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Y's Ways to Fiscal Fitness
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Personal Financial Planning
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 If
your savings and investments don't cover the full costs of college, you're
not alone. Over half of the college students in the US need help paying
for their education. Fortunately, the government and the schools offer
financial aid packages based on need.
To qualify, you need to fill out the Free Application for Federal Student
Aid (FAFSA). The form is now available online at www.fafsa.ed.gov.
The government uses the FAFSA to determine your Expected Family Contribution
(EFC) — how much your family can pay. Each school that offers you
aid then creates a financial aid package to make up the difference between
your EFC and some or all of the cost of attending that school.
Aid could mean loans, scholarships, grants, or a combination of all three.
Schools with greater financial resources can offer more aid, though if
many students need aid, there could be less to go around. It’s also
true that if a school is especially interested in a particular student
because he or she has a special skill or adds diversity to the student
body, it may offer an attractive aid package as incentive.
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APPLYING FOR AID
The federal government considers parents responsible for paying for their
children's education. However, if a student will be 24 or older, the parents'
income doesn't count in figuring eligibility for financial aid. Some younger
students can prove their financial independence, but there are strict
federal guidelines that define dependency. Of course, any school may consider
additional evidence for a particular student, and if the circumstances
are extraordinary, the school may make an exception.
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WHO'S A PARENT?
The student must provide information about everyone who counts as
a parent on the FAFSA. But who counts?
 If
both parents are living and married to each other: both parents
If a single parent never married: the single parent
If a widowed parent never remarried: the single parent
If a widowed parent has remarried: the parent and the parent's
spouse
If parents are divorced: the parent with whom the student spent
the most time in the past year
If time was split evenly between both divorced parents: the
parent who provided the most financial support
If the divorced parent who meets the above criteria has remarried:
also that divorced parent's spouse
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The FAFSA is a thorough inquiry into your family's ability to pay. To
fill it out, you'll need documents about the family's income, such as
W-2 forms and income tax returns, and documents about assets, such as
bank statements and investment information. The government also takes
into account your family expenses, how many in your family are attending
college at the same time, and any extraordinary financial circumstances
you explain on the form.
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WHEN IS THE FAFSA DUE?
Although the federal deadline is June 30 the year of enrollment,
individual states and colleges also use the FAFSA to distribute
financial aid. Their deadlines generally occur earlier in the year.
Check with the school and state for specific dates. With many colleges,
you can still apply for aid if you miss the deadline, but what you
get depends on what's left.
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OUTSIDE LINKS
www.fafsa.ed.gov
You can fill out the Free Application for Federal Student Aid online.
The site tells you what information you’ll need before you apply
and answers frequently asked questions.
www.ed.gov
The website for the Department of Education includes links to information
on traditional financial aid and legal and tax information for students.
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