You have to study college financial aid business to learn what the right moves are, and then make the right moves at the right time.

You need to be proactive and assertive. The money does not go to the people who necessarily need it, it goes to the people who know how to navigate the system.

When your kids are 12 to 14 years old, you should begin assessing your chances of getting need-based financial aid.

It is too early to fill out the Free Application for Federal Student Aid (FAFSA) form. The earliest you can do that is January 1st of your child’s senior year in high school. But the FAFSA form can be drafted and start getting an idea what types of financial aid might be available.

Do not let seemingly hefty income or considerable assets dissuade you from seeking aid.

Freshman Year

• Freshman grades are a permanent part of the grade-point average at four-year high schools.

• Your future college student should be working on earning the best grades possible, taking the toughest courses in the most rigorous setting.

• Meet a high school guidance counselor and select courses that meet college admissions requirements.

• Get the students involved in extracurricular activities; show an interest in activities and people.

Sophomore Year

• Now is the time to focus on your financial situation and do some serious planning.

• You should consider shifting money to where you want it to be on January 1 of your child’s Junior year in high school.

• Register for the SAT and/or ACT test just to stay ahead of the game, and then take a practice test on SAT.

• Talk to your guidance counselor about the student's SAT and/or ACT scores and next steps.

• For Athletes, prepare to meet the NCAA requirements for competition.

Junior Year

• Register and take the PSAT – a good score may qualify the student for scholarship programs.

• Talk to the guidance counselor about your student's PSAT scores.

• Start researching on grants , scholarships , loans , and work-study programs.

• Have you and your student make a list of colleges he/she would like to know more about and discuss with your student's guidance counselor.

• Visit colleges, and attend college & career fairs.

• Register for the ACT, SAT and/or SAT II Subject Tests, and then take the tests.

• Apply for Cal Grants and other financial aids.

Senior Year

• Visit colleges and attend college fairs.

• Complete admission applications and essays.

• File FAFSA and have your official high school academic transcript sent to your college picks.

• Also have your student's official test scores sent to your student's college picks.

• Complete the FAFSA as soon as possible after January 1st.

• Review your Student Aid Report (SAR).

• Review acceptances and financial aid offers.

• By May 1st, make final decisions, notify schools, and submit any necessary documents or deposits.

FREE APPLICATION FOR
FEDERAL STUDENT AID (FAFSA) TIPS

Free Application for Federal Student Aid (FAFSA) form used to calculate the Federal Methodology EFC and is used by all accredited colleges.

The filing deadline for their form is June 30, 2007 for the 2007-2008 college year for federal financial aid fund. Colleges may establish their own deadline for filing this form for their financial aid funds.

The FAFSA cannot be filed before January 1, 2007 (The student's senior year).

The FAFSA form allows the student to list up to six colleges where the FAFSA information is to be sent. When the colleges receive this information, they see what other colleges the student has applied to for financial aid.

The student should include colleges on the list that will create competition among the colleges for the student. (This should be done regardless if the student is not considering attending those colleges).

Student Eligibility

To receive aid from the federal student aid programs the student must:

1. Show financial need – the student must have financial need, except for some loan programs.

2. Have a High School Diploma or equivalent.

3. Be enrolled in a College.

4. Be a U.S. Citizen or Eligible Non-citizen.

5. Have a valid Social Security Number.

6. Make satisfactory Academic Progress.

7. Certify the aid will be used for educational purposes.

8. Not be in default of a Federal Loan.

9. Be registered with selective service.

10. Not be convicted of possessing or selling illegal drugs.

College Financial Aid Deadlines

Many college’s financial aid deadlines are February 15th or before.

Because much financial aid is based on a first-come basis, the chances to receive financial aid increases by estimating the financial information on the application forms and later reporting the actual figures as corrections to the student aid report. (This is a very strong reason that the FAFSA forms must be completed accurately and on time) .

Student Aid Report

Receive and review the Student Aid Report (SAR) in four to six weeks (one to two weeks when electronically filed). After filing the FAFSA form, the student should receive the SAR form. The SAR form indicates the Student’s EFC on the upper right hand corner of the first page. Errors or estimated tax information must be immediately corrected or updated on this form and the form re-filed.

In order to increase the chance of receiving grants, which are limited in the amount available to students, a copy of SAR should be sent to the financial aid office with a request for a financial aid offer.

Verification of Information

Verification of the applicant information is required out of at least 30% of the financial aid application filed. If a student is picked for verification, there will be an asterisk accompanying the EFC amount on the SAR.

Award Letters

Receive and review the college’s award letters. The Award Letter states the amount of the financial aid and the types of financial aid offered to the student. A student may accept, deny, or appeal any part of an award letter.

Do not let a college pressure the student into accepting an award letter before the student has time to compare all aid award letters.

Appealing Financial Aid Award

Appeal Process:

When a college’s Award Letter does not meet the student's financial needs (either in the total amount of aid or in the type of aid), the student can appeal the award to the college.

If the student does appeal an Award Letter, the student should be specific in requesting additional funds. In the appeal letter, the student should ask the FAO (Financial Aid Officer) to exercise “Professional Judgment”. Bear in mind, Professional Judgment may only be made in special circumstances and only when the family provides adequate documentation of these special circumstances.

The “Golden rule of appeal" is that if the student does not appeal for additional financial aid, there is a 100% chance that the student will not receive a better financial aid award.

Grants & Scholarships

• Federal Pell Grants:
  
  A Federal Pell Grant ranges up to $4,000.00
  The EFC must be less than $3,800.00 to qualify for this grant.
  The minimum grant is $400.00 This is a need-based aid.
  
  
• Federal Supplemental Educational Opportunity Grants:
  
  A FSEOG (Federal Supplemental Educational Opportunity Grant) is a grant (priority given to Pell Grant recipients) ranging up to $4,000. This is a need-based aid.
  
  
• College Scholarships/Grants:
  
  College Scholarships are given to students with merit as well as need.
  
  
• State Grant:
  
  A State Grant is a grant given by a state.

College Loans

• Federal Subsidized Stafford Loan:

  Federal Subsidized Stafford Loans are variable rate, need-based loans ranging from $2,625 for college freshman, $3,500 for sophomores, and $5,500 for juniors and higher. The interest is paid (subsidized) by the federal government until six months after the student leaves college and the interest rate on the repayment is capped at 8.25%.

  These loans are in the student’s name and the student will be entitled to the student loan interest tax deduction.

• Federal Perkins Loans:

  Federal Perkins Loans are low interest need-based loans (the rate is fixed at 5%) ranging up to $4,000 per year. The interest is subsidized by the federal government until 6 months after the student leaves college.

  The college determines which students will receive the loan and the amount of the loan.

  These loans are in the student’s name and the student will be entitled to the student loan interest tax deduction.
  
  
• Federal PLUS Loans:

  Federal PLUS (Parents’ Loans for Under-Graduate Students) Loans are not need-based loans. The borrower pays the interest and repayment begins immediately.

  The interest rate on Federal PLUS loans is variable with the upper limit of 9%.
  
  

  If a parent is not credit worthy and cannot obtain a PLUS loan, the student can borrow an additional $4,000 per year in Unsubsidized Stafford loans for the first and second years of college and $5,000 for the third, fourth, and fifth years of college.

  PLUS Loans may be consolidated into one loan and repaid over a period of up to 30 years.

  

If the student will be attending a college that assesses home equity, a home equity loan maybe preferable to a Federal PLUS loan. The home equity loan will reduce the value of the home.

• Federal Unsubsidized Stafford Loans:

  Unsubsidized Stafford Loans are not need-based loans. If there is no financial need, the student can still receive an Unsubsidized Stafford loan. The student must file a financial aid application to receive this loan.
  
  

In a situation where a student does not qualify for need-based financial aid because the EFC is greater than the COA, it maybe more beneficial for the student to borrow using an Unsubsidized Stafford Loan rather than the parents borrowing on a PLUS loan. Where the student can get the interest deduction versus the parents on a PLUS loan.

Work-Study

• Federal Work-Study:

• Federal Work-Study is an 8-15 hour-a-week job at a minimum wage rate. The college administers this need-based program.

• College Work-Study:

  College Work-Study is a work program set up by the individual college and can be based on the need or the merit of the student.

• State Work-Study:

  State Work-Study is a work program set up by the individual states.

• Work-Study is Not Assessed:

  Need-based Work-Study is not assessed in the EFC formula.
  
  

  If a student is considering Work-Study employment versus off-campus employment, the student should factor in the fact that Work-Study will not affect financial aid eligibility.