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.

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 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 October 1st 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.

[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.

I get a number of questions/emails from readers and I respond to every one of them. The following represent a sampling of FAFSA questions received over the past couple of months. Hope this helps…

Continued from Part 1

Question 7: My husband is 40% owner in a small family farming business which is actively participating in the growing, harvesting, packing & shipping of onions.  Their business is incorporated.  Our 2010 income, between the W2 & K form, looks as if it was quite high since we had to show 40% of the total income of the company as our own income.  However, we did not pocket all of that money.  My husband & his partner take a set salary each month.  The amount above and beyond his normal salary remains in the company.  Because of the incorporation, it looks as if my husband earned 40% of a rather large amount of money in 2010.  But the reality is, the majority of it never entered our hands.  How do we fill out the income portion of the FAFSA?  Is the amount beyond our actual W2 income amount considered a deductible amount since it actually isn’t part of our personal gross income? And how would we figure out what our adjusted family gross income would be?

Answer 7: Unfortunately, you will have to report the income from the farm when you are filling out your FAFSA.There really is no way around it. However, you can always follow up (appeal) with each of the financial aid offices and, utilizing a process called “professional judgment”, they may make some sort of concession and adjust your FAFSA results (EFC) on the back end.  Unfortunately though, 90% of the situations like yours usually don’t get an adjustment.. But it never hurts to ask right?

Question 8: My wife and I divorced in 2008 – she makes more money and is now remarried.  Household income could be $250,000.00.  I make $85,000.00 and do have my girls more than she.

Do I simply put in my income, and that amount will be split? (it was $20,000.00 for the 2010/2011 academic year and I paid $10,000.00).  Shouldn’t she have to pay more?  We used my income for the EFC this year.  Does the govt. look at both incomes?  Both household incomes?  I am unlikely to remarry, thus am a single income dad, but feel this is not fair to me.

Answer 8: The FAFSA would only require your income if you are the parent that provides more support for the girls. Your ex-wife would not be required to complete the FAFSA. And since her household income is greater, that is probably a good thing when calculating the EFC.

As far as each of you paying your fair share of the tuition expense… the government doesn’t care much about that and doesn’t dictate that through the FAFSA process or through the college. The only entity that can enforce that is the court system and usually it is done at the time of the divorce and drafted in the paperwork who is responsible for what. So.. your only recourse is to go back to the judge and see about a different dollar amount being allocated based upon household income. Your other option is to withhold a portion or all of your payment but that puts a lot of undue stress on your student and it also puts you into contempt of court if your are supposed to being paying half per the divorce decree.

Question 9: Just sitting here being curious about an expected 2011 FAFSA response to my situation. For next school year I will have one in college, rather than two. I lost my $69,000/yr job last July and have been on unemployment only since October (after my severance ran out). All the jobs I have looked at and interviewed for pay about $20,000 less than I was making (and there is no other income to include from a parent).  I already was able to fill out special circumstance forms for the two schools for the Spring semester and both kids are eligible for a little more grant or loan money.  If I can file the FAFSA very early, is there a chance I will have a response so the schools can estimate a bill for next fall to help with Plus or Student Loan applications(or to even adjust the remaining 2010-11 yr payment more if I am not yet employed and am still on unemployment only in January or February?)

Answer 9: Yes.. The earlier you file your FAFSA the sooner the schools will have an estimated financial aid package put together for you. However, most schools will not be setting costs for next year until February and March (early spring) so you will not be able to get a full picture of your net expense until that time.

You probably won’t experience any further adjustment for the 2010-2011 academic year. But, if your situation persists, you may be able to file special circumstance paperwork along with your 2011-2012 FAFSA to help paint a more accurate picture of your financial situation for the coming academic year. It still may be worth dropping a line to each of the Financial Aid Offices to see if they can provide any more help. Each school is different and you may be surprised (in a positive way) of their response.

Question 10: I am 43 and returning to school to complete my undergraduate degree now being faced with divorce.  I have a son in college OOS on a full academic scholarship (not related to FAFSA).  I completed a FAFSA for the Spring session and qualified for a total of $3,300.00 of aid based on the information provided.  I understand that only half of this can be used in the Spring.  It is enough for community college, but not a university tuition.  This was based on filing married and using my spouse’s income.  I do not work.  We can file for divorce at any time and will need to before he leaves the country in January.  Will this increase my chances of obtaining financial aid?  I don’t know if my high school age daughter and I will be forced to move in with my mom, but other than the items in the house that we can sell, he will not be providing any support for either of us.  I need to finish my education, but obviously will not have the means to do so without assistance at this point.  Do you advise filing before January 1st?  If so, how much do you think this will help with my financial aid?

Answer 10: If you are planning on a divorce, you will want to legally have your divorce finalized prior to filing for your FAFSA. You can file the divorce at anytime but you just need to make sure that you don’t file your FAFSA until after the divorce is finalized. When you complete the FAFSA it reflects all your information as of the day that you file the FAFSA. So, you can finalize your divorce on a Monday and file your FAFSA on Tuesday with a single status.

Without delving into a number of questions, I am uncertain to how much ($$$) your single status will help your financial aid situation. However, I can tell you that it should impact it in a positive manner.

I get a number of questions/emails from readers and I respond to every one of them. The following represents a sampling of FAFSA questions received over the past couple of months. Hope this helps…

Question 1: We are filling out the FAFSA application with my son. My father (the student’s grandfather) owns a rental business in which I (student’s father) am 1/6th owner. I’ve been issued non-voting common stock in the company, along with my siblings, but we receive no income. However, my stocks have an estimated value of $500,000. Is there a way to list this on the application but also explain that this provides us with no income? Not sure if this makes sense, but listing $500,000 in stock makes us sound a lot more well off than we really are! Thanks for any guidance you can provide.

Answer 1: Unfortunately, the stock will have to be listed on your FAFSA in the asset column. The only thing you can do is reach out to the Financial Aid Office at the college and explain your situation to them to see if they can utilize professional judgment to adjust your EFC and corresponding financial aid package.. They may not be able to do anything but it never hurts to ask…

Question 2: Hello, my question is about a divorced student.  All of the answers I see are for students with divorced parents.  My divorce was final last week, and I really want to continue my education.  With my ex-husband’s income on our most recent tax paperwork, our income shows over $120,000.  Without his income, it will fall to under $40,000.  Is it possible to show this shift in income while filling out the FAFSA??  Are there other considerations I should be aware of as a new divorcee seeing financial aid?

Answer 2: As long as your divorce is final before you complete the FAFSA, you are not required to include your ex-husband’s asset and income information on the FAFSA. You will only be required to reference your information.

Follow-up Question 3: I guess my confusion is how to pull the information from the tax returns.  We filed jointly, and our “adjusted gross income” is combined.  How do I pull just MY adjusted gross income out of that?  Very confusing!  A step-by-step manual for new divorcees would be a blessing! 😀

Follow-up Answer 3: Not a problem… You will just need to reference your individual W-2’s and probably do a mock-up of your taxes for last year (as if you were filing individually). Any additional income or deductions that you shared with your ex-husband will need to be pro-rated by 50%.

Question 4: Our family owns and operates a small farm.  We do not reside on this farm, but we operate a cattle operation, renting additional hay land and pasture to feed the cattle.  Our crop land is rented out to other people, but we sometimes graze this land after the crops have been harvested.  What portion of the assets from this farm should be reported on the FAFSA?

Answer 4: The good news is that as long as you “materially” participate in the operation of the farm you do not need to report it as an asset on the FAFSA.    It is excluded regardless of whether you reside on the property or not.

Question 5: My son in law is attending an accredited university overseas, in Israel.  He has dual citizenship — US and Israeli.  He would like to apply for a student loan via FAFSA.  He will turn 25 in September.  He served in the IDF (Israeli Defense Forces) for nearly five years.  His current status is that of a reserve duty soldier, meaning he periodically is called into service for a brief period of time.   The question is if the requirement for registering for Selective Service as part of the FAFSA, is still a viable requirement considering his situation?  Would such a situation enable him to have that requirement waived?  If not, and he still has to register with the Selective Service, what does that mean in practical terms?

Answer 5: Yes… your son-in-law, as a dual citizen and regardless of where he is taking up residence, is required to register for selective service if he wants to gain benefit of any of the federal loan and grant programs offered through the FAFSA.

The hope is that the US never implements the draft and calls him up to duty. However, in the unlikelihood that this this ever happens, he may be able to get a pass on being enlisted because of his commitment to the Israeli Defense Forces.  May be viewed as a conflict of interest…

Question 6: I was recently filling out my FAFSA and wasn’t sure how to accurately answer the question pertaining to assets. I’m hoping you may be able to help.  The FAFSA asks whether or not an individual has more than $2700 in assets.  I do technically have more than that in my bank account, however the majority of that money is from my current student loan that is being used to support me through school this year and will ultimately need to be paid off.  In addition, I have outstanding student loans that will need to be paid off upon graduation in addition to the loan I currently have in my bank account.  So overall, with the total amount of  debt I carry, I have less than $2700. it seems strange that my financial aid would keep me from being awarded more financial aid.

Answer 6: Unfortunately, regardless of the source (student loans) of the cash in the bank, you still have to report it as an asset. The only option you have is to gift the money to someone else or spend it prior to completing and submitting your FAFSA form if you don’t want it included in the EFC calculation.

For students, the EFC calculation basically states that you can spend 20% of your current assets on college expenses in the coming academic year. So if you have 3000 in the bank, automatically $600 will be earmarked by the FAFSA for you to spend next year toward your college expenses (regardless of your student loan debt- which doesn’t seem quite fair).