Upasana Gupta - September 29, 2013
Financial Aid: 5 Common Myths
Get First-Hand Tips from a Financial Aid Officer
It takes a lot of work to cover all the bases of financial aid. But putting in the effort and avoiding common myths can save students and parents' a heap of college tuition money up front.Here's a look at the some of the common myths families face in the financial aid process, and the best ways to steer clear of them.
(Suggested Read: Extensive FAQ section on financial aid; Roadmap for financial aid)
"The application use to be a little intimidating a few years ago, but not anymore," says Leonard Mesonas, director of financial aid at Raritan Valley Community College (RVCC) located in New Jersey.
In the past, a student needed to get their tax returns and manually fill out the FAFSA form with all tax details which was quite cumbersome. But now, the Department of Education, has a data match or link with the IRS so students have the option to get their tax information directly imported from the IRS. Basically, a student now requires to validate his or her identity and confirm to get the data imported into their financial aid form.
"Dealing with the hard stuff is over. Filling out the FAFSA has never been easier," Mesonas says.
2. My parents' income is on the higher side; there is no point in filling out the FAFSA: There is a formulae used by the Department of Education to determine federal grant and yes, family income and household size are the key factors which significantly affect a student's chance to qualify for federal aid. For example, if a student's family has relatively high income and few household members there is a small chance of getting grant, but conversely if they have low family income and high number of people living in the house then they are generally qualified for federal grant.
But students should keep in mind that FAFSA is also the best way to apply for student loans. Everyone should fill out the FAFSA even high income students. Stafford and other federal loans is available only through the FAFSA application. Stafford loans are deferred, with fixed interest rates and does not require a co-signator. Also, students should be aware that there are new repayment options, such as Income Based Repayment to assist them to repay their Stafford loans.
"Stafford loans are typically the most affordable type of student loans," Mesonas says. "It is highly recommended for undergraduate students."
3. Parents' role is limited in FAFSA: "Often a common confusion is that parents' figure that once a student turns 18 they don't have to provide any support or information for financial aid and that's actually incorrect, " Mesonas says. On the application there is a series of dependency questions and parents need to be involved in the process especially if their child is a dependent student. The Department of Education has clearly defined who is a dependent vs. independent student.
A student is considered independent for federal financial aid purposes who is at least one of the following:
-Over 24 years of age;
-Married;
-Have a dependent child who receives at least 50 percent of support from student;
-Have a dependent person who receives at least 50 percent of support from student;
-A veteran of the armed forces;
-An orphan or ward of the court.
Only independent students do not need any parental information on their financial aid forms.
4. It matters when you apply for aid: "At RVCC we do not have a hard deadline, but many schools do," Mesonas says.
Students should check individually with the schools they are interested in applying to for their deadlines. Some schools have
deadlines for institutional aid or scholarships, which is given out on first come, first serve basis. In addition, states have
certain deadlines for state aid that must be met to be eligible for state aid for the upcoming year. For example, in New
Jersey continuing students need to complete and submit their FAFSA form by June 1st, in order to be eligible for state aid.
So if students apply by July 1st, they have forfeited all their chances of getting state aid. However, for first time students the
deadline is Oct 1st. Most schools prefer that students apply early so that they can figure out their options for paying college
tuition.
"My rule of thumb for students is to tell them to file their FAFSA by April 15th for the upcoming year, after they have finished
completing their taxes first," Mesonas says. Students must aim to complete their taxes early so that they can apply for aid early.
5. Paying for FAFSA or other scholarship searches: There is an issue which financial officers like Mesonas face every year
when students apply for FAFSA. Students end up going to a site: FAFSA.com, which is a private paid service that charges $80
for filling out the FAFSA. "You never want to pay any money for student aid or for scholarship searches. It's basically free
money you are trying to get," Mesonas says. "FAFSA.gov does it for free."