidized or government-sponsored financial aid, other need-based grants and scholarships might ask for your FAFSA, too.

The form doesn’t require information on your debt or mortgage, a factor that may scare some adult filers away. Also, adult students can call the financial aid office and request a “special circumstances” form.  This form allows the school to amend your FAFSA form in a way that might get you more aid. For example the aid office can make an adjustment if your income is likely to be lower than what you had to report because you or your spouse lost a job or your unemployment benefits are about to run out. It will also take into account unusual and sudden increases in expenses, say a temporary increase in medical bills or a child starting private school. Also if your circumstances change while attending, you can revisit the student aid office and they may be able to help you receive more aid.

What is the Pell Grant?

Although the critical March 2nd deadline for the FAFSA has come and gone, you can still file yours and receive one very important grant.

The Pell Grant, originally known as the Basic Educational Opportunity Grant, is for students with financial need who have not earned their first bachelor's degree. The only way to get this grant is through filing the FAFSA. The Pell Grant is sponsored by the US Department of Education, They use the financial information reported on the FAFSA to determine the student's financial need.

The Pell Grant was originally created for students who were financially unable to obtain higher education, therefore students receive the grant on a need-based criteria. You also must be a US citizen with a high school diploma or equivalent.

Last year, the maximum amount you could receive for the the Pell Grant was $5,500. The amount you actually receive depends on many factors including cost of attendance and whether or not you plan on being a full or part-time student.

Don't miss your opportunity, file the FAFSA today!

FAFSA Filings Rise as Economy Slumps

The effects of the recession are becoming more and more apparent. One of those signs is the number of students filing the Free Application for Federal Student Aid. The Columbus Dispatch reports that Ohio State alone saw 10,600 more filings and estimated a million more nationwide.

Diane Stemper, OSU’s director of student financial aid, believes there are many factors contributing to the 22 percent increase, but the recession is still the biggest cause. "Many people who used to have the resources to send their children to college have lost their jobs or been downsized," Stemper said. "Declining home and stock values, coupled with rising food and gas prices, are also taking a toll."

Six out of ten students today are taking out loans to help with the cost of college, meaning more graduates with hundreds of thousands of dollars in debt to pay off. The FAFSA is one way to curb the growing number of loans.

Colleges see spike in student-aid requests [The Columbus Dispatch]

Why Everyone Should Apply For Financial Aid

There’s still time to fill out a FAFSA form to get money for college! At this point in the game, some of you may have given up, surrendering to the rapidly growing costs of college. You may even believe you and/or your family can handle the price tag. Why go through the trouble when there’s a chance you won’t get any money at all?

There is only one guaranteed scenario in all this confusion: If you do not apply for any financial aid you will not get any money. Even if you can afford tuition, you will probably need help paying for the dorms, food, books, etc. It all starts adding up!

Most colleges accept students using a “need-blind” process. This means they cannot use your financial situation as criteria for your acceptance. It also means there really is no reason to put off finishing your FAFSA. You’ve put in all the hours getting in, why not do a little more work to go comfortably?

To find out deadlines for your state visit the FAFSA website.

Facebook App Pledges to Help You Find Scholarships

Whether you’re looking for financial aid for college for the first time or you’ve done it for the past four years, the process can seem daunting. Trying to get as much money as you can as the deadlines fly by is frustrating and unfair when all you want to do is go to school. Well, the people at Facebook have heard your cries and are planning to launch an app to help by January, 2012.

Connect Fund will use demographic information provided by the Facebook user to recommend financial aid options including grants, student loans, and the Free Applications For Federal Student Aid, better known as FAFSA. In addition, as with many popular Facebook apps, users will have the option to share their experience with their Facebook friends.

According to the Huffington Post, the application was developed by Devin Valencia, a 24 year old graduate of The University of Nevada, Las Vegas, for the “Get Schooled College Affordability Challenge.” Valencia received $10,000 in prize money for her idea.

MTV, the College Board and the Bill and Melinda Gates Foundation have pledged $100,000 towards getting the app up and running by the January deadline. Hopefully, finding money for college will soon be as easy as playing Farmville.

Financial Aid Facebook App? Program Promises to Help You Find Money For College [HuffPost]