Figuring Out the Free Application for Federal Student Aid (FAFSA)

The deadline for submitting your FAFSA for the 2009-2010 school year is June 30, 2009. However, you want to get your FAFSA in as soon as possible, so you get the best financial aid awards available.

You will need to provide information about your income and assets on the FAFSA form so that your financial need can be determined.

The following documents are generally required to complete your FAFSA:

• Social Security Number


• Driver's license


• W-2 and other forms to verify income earned


• Income tax return


• Parent's income tax return


• Records showing unearned income (child support, veteran's benefits, etc.)


• Bank statements


• Business and investment records

You should keep these records with a copy of your completed FAFSA form in case you are selected for verification.

The Expected Family Contribution (EFC) determines how much your family can contribute towards your education, and is based on a number of things like income, assets, how many children are in college, etc.

The EFC calculation and is used to determine your eligibility for federal student aid and is calculated every school year.

Schools use the EFC (calculated based on information you provide on the FAFSA form) to determine your federal student aid eligibility and financial aid award.

Note: Your EFC is not the amount of money your family will have to pay for college nor is it the amount of federal student aid you will receive. It is a number used by your school to calculate the amount of need-based financial aid you are eligible to receive.

To learn more about how the EFC is calculated, please read Funding Education Beyond High School: The Guide to Federal Student Aid provided by the Federal Student Aid Information Center.

Looking for an early start on the financial aid application process?

The FAFSA4caster provides students with an early estimate of their eligibility for federal student financial assistance.

Use this FREE tool to:

* Calculate your eligibility for federal financial aid, including grants
* Reduce the time it will take to complete the Free Application for Federal Student Aid (FAFSA)

To access FAFSA4caster, visit www.fafsa4caster.ed.gov.

While the financial aid formula itself can be complicated, here are some simple steps you can take to increase your potential financial aid:

Submit your FAFSA as soon as possible. While the deadline isn't until June 30, when it comes to financial aid, the early bird definitely gets the worm. You should file your FAFSA as close to January 1 as possible, even if that means you have to estimate your income tax numbers, then file an amended FAFSA after you have your final tax return completed.

Reduce your income. The aid you qualify for is based on a large part on your income, so anything you can do to reduce your Adjusted Gross Income (your income after adjustments as reported on your tax return) can only help. You can reduce your Adjust Gross Income by making contributions to your retirement account through work or an IRA, pre-paying expenses such as state income taxes or your mortgage payment, making charitable contributions, etc. You should work with a tax professional and/or a college financial aid specialist to determine the best strategy for you.

Reduce your liquid assets. The more cash and cash equivalents you have, the less aid you will qualify for. You can reduce your cash by prepaying expenses (like your mortgage, or tuition and fees).

Get assets out of the kids' names. Investments held in your childrens' names are assessed at a higher rate than those held in the parents' names. You should transfer any investments or assets owned by the children to the parents to maximize your aid award.

These are just a few strategies. Please consult a financial aid specialist to determine the most appropriate strategies to boost your financial aid award.

You need to know if you are a dependent or not when completing the FAFSA. The reason is that dependents have to provide income and asset information for their parents as well as themselves, whereas students who qualify as independent only need to provide their own information.

Determining your dependency status isn't as easy as it sounds, so use this worksheet to determine whether you need to file as a dependent or not.

Do the terms FAFSA, EFC, SAR, plus loans, cost of attendance, etc. have your head swimming?

Never fear... FAFSAOnline.com has created a glossary to help you figure out what all these terms and acronyms mean.

For example, FAFSA is defined as:

"Free Application for Federal Student Aid (FAFSA)

This form must be filled out for you to get federal financial aid such as grants, loans, and work-study jobs. For the 2009 school year, it may be submitted beginning January 1, 2009, but some forms of aid are first come, first served. So, the sooner you apply, the better! Also, remember that the FAFSA is just an application - there is no such thing as a FAFSA loan. Federal student loans such as the Stafford loan and PLUS loan are what you apply for after filing the FAFSA."

For more definitions, explanations and tools, please visit the FAFSA Glossary at FAFSAOnline.com.