It's FAFSA Season - And We Have a Guide to Recommend

The Free Application for Federal Student Aid -- FAFSA -- is the universally used form for obtaining federal and other sources of student aid for college. These can include scholarships, loans, and work-study jobs. The FAFSA application is used by colleges as well as the federal and state governments -- and the new form became available on October 1st.

One very useful resource for those dealing with the FAFSA form for the first time -- and for those who have tackled it before -- is the book FAFSA: The How-To Guide for High School Students (And the Adults Who Help Them). The book is available in ten languages. -- from Arabic and Bengali to Urdu, and plenty in between. This guide is downloadable for free and has a highly accessible approach that deals with a wide array of questions that students and parents may have. It is written by college professionals and comes from UnderstandingFAFSA.org, which is a partner of the well regarded InsideSchools.org, which we have long used as a resource for information about NYC Public Schools. Both organizations operate under the nonprofit umbrella of The Center for New York City Affairs.

FAFSA Tips

Earlier this week, we shared information about scholarships available to students with learning and other disabilities. But the number of such scholarships is very limited, and most offer just a small part of the expenses a student and her family will face in college. Of far more importance is the financial aid offered by individual colleges, and the way to obtain such aid is by filing a FAFSA application.

FAFSA - the Free Application for Federal Student Aid -- is used by virtually all colleges and universities to determine whether a student qualifies for financial aid and to calculate the amount of aid each student needs. In addition, the information on the FAFSA is sent to the higher education agency of your home state and those states in which the schools you are applying to are situated. This information is used by the states when they distribute state financial aid money.

Until a couple of years ago, filing a FAFSA form posed a dilemma for most families. The form had been available each January, but it required the tax information from the tax forms that weren't due until that April. In fact, many families not only had not prepared the forms the FAFSA sought, but had not yet received the underlying tax information that they would need to complete those forms.

This dilemma was resolved beginning with the 2016-17 school year. Now, FAFSA forms are available as of October 1st each year, and the tax information required is for the preceding tax year. So, for example, for students planning to begin college in the fall of 2019, the 2019-20 FAFSA became available on October 1, 2018 and is due by by June 30, 2020. Of course, you will want to file as soon as possible (if you have not already done so). In addition to needing to know what you will be receiving before you begin college, funding is always limited and students who file earliest will have access to a bigger piece of the funding pie.

What makes it possible to have this earlier deadline is that the tax information that must be submitted is now from the prior tax year. This means that applicants submitting on or after October 2018 should submit their family tax returns from 2017, which were generally due in April 2018 and should be readily available.

The best place to get all the information you need about the FAFSA is the official FAFSA website. You can also find helpful discussions of specific topics related to your FAFSA application on the U.S. Department of Education blogs.


photo credit: Hloom Templates @ Flickr.com

Tips for National Scholarship Month

Happy National Scholarship Month! College costs are on the rise (a recent calculation from Bloomberg estimates tuition costs 1200% more than it did in 1978), but a college education is more important than ever. According to the National Center for Education Statistics, a young person with a bachelor’s degree can expect to earn about $20,000 more each year than a peer with only a high school diploma. Loans are one option, but we encourage young people to apply for as many scholarships as possible; it will cost only time, and students could end up earning substantial funds to put toward their school fees.

 courtesy pictures of money via flickr:cc

Here are some helpful tips for scholarship applications, culled from the National Scholarship Providers Association and our own research:

• Many scholarship providers send information to high school counselors. Students should visit their counselor’s office periodically to check for scholarship opportunities applicable to them.

• High school seniors should talk to representatives from the admissions or financial aid departments at their college (they may have to wait until they are accepted) to find out what kind of financial aid is available. Those who know what they’ll major In should communicate with that particular department as well; sometimes, departments will offer (or know of) scholarships available for students in certain fields of study. 

• Fill out the FAFSA as soon as it becomes available in early January (a very recent change permits using information from the prior year, allowing families to have the required information to submit earlier than in the past). Students should do this ASAP; there is evidence that those who complete the FAFSA early receive more scholarship money.

• Students should use resources like www.scholarships.com and www.fastweb.com. Local organizations like the Rotary Club, the Lions Club, community foundations, and private foundations are also good sources for scholarship information. Other websites that may be helpful are www.finaid.org and edvisors.com, for all things dealing with financial aid. 

• If a student knows what she will study or what line of work she will go into, she should look into organizations—both local and national—that may offer scholarship money to young people studying to enter particular fields. Insider tip: Local scholarships tend to award less money but a student’s odds of being awarded a local scholarship are much higher. Students should prioritize accordingly and be sure to apply for as many local or smaller scholarships as possible.

• Look into work-study opportunities, or consider a working part-time. Lots of time in college is unstructured and many students find they have time to take on a job. And studies show that students who work part-time tend to develop better time-management skills, often leading to better grades.

• Here’s another insider tip: After a student has been accepted, received his financial aid package, and been awarded any private scholarships, he should crunch some numbers to determine whether there is a large gap between amount of aid he has earned and the amount of tuition he and his family can afford to contribute. If he will not be able to afford college even with aid, he should ask his school about options for appeal. Many colleges have an appeal process that may yield more aid if a student’s campaign is successful. There is no guarantee, of course, and students should not take advantage of the system unless there is genuine need.

Finally, a cautionary note: DO NOT pay for scholarship or financial aid information. Frequently, these are scams, and even if some of these for-profit services are legitimate, there are too many free resources to make the cost worthwhile.

Don't Delay Your FAFSA

What are you doing this weekend? If you're a college-bound young adult hoping to get financial aid to help with your tuition, your answer should be "filling out the FAFSA." Nearly all schools require that students fill out a FAFSA (Free Application for Federal Student Aid) for each year that they hope to receive financial assistance. And most experts suggest that even students who aren't sure whether they qualify should submit a form just in case; after all, students who don't definitely won't get financial aid.

The form is available on January 1st every year, and while different states and colleges have different deadlines, students who fill it in early tend to be awarded more aid money. Data suggest that students who file the from between January and March, for example, receive twice as much aid money as those who wait longer! One reason is that some state grant programs operate on a first-come, first-served basis.

Students will need information from their schools, like the school's code, which is usually found on the school's Financial Aid webpage. They will also need financial information from the past year, a trickier proposition as tax forms bearing these numbers are sometimes not yet available. Those who don't want to wait, however, can use estimated financial information from past years, then update their information when they receive it.

A recent New York Times article contains additional information and resources for filling out the FAFSA. Good luck!

photo credit:401kcalculator.org via flickr

Learning Links: Recent News

Photo: monkeyatlarge

• Do Kids Really Have ‘Summer Learning Loss’? (Time Ideas)
• US Graduation Gain for Students with Learning Disabilities, but Challenges Remain (Southern California Public Radio)
• Fewer Minority Kids Diagnosed with ADHD (Reuters/Yahoo)
• Rate for Subsidized Stafford Loans Doubles (Alaska Public Media)

College Savings Day is May 29

Parenthood is full of uncertainties, but there’s one thing that parents can count on: college tuition is likely to keep rising. To spare themselves and their children from years of loan repayments, parents need to understand the many ways to save for college tuition and to reduce college costs.  There are plenty of options for saving beyond the coffee can hidden under the bed: Coverdell Education Savings Accounts (cover K-12 expenses in addition to college, and are limited to $2,000 annual contributions), standard personal savings and investment accounts (generally subject to state and federal income taxes), and 529 plans (college savings plans that are free from federal taxes) are all good options. In honor of College Savings Day on 5/29, we’ll focus this post on 529 plans. Future posts will look at other aspects of paying for college.

First, it’s important to know what costs your child will face. Take a deep breath and visit the College Cost Calculator for an estimation based on your child’s age, the type of school s/he will likely attend, and average tuition inflation.

Now that you know what you’re up against, the next step is to choose a 529 plan. All 529 plans have two things in common: they’re investment options, and they’re free from federal income tax. Most states offer several plan options, and some of them have further benefits that may make withdrawals free from state tax too, or qualify students for state grants and s
cholarships.

529 plans fall into two categories. The first, a prepaid tuition plan, is currently available in 11 states. It allows parents to buy tuition ahead of time, based on today’s costs. The money is then passed on to the college when the child enrolls down the road. This is a great option for students who know they’re going to stay in-state because it locks them into tuition rates that are almost certain to be lower. The second variety, the savings plan, is a bit more versatile. The 529 savings plan works a bit like a 401(k) retirement plan: money contributed into the account is invested, typically in mutual funds (either by a fund manager or by the account holder, depending on the plan), and can later be withdrawn for qualifying education expenses without being subject to federal taxes.

Here are some good things to know about 529s:

• While enrolling in your state’s plan may offer you particular benefits, you can enroll in any plan in any state, regardless of where you live or where your child ends up enrolling. Be sure to research all state plans to find the best one for your family. 

• Anyone can contribute to a 529, so spread the word to grandparents, aunts and uncles, etc.

• Almost all plans allow the account to be transferred to another beneficiary without penalty, so if your child is drafted to the NBA and no longer needs your help paying for college down the line, the account can become his younger sister’s college fund instead. 

• Most financial advisors recommend that parents who can afford only retirement savings or college savings choose the former. Your child can always borrow money for college, but you can’t borrow money for retirement. 

CollegeSavings.org allows visitors to research their plan options by state or by feature. Consider whether a prepaid tuition or savings plan is best for your family first, and be sure to consider other factors like the minimum initial contribution and maximum total contribution limits; state tax breaks and other state-specific benefits; and enrollment and other annual fees charged by the plan. 529 plans are considered to be assets of the parents, not the student, in calculating Expected Family Contribution for financial aid under the FAFSA form, the universally utilized calculator of college financial aid. This means that it has less of an impact when total family assets are considered.

A note about using a 401(k) or IRA retirement account as a college savings fund: Most financial advisors seem to steer people away from this option. Even though account holders can withdraw from these funds without penalties after the age of 59 1/2, the withdrawals still count as taxable income, unlike funds from a 529. Additionally, the amount withdrawn will be added to your annual income, meaning that you will fall into a higher income bracket and your child may not qualify for financial-based student aid next year.

Important Note: The information above is intended to get you started thinking about these issues -- not to be financial, investment, or accounting advice. Please see an appropriate professional for specific guidance, tailored to your family's needs.

Scholarships for Students with ADHD

We are often asked about college scholarships for students with learning or attention issues, and find it frustrating when we have to answer that such scholarships are rare indeed. So, with the deadline approaching for one such program, and several others coming up, we thought it would be a good time to take a look at this topic.

The Anne Ford Scholarship and Allegra Ford Thomas Scholarship both have an application deadline of December 31, 2012. These scholarships were established by Anne Ford, former Chairman of the Board of the National Center for Learning Disabilities and her daughter, Allegra, whose challenges with learning and related issues were chronicled in the book Laughing Allegra. The Anne Ford scholarship is an annual $2,500 award for each of  four years for a student with a documented learning disability who will be pursuing a full-time bachelor's degree. The Allegra Ford Thomas scholarship provides a one-time $2,500 award for a student who will be enrolled in a two-year community college, a vocational or technical training program, or a specialized program for students with learning disabilities.

Shire, a pharmaceutical company that manufactures medications for ADHD, will offer a $2,000 scholarship and a year of coaching to fifty students who will be attending a college, university, technical school, or vocational school. Applications are due by March 27, 2013.

Learning Ally (formerly Recording for the Blind and Dyslexic) offers the Marion Huber Learning Through Listening (LTL) awards, which provide six scholarships for students with specific learning disabilities. Applicants must be a member of Learning Ally. The awards for the three top winners are $6,000 each and three special honors winners receive $2,000 each. The deadline for the next awards is March 15, 2013.

A helpful resource for scholarships and other financial aspects of college is available on the website of the College Board. Students and parents should also become familiar with FAFSA, the Free Application for Federal Student Aid.

Photo: CC by Tax Credits