Applying For Student Financial Aid? Some Tips

For college-bound high school seniors looking to enter higher education in September, the deadline to apply for federal student aid is looming – forms should be submitted within the first two weeks of January 2011.

Kimber Decker doled out this tip, along with many others, to more than 70 parents filling Cranford High School's auditorium Tuesday night at a financial aid seminar sponsored by the guidance department.

 Decker is Regional Director of Nelnet Partner Solutions, an education loan service. Using a video screen and microfiche machine, he guided parents through each question on a nine-page federal form, known as the Free Application for Federal Student Aid (FAFSA), which is used to determine the amount of government-issued loan amounts, grants and work-study funding a child can receive.

For question 28, which asks if the student will have his or her bachelor's degree before July 1, 2011, he recommends checking 'No.'  

"If you put yes, your child will not be able to get a grant," he explains.

Decker also recommended that students answer 'Yes' for questions that ask about receiving work-study, even for those students not currently considering the option.

"It's better to see if your child qualifies," he added. "Funding might not be available. If you answer 'No' it may be harder to get it if you change your mind."

For one section of the questionaire that asks students and parents to list financial assets, audience members asked Decker which ones qualify.

"Anything that you would be penalized for if you took it out, would not be considered an asset," he explained.

On the form, students and parents also must list the net worth of their investments.

That includes money market accounts, bonds, stock options, mutual funds, certificates of deposit and real estate, Decker said. He also warned that parents should not list the home in which they or their child currently resides. 

"People should remember that IRA's and 401K's are not investments so they should not be included," Decker added. 

  Parents should keep in mind that the FASFA requires that they calculate their estimated income for the 2010 tax season. To do that, Decker suggested referring to last year's return if the income status hasn't changed.

Before filling out the form, both parent and student must obtain a pin number, which is used to sign the form electronically. Decker also noted that parents should fill out the worksheet for 2011-2012 before filling out the FASFA application. Information about it can be found on the FASFA Web site, www.fasfa.com.

Parents need not panic if they make an error or need to change any financial information. Once parents receive the SAR (Student Aid Report), they can always go back on to the FASFA Web site and make changes, he said. Once parents obtain a copy of the SAR, they should submit a copy to every school to which their child is applying.

At the close of his presentation, Decker outlined several key loans that he said parents should consider.

One is the Federal Pell Grant, which offers students a max of $5,500 per school year. The Federal Perkins Loan, which has a fixed rate of 5 percent, gives undergrad students up to $3,000 annually. Parents and students should also seek information about the Federal Stafford Loan, the NJ Class Loan and the Federal Supplemental Educational Opportunity Grant (FSEOG).

Decker offered several Web sites for more information about scholarships, schools and programs: 

Peterson's, a site providing comprehensive information on colleges: www.petersons.com; 

College Board, a site providing planning tools for students researching colleges: www.collegeboard.com;

Fastweb, which provides specific information about grants and loans: www.fastweb.com;

Hesaa, a site also devoted specifically to financial aid: www.hesaa.org.