The following is a guest article submitted by Mary Fallon from Student Aid Services.

Accuracy Counts

Federal aid applications are rejected by the federal government for errors from miscalculating adjusted gross income to not signing the form. Calculation mistakes can reduce an aid award even if an aid application isn’t rejected. For example, taxable income isn’t adjusted gross income. If parents have tapped into retirement funds, it should be added to either untaxed income or adjusted gross income, not both, or the Expected Family Contribution (EFC) will increase, and aid eligibility will decrease.

First-Come, First-Served

Those who file as close to January 1 as possible are in the best position to get all the aid they are eligible to receive. Using income estimates is allowed – even encouraged – and a student won’t lose their place in the virtual line by later updating the application with final income amounts.

Beat Deadlines

Most colleges and states have their own deadlines. The earliest deadline for the 2012-13 FAFSA is in four weeks – Feb 1, 2012. The longer a student waits, the more students get ahead of them.

Not All Assets Count

A primary residence, retirement plans, small family-owned businesses, and the cash value of life insurance don’t count as assets on the FAFSA. Some of the most common and costly mistakes are made by incorrectly reporting assets.

Dependency Surprises

Just because a student financially supports themselves, doesn’t mean they are independent under FAFSA rules. Many students are considered dependent until age 24 requiring parents’ income on their FAFSA. However, for children of divorced parents only the income of the parent with whom the child lived with the most during the past 12 months is counted.

Job Loss Relief

If a member of a household has had their job eliminated, a student may be eligible for more aid. Look for the ‘dislocated worker’ question and see if the family meets one of the four criteria. Dislocated workers’ assets are counted differently than others – typically helping reduce an EFC, which increases aid eligibility.

Double Check

Transposing numbers and mistyping are very common mistakes. Double check everything. There are hundreds of ways to make a mistake on a FAFSA. Having a professional check the answers can help ensure a student gets the most aid possible. Answer the FAFSA truthfully, accurately and completely.

Professional Help

While most high school counselors don’t have time or in-depth FAFSA knowledge to assist students, some communities host FAFSA-preparation events each winter. College financial aid officials may provide guidance to their students. Help from fee-based FAFSA preparation services is allowed, too. Some experts, such as Student Financial Aid Services, provide free or discounted services to low-income students and provide assistance in multiple languages.

Early Estimates in Minutes

Waiting for the spring arrival of aid award letters to learn a student’s aid eligibility and a college’s affordability is agony. Why wait? Check colleges’ Net Price Calculators (NPC) for an estimate of a full-time, first-time student’s aid eligibility and net price.  Advanced NPCs also estimate out-of-pocket cost and the total cost of a degree. The most reliable NPCs ask 30 to 40 questions, which takes about 10 minutes to answer. That’s insight into aid eligibility in the time it takes to make a sandwich. But remember, answering NPC questions, will not get a student their aid, preparing a FAFSA is required.

The FAFSA (Free Application For Federal Student Aid) is the gateway to all things good when it comes to making college affordable. The downside is that the FAFSA is feared by many, especially those that have never completed the process. This uncomfortable unknown factor is what keeps people from giving it a try and finding out what treasures it will unlock to enable them to obtain their educational goals. On a side note… check out this humorous article comparing the FAFSA to a colonoscopy.

In order to combat the ambiguity associated with the FAFSA, you can find great resources in books, on the web (like CheapScholar.org) and through various other sources. However, nothing compares with direct one-on-one advice/counseling and that is where College Goal Sunday helps to fill a void and provide assistance with completing the FAFSA.

College Goal Sunday is a program that was founded in 2001 in Indiana with support from the Lilly foundation and now has a presence across the nation in 44 states. The main mission for this program is to help college bound students and their families to meet up with various financial aid professionals from their respective states and complete the all-so-important FAFSA. Given the name of the program, you can probably guess right away which day of the week these helpful sessions are offered (Sunday!).

If you would like to learn more about College Goal Sunday you can visit their website here. If you are a student or family member in need of help with the FAFSA, this is great resource for some personal one-on-one assistance.

You can click here to find out when and where the next College Goal Sunday event is taking place in your area!

If you are going to College Goal Sunday to receive help with your FAFSA, please plan on bringing the following items to help speed up the process and ensure proper completion of your FAFSA application. (If you don’t go to College Goal Sunday, you still want to track down these items before you complete your FAFSA):

• Social Security Number (can be found on Social Security card)
• Driver’s license (if any)
• W-2 Forms for the previous year and other records of money earned
• Your (and your spouse’s, if you are married) most recent Federal Income Tax Return:
  • IRS Form 1040,
  • 1040A,
  • 1040EZ,
  • 1040Telefile,
  • foreign tax return, or
  • tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia.
• Parent’s Federal Income Tax Return for the previous year (if you are a dependent student as defined by federal criteria)
• Untaxed income records for the previous year:
  • Social Security,
  • Temporary Assistance to Needy Families,
  • welfare, or
  • veterans benefits.
• Current bank statements
• Current business and investment mortgage information, business and farm records, stock, bond, and other investment records
• Documentation that you are a U.S. permanent resident or other eligible non-citizen.

The following is a guest article provided by J. Randy Green, Director of Financial Aid at Wittenberg University

This morning, a local reporter called me with questions about student indebtedness.  She raised some interesting points on the recent changes made by the Department of Education to ease the repayment burden on federal loans.

For example, the new Income Based Repayment guidelines should not only reduce the financial stress imposed by education debt, but also allow graduates greater flexibility in selecting a job that best fits their skills and preferences.  Someone who will make a great teacher will now be more able to afford accepting that teaching position, rather than being forced to work in a different field for the higher pay it may provide.

But the reporter’s focus was on the level of indebtedness and how that has changed in recent years; this echoes many other stories I have read lately.   Having this focus risks ignoring two important facets of borrowing – the rate of defaults and the impact of borrowing on daily activity – and one looming challenge.

If a student borrows money to attend college, and after completing college is able to repay that money, then the system is working.  The student may choose to borrow more to attend a higher cost institution, or less to attend a lower cost one, but the decision is left to the student and the equation does not change.  A school should prepare a student to repay the loan taken to attend.  One measure of this relationship is the default rate, which is the percentage of students who default within a given period and which the Department tracks for every institution.

Independent of this, the amount a student borrows may impact other aspects of life – the ability to rent an apartment, to be offered a job at a bank, the rate of a car loan – but the most closely felt impact is on day-to-day bills and purchases.  A student shouldering a large monthly loan payment (large relative to monthly income) will be less likely to be able to afford the activity that drives the economy.

An item that has not been discussed recently is the fact that the interest rate charged to financially needy students is set to double on July 1, 2012.  Currently, subsidized Federal Direct Student Loans are made at 3.4%.  Unless Congress or the Department of Education takes action, these loans will carry a rate of 6.8% for 2012-2013 and beyond.  Regardless of debt level, this change will increase the repayment burden students already face, raising the risk of delinquency, default, and diverting borrower income from the economy and into the government’s coffers.

Given the tremendous level of attention given to the cost of education and the indebtedness of graduates, it seems appropriate for some discussion to occur about this pending increase in the cost of that borrowing.

Parents and students have to wait until January 1st before they can officially submit their FAFSA for the upcoming academic year (2012-2013). Very few actually submit the FAFSA on January 1st but I am guessing that there are always over achievers amongst us that make the process part of their New Year’s Eve tradition. A financial aid director friend of mine once shared his opinion on how the festivities probably take place for those that are on top of their FAFSA game: “Oh look the ball has dropped in Times Square. We should probably smooch because that is what everybody does. Ok, now lets go submit our FAFSA form!”.

You may not be like the families mentioned above, but for those that want to get a jump start on what to expect when filing the FAFSA, I am pleased to clue you in to the fact that a draft of the paper FAFSA for 2012-2013 is now available. You can access the PDF version here.

My hope is that none of you actually utilize the paper FAFSA to submit your information to the Department of Education. The paper version mentioned above is more for information purposes and provides some insight on what will be asked of you. I always recommend that you make use of the latest and greatest technology available at www.FAFSA.ED.gov to electronically submit your FAFSA. The Department of Education utilizes skip-logic technology to make sure you don’t answer redundant questions and they also provide a feature that allows you to import your tax information directly from the IRS (seems a little scary at first but definitely saves on time and limits mistakes).

I hope you find this information helpful. Remember, the FAFSA is the key to all things good when it comes to accessing financial aid to help pay for college. Make sure you designate time this coming year to get your FAFSA application completed. Your checkbook will thank you!

If you need additional help and/or guidance through the financial aid process,  please feel free to check out CheapScholar’s College Resource Page for more great information.

The Joint Select Committee on Deficit Reduction (aka The Super Committee) has until November 23 to come up with a plan to reduce the federal deficit. Certainly not an easy task… Unfortunately, federal student aid could be at the top of their list when it comes to cuts.

In an effort to help the Super Committee understand the importance of federal student aid and the role that it plays in college accessibility for our nation’s students, the Student Aid Alliance has started a petition in support of maintaining federal funding for student aid programs.

If you would like to help support this cause (which I hope you will), you can visit the online petition here. It only takes about 20 seconds to add your name to the list and as of the time of this blog post, it looks like you will be joining 92,940 people in a great cause.

Here is the actual wording of the petition:

Our nation sorely needs to power up its economic engine. Work force projections show that by 2018, there will be jobs for as many as 22 million new workers with college degrees, but on our current trajectory, we won’t make that goal—in fact we’ll miss it by 3 million workers.

Recent budget deals have already cut $30 billion from the student aid programs, sacrificing some students’ benefits to pay for others. States across the country are cutting higher education from their own budgets.

That’s why it’s more important than ever to preserve, protect and provide adequate funding for the core federal student aid programs—such as Pell Grants and student loan benefits. Together, these programs offer students an opportunity to acquire the knowledge and skills our nation demands for a strong recovery.

Tough budget decisions in DC have put pressure on all federal spending, but cutting student aid, a long-term investment in our nation’s future, doesn’t make sense.

I support protecting federal student aid. Keep college within reach for our nation’s students and families.

Click Here To Show Your Support Today!

The following is a guest article provided by J. Randy Green, Director of Financial Aid at Wittenberg University

Last summer I read an article about a famous doctor who found himself on the patient side of a medical procedure.   The procedure he was going through reminded me of a process we deal with in the world of financial aid.  My epiphany?  The FAFSA is the higher education equivalent of a colonoscopy.

When I shared this revelation with colleagues, I found they did not necessarily see the links between the two.   So, in an effort to defend my good name, I present:

The Top Ten Ways a FAFSA is Like a Colonoscopy

Number 10 — No one really likes to talk about it. Professionals attend training sessions on them with regularity and entire industries have arisen around them, but you will raise eyebrows if you welcome guests to your Super Bowl party with, “Come on in – Green Bay’s up by 3, my son qualifies for a Pell Grant, and my colon’s clean as a whistle!”

Number 9 – At some point in your life, you should go through it. Although you will probably complete your FAFSA before your first colonoscopy, experts recommend everyone go through them at the proper time.

Number 8 — Timing is important. A FAFSA should be filed after January 1 and before the deadline posted by the college or university.  Missing this window may mean missing an opportunity for college funding or even missing out on college altogether.  A recent study[i] recommends that colonoscopies be done at age 45 for men and 50 for women unless risk factors are present that would encourage earlier testing.  Having one too late may mean missing out on more than college.

Number 7 — You should do it even if you “know” you won’t find anything.  With the FAFSA, many people “know” they won’t qualify for financial aid, but I guarantee programs exist that provide scholarships or grants to FAFSA filers regardless of the results.  Not everyone qualifies, but if you don’t file a FAFSA, you certainly won’t.  With the colonoscopy, people who live right, eat right, and exercise right still need to have one.   Hopefully, the FAFSA process finds something for you and the colonoscopy doesn’t.

Number 6 — No one does it for fun.  Although there may be people out there with different ideas about this, I trust most of us could find more enjoyable ways to spend a few hours.

Number 5 – Product of the 60’s. Most higher education officials trace today’s popular financial aid programs to the Higher Education Act of 1965, which led to the eventual creation of the federal methodology formula and the FAFSA form.  The first colonoscopy procedures were done in 1969.[ii] Somehow, I don’t find this surprising.

Number 4 — Great effort has gone into making the experience as painless as possible.  For the FAFSA, there are professionals you can pay to help you, and there is a free event called College Goal Sunday in February to do the same.  The online process uses “skip logic” so that you only have to answer questions that pertain to your situation and results are available almost immediately.  Colonoscopy imaging has been greatly improved with smaller, flexible scopes and better imaging techniques.

Number 3 — Preparation is the key. In either case, if you don’t prepare properly, someone will have some crap to deal with.  With the FAFSA, preparation entails having access to the figures requested by the form (income, assets, identifying information).  It is helpful to have completed tax returns in hand or already filed when completing the FAFSA, but these may not be available by the school’s deadline (see number 8 above).  Preparation for a colonoscopy takes about three days, requiring strict adherence to the prescribed intake of food and fluids and other preparatory steps recommended by the physician.

Number 2 — Garbage in, garbage out.  To emphasize the importance of the preparation step: failure to prepare properly may have ramifications.  On the FAFSA, you will have to correct any information that turns out to be incorrect and you may be selected for “verification”, which is a little like an audit that the financial aid office staff will perform before they will release your grants or loans.  With the colonoscopy, you may have to go through all of those lengthy and involved preparation steps again, including giving up your fettuccini for three days of broth and juices.

Number 1 — We still have a ways to go. Virtual colonoscopy is currently being introduced and, while it still requires significant preparation, there is no need to sedate the patient with the new procedure.  The three-dimensional virtual colon created by the scan can be constructed in a few minutes, with the results available for analysis and interpretation at the doctor’s leisure.  With the FAFSA, increasing connectivity between federal agencies such as the Internal Revenue Service and the Department of Education may allow the application process to shorten to, perhaps, just identifying which colleges you are considering.

So in closing, as a sometimes humbling, potentially embarrassing, discomfiting but important procedure, the FAFSA is higher education’s colonoscopy.

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[i]McMillen, Matt. “Austrian Study Shows That Men Develop Cancer and Precancerous Growths Earlier Than Women”.  WebMD Health News. September 27, 2011.

[ii] American Journal of Gastroenterology. September 1989.

Summer marks a great time to be traveling on vacation, having cookouts with friends and family, and hanging out by the swimming pool. However, it is also the time of year when Fall billing statements are sent by colleges and universities around the country. I am sure if you had your choice of summer activities, paying your fall tuition bill would probably rank pretty low. But, before you put that tuition bill on the back-burner, it is important that you know the time frame that you may encounter if you are using private education loans to cover your college expenses.

Last year (February 14th to be exact), the Higher Education Opportunity Act implemented regulation Z which mandates that a series of disclosures be distributed to borrowers at key steps throughout the private education loan process. The underlying goal is to make sure students and families exhaust all of their federal loan options before moving forward with a private education loan. In addition, the disclosures serve as an educational tool to help borrowers fully understand the terms of their loan program.

There are multiple disclosures that you should encounter when applying for a private education loan:

• Loan Application and Solicitation Disclosure: Schools or lenders are required to provide general information about loan rates, fees, and terms and must also inform a prospective borrower of the potential availability of federal student loans and the interest rates for those loans, and where to locate additional information.
• Loan Approval Disclosure: When the school or lender approves the borrower’s application for a private education loan, they must give the borrower a transaction-specific disclosure, including information regarding the rate, fees and other terms of the loan including total repayment figures (very similar to the 1st disclosure). However, at this time, they must also notify the borrower that the rates and approval are good for 30-days. This allows the borrower time to shop-around… This disclosure is required for a first time loan as well as a private student loan consolidation.
• Self-Certification Form (Designed by the Department of Education): Must be completed by the borrower and collected by the lender/school prior to any private loan disbursement.
• Loan Consummation Disclosure: This, again, is very similar to the other disclosures already received by the borrower regarding terms and rates. The only additional piece of information that is provided is the 3-day right of refusal clause. Which means that funds can’t be disbursed to your college until after that Loan Consummation Disclosure is provided.

I am not sure what you think about all of these disclosures but it is starting to remind me of the paperwork that is required to be signed and initialled at a house closing. It could be very easy for your eyes to glaze over through this process but the disclosures do serve a purpose and the information provided on them is helpful when you are are trying to discern your total education loan indebtedness.

If you are getting a private education loan to cover your college expenses, the important thing for you to do is start the process as soon as possible. The earlier you get your loan paperwork complete (and all the disclosures filed away), the better your chances of meeting any payment deadlines imposed by the college. And, as we all know, paying by the due date does have it’s advantages — no late payment penalty fees and your registration doesn’t get cancelled.

A family begins the lobbying process for their fair share of federal student aid when they start the FAFSA process. However, before they can even begin to receive money from the various federal student aid programs, somebody else has to lobby for those coffers to be filled every year.  And, ultimately, it comes down to the federal government (our legislators) to appropriate the proper amount of funds to keep these programs in existence.

Our legislators will be coming together on July 26th to decide how federal dollars will be allocated for federal student aid programs. They have been provided a spending cap of $139.2 billion dollars. That may seem like a lot of money but it is drastically less than what has been allocated in prior years.

Justin Draeger is the president for NASFAA (National Association of Financial Aid Administrators) and he recommends that we all (students, parents, college administrators, education advocates, etc) do our part to “take action” and help make our legislators know that accessibility to education is important to us. Here are a few ways that you can help:

1. Contact your representative and explain the importance of the student aid programs and how even small cuts can affect students. NASFAA has provided letter templates to aid you in this process.
2. Share NASFAA’s “Faces of Student Aid” booklet with lawmakers to help them understand how cutting aid will impact all students.
3. Join the “Save Student Aid” campaign (on Facebook) and urge your students to do likewise. Stories shared through the Facebook campaign lead to media stories that have an impact on the student aid debate.
4. Pass this information onto others via your social media connections/conduits (Share Toolbar is below)

Federal student aid funding plays an essential role in helping students achieve their educational goals. Please take a moment to utilize the steps above to help spread the word about how important federal student aid is for our future scholars.