I loved this part of what I liked to call my “admission spiel,” because I enjoyed helping families dive into financial aid and scholarships.
Anyway, I launched into one particular admission spiel with a family in my office one day. We talked through the available merit-based scholarships the student would automatically receive through the college. (Based on his grade point average and ACT score.) Then I brightly said, “And don’t forget to fill out scholarship applications in your community and online!”
The student avoided his parents’ gaze.
The student’s dad chuckled and his mom said dryly, “The problem is getting him motivated to actually do them.”
Sound familiar?
Kids seem to fall into two camps: Those who apply for scholarships like it’s their job and those who have no interest in scholarship applications at all. The kids in the latter group might just need a little nudge. Here’s how to get your high schooler started.
Step 1: Have the talk. (The money talk!)
Your child needs to hear why it’s important to get scholarships. This may mean breaking down costs in a visual way so she can see where the gaps will be if she doesn’t apply for them.
For example, you might want to break it down like this — and you can get way fancier than I did, with charts and pie graphs and whatever!
Dream school cost: $50,000 per year
Amount of financial aid you’ll receive based on dream school’s net price calculator(net price calculators live on financial aid pages and estimate how much financial aid you may get): $20,000 per year
Total cost after net price calculator results: $30,000
Amount in 529 plan: $60,000 ($15,000 to be distributed over four years)
Out-of-pocket costs: $15,000 per year
Note: You’ll be basing this off the net price calculator, which is an estimate, but that’s okay. It’ll give you a rough idea to figure out how much potential out-of-pocket costs you’ll have.
If the out-of-pocket costs make your high schooler nervous, assure her that you’re going to work together to figure out that out-of-pocket amount. But tell her that scholarships are going to help out a lot — and that it’s better than taking out oodles of loans.
Step 2: Hammer out a goal. Then set smaller goals.
It’s hard to get started if you have no final goal. In high school, goals are built right in: English persuasion paper is due on such-and-such a date, for example. Science test on Friday.
Then, set a big goal with your child — one that you can both agree on, like “Complete 50 scholarship applications” between June and August (or whatever it may be).
Then, within that goal, set up mini-goals. A mini-goal could be like this: “Research and choose 10 scholarships to apply for during the first two weeks of June.” One of my favorite phrases: “The man who moves a mountain begins by carrying away small stones.” (Supposedly Confucius said it — how do they know that? I picture some guy following him around all day, writing down every word he said.)
Anyway, I recommend breaking everything down that you possibly can.
Step 3: Play to your child’s strengths.
This means two things. It means knowing your child’s capabilities within those goals. Does your child despise writing essays, even if they’re about himself? Work with him to find scholarships that eliminate an essay component or require a brief essay.
Also, make a list of your kiddo’s strengths. What’s unique about him? What does he have going for him that can niche his way into scholarships? Does he plan to major in something specific? Does he have a disability? Do his hobbies qualify him for a scholarship? Brainstorm and do some hearty research online.
Step 4: Help your high schooler get organized.
My daughter takes piano lessons, and can you guess the hardest part of practicing? You got it — getting started. She dreads it, but once she gets into a new piece, she’s fine. In fact, I finally started giving her permission to play the songs the worst she could the first time around so that they sounded terrible. That seems to work.
The hardest part is getting started, and it seems especially true for kids. (It may be hard for you as well!) But you know that once you actually get into something, it’s not so bad. But you have to start somewhere!
It helps to have a plan mapped out ahead of time so your child can stick to goals. Sticky notes on a calendar work really well. If you want to get techy, use a project management tool like Trello or Asana to keep your child on his or her goals. I personally use Trello for work and I love how due dates turn yellow and send you email reminders when a deadline looms closer.
Step 5: Talk to everyone about scholarships.
Next, alk to anyone who might have a connection — your job, your partner’s job, your neighbor — whoever you can think of! And yes, talk to that guidance counselor and those at colleges. This can be you and your child’s fact-finding mission.
Finally, once one of you find out about a scholarship, what will you do? You bet — you’ll put it on the “to do” calendar.
Step 6: Develop a few key paragraphs for pluck ’n plug.
What do I mean by pluck ’n plug? Easy: Develop a beginning, middle and end for scholarship essays that your child can use for just about any scholarship application. It’ll be a paragraph you can store on Trello, Asana or Google docs.
Will every scholarship application sound the same? Of course not! However, it sure does help with getting started when you already have something to work with.
These three paragraphs should be kind of like writing an essay for school. Your child should write an attention-grabbing intro:
My name’s Sadie and I’ve been blind since I was two. How did it happen? Unfortunately, that’s my earliest memory. My brother was a science whiz (and also 13 years older than me). One day, he…
An equally gripping middle, which addresses questions asked in individual scholarship essays (you’ll have to add answers to those later):
What’s the largest predictor of success, you ask? I believe I’ve had to overcome a lot in my life, and college is just one more of the series of challenges. I’ve read a lot (audio books are my fave!) of books about leadership and perseverance and one thing I’ve learned is that grit matters. In fact, it’s one of the largest predictors of success. Never quitting. Digging in and waking up thrilled for the challenges you face every single day, whether your world is full of color or not.
A conclusion that ties it all together:
So, I learned at an early age that life doesn’t always go as planned. But you know what? I think I dream in color — even if I can’t remember exactly what colors look like. I know grit plays a role in what happens when you fall down (blind or not) and that — not talent, not luck — is everything. It’s why I believe I deserve the XYZ Scholarship.
Your kiddo can mix and match, pluck ’n plug. And fill in the gaps. This doesn’t have to be rocket science!
Tackle the Overwhelm
Finally, tell your child she can do this. And stopping short of doing scholarship essays for her, tell her you’ll help her in any way you can.
Also, make sure your child understands that this doesn’t have to be so complicated. It’s only a matter of moving one stone, little by little.
When your child is college-bound, financial stress is a very real thing. In fact, the financial part of sending a child off to college can be overwhelming.
I spent 12 years working in college admission at my alma mater. Every so often, parents would break down in tears in my office. They wanted so badly to be able to pay for college. I’ve never forgotten these conversations and I still think about those families.
Money is one of the most commonly mentioned personal stressors, according to the American Psychological Association’s 2019 Stress in America survey. In fact, 60 percent of people from the survey cite money as a major stressor.
Chances are, you probably feel some financial stress — I mean, 60 percent is a heckuva lot of people!
It’s easy to say, “Think about something else! Go for a bike ride!” You know, common ways to de-stress your life. But financial stress is so different — it doesn’t go away when you spend 30 minutes with a yoga mat. It may take time and involve some serious planning.
So instead of telling you to grow your own potatoes or start extreme couponing, here are six ideas for how to attack financial stress. Warning: They’re not all quick fixes, but they will help you feel better about financial stress later on. Promise.
1. Recognize how you deal with money-related stress.
The first thing you can do to alleviate financial stress is to recognize how you handle money. Have you ever stopped to evaluate how money in general makes you feel?
Maybe you:
Never talk about it. You just let the stress build up like a hot air balloon.
Talk about money (or lack thereof) with everyone — your spouse, your kids, your friends — everyone!
Fall somewhere in between these two approaches.
Suze Orman, award-winning author and financial personality, believes that how your parents handled money paved the way for you to formulate your own attitudes about money.
Did money cause stress in your family? Did you parents spend more than they earned? Was money a source of pain? Were your parents controlled by money instead of the other way around?
Orman grew up in a poor family. She often tells the story about how her father’s small takeout restaurant burst into flames. He still ran in to get the cash register, burning his hands in the process. It showed a young Orman that money is more important than life itself!
Money is so closely tied to emotions. For families, a big source of stress can be the cost of preparing teens for college, but resources like Educo provide affordable SAT, ACT and AP exam prep designed to ease both financial and academic pressure.
You may want to think of it this way instead: You define your money. You tell it what to do! You’re in control of it! You can make as much as you want. (You just might not be able to do that completely through a traditional nine-to-five job. Check out my piece on how parents can make money!)
2. Write down your goals.
When I worked for the college, I gave a presentation to my team during our annual summer retreat about writing goals. When I announced my topic choice, I’m pretty sure everyone groaned. “Why do you feel that way about goal setting?” I asked.
I laughed and said, “What’s boring about getting exactly what you want? Let’s say you write, ‘I’d like a new car in a year and I’ll do A, B and C in order to save for it.’ What’s boring about that? You get a new car!’”
I’m sort of a geek when it comes to goal-setting. Let me tell you, writing down your goals works. For example, my husband and I resolved to save a certain amount of money by this spring because he wants a new shop. It’s currently in the works — all because of a little Google doc (and a bit of willpower, too).
The premise is simple: Write it down, make it happen!
You can write down your goals associated with paying for college. Let’s say you write, “Get a side gig by July 2020 to earn extra money for Junior’s college fund.” And yes, you can do this even if your child is set to go to college this fall.
Try it! Write it down! I promise, it works. There’s something empowering about writing down your goals and posting them where you can see them. And man, oh, man, is it cool when you turn that goal into reality.
3. Meet with a financial advisor.
You may already have a financial advisor, but if you haven’t met with him or her recently, it may be time for a financial checkup.
Never worked with a financial advisor before? One of the best ways to find a great financial advisor is to ask around. Ask your family and friends who they use in town. It’s important to have a financial advisor who has a good reputation in your community.
Next, meet with a few financial advisors and ask good questions! Here are some you can ask:
Are you a fiduciary? A fiduciary will put your financial interests before their own. If a financial advisor is not a fiduciary, don’t choose that advisor.
How do you get paid? Focus on fee-only advisors. Fee-only advisors might charge a percentage of the assets they manage for you — a flat fee for services or an hourly fee. If costs are a concern, use a robo-advisor like Betterment, WealthfrontorSigFig.
What are your qualifications? You can check the legitimacy of a financial advisor by visiting FINRA’s BrokerCheck. BrokerCheck is a free tool that can help you research advisors and firms.
How will you help me map out a plan to pay for college? Whether you’ve saved nothing at all or have some money in the bank, an advisor should be able to give you an idea of how he will help you approach paying for college.
Make sure the advisor meshes well with your personality. Your best friend may have recommended a particular advisor, but that person may not click with you. It’s okay. Move on to someone else. In all cases, your first consultation is free.
Believe it or not, talking with financial advisors is often very soothing. The reason? They help you come up with a concrete plan to help you tackle your goals.
4. Use financial aid to your advantage.
Yes, this could be the most obvious de-stressor of all — getting financial aid!
Class of 2020 parents, you can combat financial stress during this corona-crazy time. All it takes is a simple phone call. Ask the financial aid office at your child’s chosen college if there’s any extra money laying around. Inquire about extra scholarships. Ask about work-study. Tell the financial aid office about a recent job loss. Talk to someone in financial aid about any financial situation you’re going through. Colleges want your child to go to their college and can help you alleviate financial stress.
If you’re the parent of a sophomore or junior, financial aid can go a long way to help you and your child afford college. It’s a great idea to start planning now. Check out my short piece about financial aid (What is Financial Aid? Plus, 6 Steps to Get It) so you start understanding the basics.
5. Reduce other stressors.
What’s a great way to reduce stress? You can make a long list of temporary stress relievers, I’m sure: Go for a walk. Talk to a friend on the phone. Color rocks with sidewalk chalk (that’s what I’m watching my kids do right now).
Do you know what seems to exacerbate one stress? Another stressor!
For example, let’s say you’re already stressed about paying for college. It doesn’t help if you’re stressed about, say, the 2020 presidential election. (I’m not pulling this out of thin air — the American Psychological Association’s 2019 Stress in America survey actually cited the presidential election as a major source of stress. It would be interesting to know how coronavirus would rank now.)
As much as you can, try to reduce other stressors in your life. Have a talk with your neighbor about his dog’s incessant barking. Talk to your mailman about firmly shutting your mailbox door so your mail isn’t soggy every time you grab the mail. (These seem little, but man, are they irritating!)
Eliminate the little stressors so you can tackle your financial stress before college head-on and talk to your spouse or others about what’s really stressing you out.
6. Talk to someone.
Chances are, you know someone else who’s sending a child off to college this fall. Or better yet, you know someone who already has three kids in college right now. This is your tribe! Your friends and community can be a great sounding board for your fears.
If your regular tribe doesn’t include parents of college-bound kids, it may be time to find a new tribe or add to your existing tribe.
You might need to go beyond your tribe and your spouse or partner and seek counseling if you’re really stressed out. If you find daily life to be a struggle or feel that your emotions are overwhelming, seek help. Just remember, money fears are real. It’s okay to reach out to a professional.
Reduce Stress Now
First and foremost, remember to celebrate one major thing: That your child’s going to college. Focus on what’s important. He or she is going to get the college education that he or she (and frankly, you!) have always dreamed about.
Remember that even though you may want to help your child pay for college, it’s still possible for your child to get loans to fund college completely.
Above all else, consider your attitudes toward money. Again, you may want to reframe how you think about money. If you think of money as unlimited — flowing in abundance! — it might just happen and help you and your kiddo pay for college.
You’ve gone on a dozen college visits with your son or daughter and watched as he or she applied to just as many schools. You’ve waited months for the financial aid award from his or her first-choice school to land in your inbox. You open it nervously and your eyes dart immediately to the bottom numbers. The out-of-pocket cost. The amount you and/or your child will need to pay for college.
You may think it’s a lot of money.
Before you set that award aside and start poring over the financial aid awards for other (less expensive) schools, stop for a second. This could be an opportunity — a challenge! It’s time to get creative, ask a lot of questions about cost savings and stay positive. You can do this.
I caught up with Dr. Terri Snyders Crumley, vice president for enrollment and marketing at Mount Mercy University, to get her perspective.
Crumley said, “Everyone wants college to be free, but colleges have to pay their faculty and staff, electricity and more, just like any business. If a family thinks of paying for college as a partnership — where the college helps a bit, the student helps, the family helps — it’s usually doable. And that’s the same whether it’s a state school or private college.”
In other words, there are things you can do if you feel the financial aid award is a lot pricier than you anticipated.
1. First, breathe.
It can be hard to focus on anything but those final numbers. You want your child to go to his first choice school — especially when he’s worked so hard to get into the school of his dreams. Stay calm and know that there are things you can do — and a lot of what you can do involves a little bit of creative thinking.
2. Talk to the financial aid office.
Crumley suggests picking up the phone and directly talking to financial aid personnel at your son or daughter’s top choice institution. This is when the relationships you developed during college visits may come in handy. Ask a few questions:
Are there other scholarship opportunities available? Find out whether there are additional scholarships your son or daughter can still apply for. He or she may still be able to apply for a last-minute music scholarship or a writing scholarship — just ask!
Is work-study available? Work-study is a federally-funded program that can help your son or daughter pay for college. They do this by earning money through an on-campus job. Your son or daughter may not have been awarded work-study at all, and this is the time to ask whether it’s available. If work-study is already plugged into the financial aid award, ask if more work-study money can be added. It’s a little-known secret — and to get it, all you might have to do is ask.
Was my FAFSA information correct? Ask some deeper questions about the FAFSA, says Crumley, because it’s very possible that you could have filled it out incorrectly. Work with the financial aid office to double-check. Did you accidently include your 401(k) retirement? Was your expected family contribution (EFC) inflated due to one-time income? (EFC is an indicative number that colleges use to determine how much financial aid you’re eligible for.) Find out through the financial aid office whether you need to fix what’s on your FAFSA.
3. Evaluate whether you qualify for special circumstances.
Colleges know that financial setbacks happen. You might have caught a bad break or two since you filed your FAFSA. Your son or daughter’s first-choice school may be able to take special circumstances into account and adjust your financial aid award. The following situations could qualify as special circumstances. You may:
Support multiple households (married family members may live apart or you may support elderly family members or family members abroad)
Experience one-time income, such as withdrawing retirement funds for emergency purposes
Be paying funeral, medical or dental expenses
Have education debt yourself
Experience a job loss or a significant reduction in income
Check with the college financial aid office to find out whether you’re eligible to fill out its special circumstance form.
4. Consider cost savings.
This is where you get to think outside the box. Put all your creative juices into overdrive and figure out how much cost savings are in store. How much money will you save when your child is no longer living at home (if he or she is going away to school)? How can those savings can be applied to college costs?
Groceries
How much do you currently spend on groceries? Imagine how much you’ll save if your son isn’t home to drink four gallons of milk per week and eat two meals in one sitting!
Utilities
How much do you spend on utilities? How much cost savings will you incur when your teenager isn’t taking two showers a day, leaving all the lights on or cranking up the heat without your knowledge?
Car insurance and other vehicle-related expenses
Your student may not need a car at college. Unless he or she has an off-campus job, the reality is that your student can catch rides with friends to Walmart or take public transportation. That means you could even sell the car! You’ll also save a lot of gas money — no more, “Hey, Mom, can I have $40 for gas?”
Toiletries
You won’t have to stock your house full of toilet paper and Kleenexes for your high school student — major cost savings. Plus, if you really wanted to, you could encourage your student to come up with his own funds for deodorant, soap, shampoo and whatever else he might need. He can get a job, use birthday cash — it’s a great time for him to get creative with money.
Lessons and athletic fees
You won’t have to pay for piano or voice lessons anymore. That’s a lot of savings right there, especially if you’re spending hundreds of dollars per year on athletic club participation or whatever else your son or daughter participates in at his or her high school.
How much can your child work and save over each summer break? Don’t discount what your student can earn at the public pool, waiting tables or even freelancing. Add that to the pile! A summer job earning $4,000 can make a huge difference.
6. Break it down.
Once you’ve done steps one through five, take a look at the out-of-pocket costs again. Pretend it’s a puzzle you need to solve (and can solve!) and break it into chunks to make it more palatable. Encourage your student to figure out how much he or she can contribute. Determine how much you can each feasibly add and consider the cost savings mentioned above. Maybe grandparents want to chip in, too!
Another way to break the cost into manageable chunks is to opt for a 10-month payment plan at your child’s school. The 10-month payment plan divides the out-of-pocket costs into 10 separate payments over the course of a school year. Once you do that, does it seem so scary anymore? I hope not.
Finally, decide whether you need a private loan for the rest. Note: Direct Subsidized and Unsubsidized Loans, which are both federal loans for eligible students who will attend four-year colleges or universities, could also be built into the financial aid award. Talk to the financial aid office about loan options for you and your family.
Get excited and have a family conversation
I love Dr. Crumley’s approach — that paying for college can be a partnership between the parent, the student and the college. Tackle that out-of-pocket cost with some energy! Once you and your family sit down and actually tackle the financial aid award head-on, it can even be exciting!
It doesn’t have to be daunting. Work with the financial aid office to break down the out-of-pocket costs. Make it your mantra! Break it down, break it down, break it down.
Student loans stir up a media frenzy all the time.
Love ‘em or hate ‘em, they still enable your son or daughter to get a degree that can increase his or her earnings way, way into the future. So, how do student loans work in the easiest language possible? (Key words, right there!)
Here’s what you need to know, from interest rates to federal loan and private loan options. Let’s dig in and answer the big question: “How do student loans work?”
What’s a Student Loan?
Simply put, you borrow money and pay it back — that’s a student loan.
You can access student loans from various sources, including the federal government, private sources (like your hometown bank) and other organizations. Your kiddo must pay back the money he borrows — with interest. He must pay student loans back whether he graduates or not.
One more thing before I dive in. Many families get hung up on taking out loans. I get it. However, if a particular school is the right fit for your child and can deliver the results he or she wants or needs, consider taking out loans.
So, how do you know what type of student loan is best? Great question.
Types of Student Loans
For simplicity’s sake, let’s focus specifically on federal and private loans.
Federal Student Loans
Guess who your lender is when you borrow federal student loans? Yep, it’s the federal government — or to be specific, the U.S. Department of Education. You’ll find three types of federal loans created specifically for college-bound students:
Direct Unsubsidized and Subsidized loans
Direct PLUS loans: This includes Grad PLUS loans for graduate and professional students and Parent PLUS loans for parents of undergraduate students.
Federal student loans are more flexible than private student loans for several reasons:
No credit checks involved — with the exception of the Direct PLUS loan, which does require a credit check.
Income-driven repayment plans are an option in some cases, which means repayment is based on how much your student makes once he or she graduates from college.
Repayment plans can change as needed.
Federal student loan interest rates are lower compared to private loans.
Private Student Loans
Where can you get a private loan?
A local bank, credit union or national bank are three primary options.
These loans can fill in the need gap after your student has exhausted these options, in order: Scholarships, grants, parent/student savings and federal student loans. Here are some fast facts about private student loans:
You’ll hear about two types of interest rates: fixed and variable interest rates. Fixed interest rates are just like they sound — they don’t change, so your monthly payments stay the same. Variable interest rates go up and down.
You or your student can make interest-only or fixed payments while you’re in school.
Private loans often require a co-signer. This person is commonly you, the parent, or another relative. Students can qualify for a private loan without a co-signer, though that’s difficult to achieve. No matter who applies for the loan, you will need a good credit score and will need to show proof of income.
Finally, remember that co-signers are just as responsible for paying back loans. Have a conversation with your son or daughter about risk and how you’ll each repay the loan before you agree to take on a private loan. In Canada, especially in British Columbia, students facing multiple private loans may find that debt consolidation offers a way to simplify payments and potentially reduce interest costs.
What Are Interest Rates?
You pay interest to a lender in order to be able to borrow money. Interest is a percentage ofunpaid principal amount. Direct loans are daily interest loans, which means that interest accrues (accumulates) every single day.
The higher the interest rate, the more you’ll end up paying on a loan if you take the full loan term to pay it off. Subsidized and unsubsidized loans treat interest rates differently:
Subsidized loans: The government pays the interest while your student is in school at least half-time, for the first six months after he or she leaves school and during deferment. Deferment is when your child postpones loan payments.
Unsubsidized loans: The government does not pay the interest while your son or daughter is in school.
Federal loan interest rates
Private loan interest rates
Interest rates are fixed and rates are also usually lower than those for private loans. Here are the current rates:
Direct Subsidized loans and Direct Unsubsidized loans for undergraduates: 4.53%
Direct Unsubsidized loans for graduate or professional students: 6.08%
Direct PLUS loans for parents and graduate or professional students: 7.08%
Can be variable or fixed; interest rates can be higher or lower than federal student loan rates.
Shop around to find the right private student loan lender. You can also check with your child’s chosen school’s financial aid office to see whether it has a preferred lender list. Have a conversation with someone in the financial aid office of the community college, liberal arts college or university your child plans to attend!
Next, compare interest rates, payment terms and fees to find the most cost-effective loan that suits your student’s needs. Next, complete a full application once you decide on the right loan for you.
Key tip: Only apply for how much you need to borrow.
What’s the Max Amount You Can You Borrow?
Your son or daughter can’t borrow an unlimited amount of student loans. He or she can only borrow from $5,500 to $12,500 per year for federal subsidized and unsubsidized student loans as an undergraduate. This amount also depends on his or her year in school and whether you can claim your child as a dependent.
Private student loan limits vary by lender. Generally, the amount your student borrows can’t exceed the school’s total cost of attendance.
Pay Off Student Loans
One key to knowing the answer to the question, “How do student loans work?” is knowing how interest rates play into the picture. It’s never too early to start talking about how to handle student loans. High school is a great time to start!
Lots of fancy repayment options may present themselves once your child graduates — refinancing, consolidating, etc. Consider the Debt Avalanche Method of repaying student loans.
What’s the Debt Avalanche Method? Great question. Here’s a quick overview:
First, make sure your child doesn’t consolidate the loans. Keep them separate. Your child’s interest rates will likely be a mix of low to high rates for federal and private loans.
Next, your child should always make the minimum monthly payment on each loan.
The Debt Avalanche Method means your child pays off student loan debt with the highest interest rate.
Once that higher rate loan is paid off, pay off the loan with the next highest interest rate.
Your child is finally done when the last payment is made on the lowest interest rate loan.
The Debt Snowball Method is also a great option for quick wins. Your child would pay the minimum balance on all loans, just like in the Debt Avalanche Method. Then, he or she would pay the smallest balance first. Next, tackle the next highest balance until the loans disappear. It’s a great way to get some instant gratification!
Get the Right Student Loans for Your Child’s Needs
Think you have a basic idea of how student loans work? I hope so!
Above all else, make sure you max out federal student loan borrowing before taking out private student loans. Federal loans have protections that private loans don’t, including income-driven repayment plans and loan forgiveness programs.
The perfect college visit scenario: You crunch through the leaves on a beautiful college campus and listen to a tour guide’s perfect spiel on a 70-degree October day.
The reality: You might’ve had the gorgeous campus tour. But then — you find yourself in the financial aid director’s office. He’s saying words like “FAFSA” and “FSA ID” — and then, he turns you loose. You feel a little… blurry.
A college decision is a thrilling adventure — so let’s keep it that way. We’ll completely demystify the FAFSA for you.
What is the Free Application For Student Aid (FASFA)?
The Free Application For Student Aid (FAFSA) is a free application that gives you access to federal and institutional aid to pay for college. You’ll get access to federal grants, work studyand loans. Colleges use your FAFSA results to determine your eligibility for different types of aid. Private financial aid providers may also use your FAFSA application to determine whether you qualify for the type of aid they provide as well.
Still sound a little murky? Never fear — we’ll cover how to file the FAFSA next.
How to fill out the FAFSA
Here are the steps you’ll need to take to fill out the FAFSA — whether you’re a student, parent, guardian, grandparent or if you’re filling it out for yourself.
First, grab a few documents before you even sit down at the computer:
Social Security numbers for parents and students
Your driver’s license number
Your alien registration number if you aren’t a U.S. citizen
Tax returns and W-2s
Information for income such as child support, interest income and more
Statements for cash, savings and checking accounts, investment accounts and more
Step 1: Get your FSA ID.
An FSA ID is a username and password that’s unique and confirms your identity when you’re looking at or signing official financial aid documents. Let’s say you’re filling out the FAFSA for your dependent student. You’ll need two separate FSA IDs — one for you and one for your child. Remember that you’ll need to remember your FSA ID every year that you file the FAFSA — lock it in your memory bank.
Just kidding. You might never remember it ever again. Write it down and save it somewhere safe.
Step 2: Go to the FAFSA login page.
Find “Start here” on FAFSA.gov and enter your student’s name, Social Security number and date of birth. Be absolutely sure your name and Social Security numbers match what’s on your Social Security card — lots of financial aid personnel at colleges encounter a problem when these don’t match.
Step 3: List colleges and universities.
You can list up to 10 colleges and universities where you want the FAFSA sent — but you must choose at least one. Use the Federal School Code search to identify each of the schools on your list.
Step 4: Know your dependency status.
Some students might consider themselves an independent student — but the reality is that it’s really tough to declare yourself an independent student, even if you don’t live with your parents. Here’s the checklist that can lead you through the process so you know for sure.
Step 5: Add parent information.
You’re going to have to add legal parent(s) on the FAFSA if you’re a dependent student or add your own name if you’re filing for a dependent.
You must almost always list a stepparent who is married to your legal parent.
Let’s say that your parents are divorced — you’ll include information for the parent you live with most of the time.
You’ll need to list both parents if they live together, regardless of whether they’re the same or opposite sex.
Step 6: Offer up financial information.
You’ll need to gather up tax information from 2018 for the 2020-2021 FAFSA.
The data retrieval tool (IRS DRT) takes most of the work out of filing the FAFSA. It pulls information from the IRS and prepopulates it onto your FAFSA. Here’s a quick overview of how it works:
Go to the IRS website through the DRT and fill out your name exactly as it is on your taxes.
You’ll be able to find a page that tells you that your tax information is ready to go and you’ll be able to use that page to import your information directly onto the FAFSA form.
You’ll be able to see “Transferred from the IRS” in the correct fields on your FAFSA but won’t be able to see exactly what’s in these fields. In other words, you won’t be able to change this information.
You can opt to fill in all parts of the FAFSA manually instead of using the IRS DRT.
Step 7: Sign and submit your FAFSA.
Sign with your FSA ID and that ensures that your form is processed quickly. You do have the option to print, sign and mail in a signature page to submit your FAFSA, though that won’t be processed as quickly as it would if you used the FSA ID.
How does the FAFSA work?
Next, the magic happens in each college’s financial aid office. The colleges you’re interested in attending will use your FAFSA results to determine your eligibility for financial aid. The financial aid office at every school uses a couple of pieces of information, including:
Expected Family Contribution (EFC): Your EFC is a formulated number (the formula is established by the federal government) which helps colleges and universities determine how much you could feasibly pay for college. (Note: Don’t be alarmed if your EFC seems high. Many families feel that way.)
Year in school
Enrollment status: The schools will need to know whether you’re going to be a full-time or half-time student.
Cost of attendance (COA): The COA is the amount you’ll pay to attend each school. It may include — but is not limited to — tuition, room, board and fees, books, supplies, transportation costs, loan fees and more.
The schools you’re considering might have other forms you’ll need to fill out to get financial aid specifically from each school, so check each financial aid office for more information.
Each school will also have a different timeline to release aid. Some colleges can get your financial aid award to you within two weeks — but this varies from school to school. Just ask.
What does the FAFSA get you?
Contrary to popular belief, you don’t have to file the FAFSA — but know that you could miss out on certain need-based aid if you don’t. The aid you could get comes in four major flavors: Scholarships, grants, loans and work study. Here’s the scoop.
Federal aid
Federal aid is given through the U.S. Department of Education primarily through grants, work study funds and low-interest loans.
Grants don’t have to be repaid, unless you withdraw from school and owe money to the program that provides you the grant.
Work study is a program through your school that allows you to work at your school and earn money.
Federal student loans are borrowed money that must be repaid. Federal student loans are the best loans you can get because they typically offer the lowest interest rates on the market.
There are other federal aid opportunities, too. You might qualify for aid as the spouse or dependent of a veteran, as a foster care youth and more.
State aid
You might not qualify for federal grants — so check with the department of education, the higher education agency or adult education agency in your state to see what types of grants may be available to you. Note: The colleges and universities you’ve applied to will also be able to tell you whether you qualify for state grants or other state aid.
College or university aid
The colleges and universities you’ve applied to will evaluate your FAFSA and award you directly from their own funds, too. Scholarships can offer you a major boost. Scholarships are like grants — you don’t have to pay back the money you’re awarded.
You’ll see the need-based scholarships you’ve received after you get your financial aid award. But if you want to be proactive, ask your admission counselor at each college for more information about all scholarships available.
When is the FAFSA due?
The federal FAFSA deadline is June 30, but the schools you’re applying to might require you to submit it before then. Don’t miss schools’ deadlines — check with each individual school so you don’t miss out on getting as much financial aid as possible.
As of October 1, 2019, you could file the FAFSA for the 2020-2021 academic year.
File the FAFSA now
You’ll be able to check your FAFSA form’s status immediately after you submit the online form. A paper FAFSA form takes a bit longer. You can learn more about 7–10 days you mail it in — either log in to fafsa.gov or contact the Federal Student Aid Information Center.
Again — remember that you should never pay money to complete the FAFSA. You know you’ve encountered a scam website if a site asks you for your credit card information. Close out of the website immediately and go to fafsa.ed.gov.
