Your Parenting Info

As most of you who are parents of college students know, it’s that time of year–FAFSA time. It is one of the most enjoyable times of the year; a time when you get to fill out tedious amounts of online paperwork, look over those taxes from the previous year (numbers that many of you probably never want to see) and actually start thinking about this year’s income and taxes. Well, maybe that’s a good thing–this will force you to start more than a few days before April 15th.

For those of you who do not know what this dreadful five letter acronym is…

FAFSA. The Free Application for Federal Student Aid. That’s right, it’s free, and you can earn aid from the government with this application but filling it out does take some time (especially if you aren’t organized or did not quite finish up last year’s taxes). With this form, the U.S. Department of Education determines your Expected Family Contribution (EFC) by conducting a “need analysis” based on financial information. This EFC is the amount of money the government thinks that your family should be able to pay. The government then processes your results and sends them to the universities you list. Many schools base the amount of financial aid that they offer to you on this EFC. Of course, there are more factors, such as government loans, that are involved in the financial aid process, but many schools subtract the EFC from the cost of attending the school in order to establish how much financial aid you will receive. You can receive aid in the form of scholarship money (you don’t have to pay this back, but you do have to keep your GPA up or play for a school’s sports team, etc.), grant money (do not have to pay back), or loans.

The government offers loans at fairly low interest rates. If you receive a federally subsidized loan, you will not be charged any interest before you begin repaying the loan because the federal government subsidizes the interest during this time. However, an unsubsidized loan does start accruing interest from the day you “activate” it.

There is a lot more to say about the FAFSA, but I strongly encourage you to talk to professionals about it. If you haven’t filled it out yet and you have a child in college, it’s available! Also, a great source that will “forecast” what your EFC will be is FAFSA4caster.