for college: best strategies
for the year
is not nearly as complicated
as people describe it to be,"
says Dallas Martin, president
of the National Association
of Student Financial Aid Administrators.
"If you've got a copy of
your income-tax form, you should
be able to fill it out in 35
or 40 minutes max."
Paper FAFSA applications
are discouraged. The experts
recommend applying online because
it's faster. You can complete
the application for the 2007-2008
academic year after Jan. 1,
2007. But it's best to get it
in early -- within the first
two weeks of January if possible.
Many schools use the federal
form to determine how they'll
award scholarships and other
have a finite amount of dollars
to give out," Martin says.
"There's a very good chance
if you wait too long you may
miss a college's deadline to
be considered a top priority
for financial aid."
Once you fill out the FAFSA, you will get a Student Aid Report, which will list the expected family contribution toward college costs. If you don't get the report within a month, follow up to make sure there are no errors or other processing glitches.
Now you're in the running for various financial aid options. As of the 2006-2007 school year, two new federal grants are available for students who qualify for Pell Grants -- the Academic Competitiveness Grant and SMART Grant.
You may also need
loans to help foot the bill,
whether you qualify for government
grants or not. Consider that
a whopping 86 percent of Pell
Grant recipients borrow to pay
for college while 52 percent
of non-Pell recipients take
loans, according to the National
Center for Education Statistics.
If you're among
the legions who'll borrow, always
try to obtain a government loan
first. They're cheaper and more
flexible than loans from private
sources. As of July 1, 2006,
Stafford loans for students
come with fixed rates of 6.8
percent. PLUS loans for parents
are now also available to graduate
students. Some currently have
an 8.5 percent interest rate;
others, funded by the U.S. Treasury,
have rates of 6.8 percent.
Avoid private loans if possible
Private loans may seem easy
to obtain (or at least easier
than filling out that FAFSA),
but they could bury you in debt
for years to come, Martin says.
increasingly aggressive marketing
with private loans. In some
cases, lenders go directly to
consumers and offer great deals,
so people say, 'I have to take
a loan anyway. Why not here?'
But many families might have
qualified for federal loans
that have better repayment terms,
lower interest rates and better
Before you sign on the bottom line with a private lender, be sure to understand the terms and read the fine print.