Understanding the FAFSA ( Free Application for Federal Student Aid )

What is the FAFSA? It is the acronym for "Free Application for Federal Student Aid". Most colleges and universities require that all students applying for any kind of financial aid complete one every year. The information you put on the FAFSA is entered into a formula called the Federal Need Analysis Methodology (or just " federal methodology" for short), which measures the financial strength of your family unit. There are actually three different formulas. One is for dependent students, and two are for independent students (one for students with dependents other than a spouse, and another for students who have no dependants other than a spouse). The central processing system (CPS) uses the formulas to calculate that is called an "expected family contribution" (or EFC) for each applicant. This is the amount of money that the federal government determines your family should pay toward your education.

An applicant's expected family contribution, or EFC, is a determination made with federal methodology, of the amount of money that the family unit should be expected to contribute toward the higher education of the student. It is not necessarily, what you pay. This expected amount gives financial and administrators a figure to work with when determining your aid. You may actually end up paying more or less than the calculated EFC. This EFC formula has two parts, the parents' portion and the student's portion.

The parent portion of the EFC is based on the parents' adjusted available income and a portion of the parents' assets. The student's portion of the FAFSA, though often times lower, is of substantial importance. The student's available income is determined by taking his or her total income (both taxed and untaxed), and then subtracting certain allowances. Some of the income protection allowances for figuring out the student's portion are different from those that those that are made for the parents.

On the FAFSA, investments do not include your principal place of residence, the value of life insurance policies, retirement plans, pre-paid tuition plans, and checking account balances reported in other questions. One of the most crucial elements on the FAFSA form is the amount of the student's and parents' income and assets. Be as accurate as you possibly can in your estimations. You are obligated to give actual amounts, or the most accurate estimation, if actual amounts are not available.
Some of the key items on the FAFSA that are taken into consideration include the following: both the student's and the parent's income and assets, the number of people in the household, and number of people in the household, and the number of students in the household who will be attending college in the upcoming year. The FAFSA does not take into consideration any special financial circumstances of the individual family unit. Extraordinary medical expenses or one or both parents recent loss of job would be examples of this. If there is anything about your family's situation that you think might be considered as a special circumstance by institution administrators, it might be a good idea for to write a letter explaining your situation and send a copy of it to every school's financial aid office.

You can either complete the FAFSA on paper (and send it by mail), or you can speed things up by filling it out online. The online application is often a much better version option than dealing with the paper version. Both you and the schools that you list on the form will receive your results much sooner, and there is a greatly reduced chance for making errors. If you use the online version, you have a couple of different options for seizing the form You can print the signature page, sign it in pen, and mail it in (again, mail slows the process), or you can sign electronically, using a personal identification number (PIN). Getting a PIN and doing the online not only does it speed up your FAFSA results, but you can also use the PIN, for other important things, such as accessing the National Student Loan Data system to view a history of your student loans. Theoretically, a college student could get a PIN now and, in about twenty-five years, when he has a child of college age, use the same PIN to sign as the parent on his child's FAFSA.

The federal deadline for filing the FAFSA is not until June 30 the year after your college attendance begins. However, if you want to be considered for all types of aid, you need to fill out the form. much sooner . Remember that this one form is used by many different entities to consider you for aid. To be considered for state grants, you have to complete the FAFASA by the state's deadline, and the institution's deadline for completing the FAFSA is probably much earlier than the state's. Most colleges these days has a FAFSA filing deadline that lies somewhere between February 15 and March 15 before the year of academic attendance.