If you think your student's college financial-aid paperwork reads like a Greek 101 exam, you are not alone. Sorting through the Free Application for Federal Student Aid (FAFSA) form can be cumbersome at best and an incomprehensible nightmare at worst.
If you haven't filed a FAFSA yet, get on it. This form must be completed if you want your son or daughter to be eligible for federal and state aid. A lot of aid is distributed on a first-come, first-served basis, so the sooner you file the better.
After filing, you will receive a Student Aid Report (SAR). Your SAR is also available online at the FAFSA Website.
This report summarizes the information submitted on the FAFSA and lists your expected family contribution (EFC), which is the amount of money the government expects your family to pay in college education costs. The EFC is used to determine your student's eligibility for federal student aid.
Be sure to be sitting down when you open that envelope; the money you'll have left after the EFC is deducted won't be too far from the poverty thresholds determined by the Department of Health and Human Services.
Check your numbersThe first thing to do is make sure the information on the SAR is complete and correct. In case of an error, resubmit the form to the central processor as soon as possible. Corrections will go through in a couple of weeks, and each college that your student applied to will have access to the updated information.
Folks who estimated their earnings may need to re-submit the form if their guesses were too far off. A quick glance at your W-2 form should tell you how close your estimate came. Most folks shouldn't have a problem since their final pay stub of the year shows how much they've earned.
Acceptance and aid timetableColleges and universities start sending out admission acceptance letters in March and financial-aid award notices come close behind. Expect a financial-aid award letter to arrive within two weeks of an acceptance letter. Many schools send out acceptance and aid notifications on the same day.
In a financial-aid package a college or university will try to make up the difference between the cost of attending their school and a family's expected contribution as spelled out in a SAR report. Some succeed better than others. Three schools with similar costs may offer very different financial-aid packages.
Much depends on a student's academic credentials, a family's financial need and how much aid is available from a school. Private schools tend to have deeper pockets than state schools. Many middle-class families may find themselves in a tough spot. They have too much money to qualify for need-based aid, but too little money to cover college costs on their own. So parents or students -- or both -- take out loans.