Monday, March 23, 2009

10 Things that College Financial Aid Offices Don't Tell You

posted by Shu Zheng

(Smart Money) 1. "You waited until April? Sorry, we gave your money away."At first glance, the amount of financial aid available to students seems like a gold mine. According to education testing and information organization The College Board, students received over $122 billion in aid last year for undergraduate and graduate study; more than $111 billion came from the federal government alone. Problem is, you'll need a treasure map to find your share. The bewildering aid-application process stumps thousands of families each year, leaving many to pay more tuition than they have to. Lots of students miss out on aid because of the confusing deadlines for the Free Application for Federal Student Aid (Fafsa), which everybody must complete to be considered for government grants and subsidized loans. The forms, which are available from colleges and at, are reviewed first by the government and then by your student's prospective school. While the deadline on the form is June 30, many schools' individual aid deadlines -- listed in the colleges' materials but not on the Fafsa forms -- are as early as February.

If you're the parent of a high school senior, keep a list of all the schools' different deadlines. To play it safe, though, apply for aid as soon as any admissions applications are in the mail -- as in now. "Families need to submit their financial aid info as soon as they can after Jan. 1 preceding the student's freshman year," says Barry Simmons, aid director at Virginia Tech. While the forms typically ask for the previous year's tax information -- a common reason parents postpone applying until April -- it's completely legit to estimate tax figures based on last year's return and update them later.

2. "Your error, your problem."If you fail to fill in some key parts of your Fafsa, the central processor will reject your form, sending it back to you and not to the prospective schools, resulting in a potentially costly delay. One error that parents make: putting their income and tax information in the student section or vice versa, which can't be fixed by the machine scanning the form. As a safeguard, Ohio State aid director Tally Hart recommends using the online form at; it will alert you if you leave questions blank and can even recognize some obvious errors, such as household income of $50,000 combined with a $5 million mortgage. Of course, there are many circumstances that can't be fully explained on a Fafsa form -- say, if a family member was recently laid off. In that case, officers recommend writing a letter to the aid office stating your family's financial situation and mailing it at the same time as your Fafsa. Just make sure the letter goes directly to the college. Too many people "send a letter with the Fafsa [to the government office], and it's just destroyed," says Mark Lindenmeyer, aid director at Loyola College in Maryland.

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