Financial Aid in a Flash

What is federal student aid? It’s money from the federal government—specifically, the U.S. Department of Education—that helps you pay for college expenses.  More than $150 billion in federal student aid is available through grants, work-study, and loans every year.

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Financial Aid for college education is awarded by the federal government and administered, sometimes along with institutional grants, by public and private two-year and four-year colleges and universities.  Complex rules exist regarding the awarding, disbursing, and administration of federal and state funding; the amount of aid awarded is determined by various factors including the economic profiles of students and their families, the discretion of the individual colleges, and the competitiveness of the student’s application for admission.

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Forms are completed on-line, delivered electronically, and reviewed by the Department of Education and developed by the colleges.  Recently, the Department of Education linked the FAFSA to the IRS data base in which FAFSA files can upload their tax return data directly to the FAFSA.

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FLASHCARD NUMBER 4

Supporting documentation (tax forms) which some institutions require from 100 percent of their applicants, or at least 30 percent under federal guidelines, are often submitted electronically through the College Board’s Institutional Documentation (IDOC) service.

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Each October 1, the FAFSA is available and free to fill out. The online application can be completed at www.fafsa.ed.gov  (Do not fill out any forms if there is a monetary charge attached.  This is a FREE service.) Your selected colleges will refer to this form when awarding their financial aid packages. Keep in mind, monetary support is granted on a first come, first served basis so the earlier you complete an accurate form the better.

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Students must complete/renew the FAFSA each year they apply for federal and state financial aid. Any information that has changed must be updated annually. The FAFSA collects information on student’s (and his or her family’s) income, assets, number of people in the household supported by the family income, number of family members in college, and assets (not including retirement assets and 401(k) funds or the family’s primary residence).

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