Many parents start thinking about financial aid for their kids right around the time college applications are being turned in. That's too late. Navigating the ins and outs of the Free Application for Federal Student Aid (FAFSA) a few years earlier can save a great deal of stress. It can also ensure that the current year's FAFSA funds won't have run dry by the time you apply.
Think of FAFSA as a gateway to many kinds of student aid. That application is used for federal aid like Pell grants and Stafford loans, as well as for state scholarships and many institutional awards. To get started with the FAFSA process, visit this site, which has a lot of info about various forms of aid, and is also where you would start an aid application. This tool provides you of an early preview of what level of aid you might expect.
To be considered for federal student aid for the 2019-2020 award year, you can complete a Free Application for Federal Student Aid (FAFSA) between October 1, 2018 and midnight Central Time, June 30, 2020. However, many states and colleges have earlier deadlines for applying for state and institutional financial aid.
Don’t focus too much on those deadlines. You should act earlier, because FAFSA funds can run out. A growing number of states have already warned that they now have less funds available than before. New York State has not yet issued such a warning just yet, but Albany appears to be headed towards belt-tightening in coming years.
In addition to state deadlines, applicants need to take note of school-specific deadlines for priority access to institutional aid. That includes scholarships, as well as work-study assignments that must go to students with demonstrated financial need—but not necessarily those with the absolute most need.
Open to (Almost) Everyone
Some parents wonder whether it is worthwhile to apply for need-based financial aid if they earn a high income; and parents tend to underestimate eligibility for need-based financial aid and to overestimate eligibility for merit-based aid.
Unless the parents earn more than $350,000 a year, have more than $1 million in reportable assets, and have only one child in college and that child is enrolled at an in-state public college, they should still file the FAFSA annually. Not doing so could leave money on the table.
The FAFSA is a prerequisite for unsubsidized federal Direct Stafford and federal PLUS loans. These loans are available without regard to demonstrated financial need. The federal Direct Stafford loan is a reasonable way for a student to have skin in the game, since a student is unlikely to graduate with excessive debt if they borrow using only federal Direct Stafford loans.
Lastly, there are a number of factors to consider when coordinating 529 education savings plans with financial aid. Let us know if we can help you navigate these complex issues.