It’s that time of year when students are starting to think about applying for financial aid and submitting their Free Application for Federal Student Aid (FAFSA). Here are the top 5 mistakes that you should be sure to avoid:
Not Submitting the FAFSA at All
What?! This is just insanity. The federal government is not going to call you and ask, “Hey, do you want financial aid this year?” You’ve got to do the legwork.
Even if you believe that your financial need is not significant enough, file anyway. Previous academic accomplishments can be surprisingly rewarding, and maintaining a certain GPA often leads to grant money. Every little bit helps!
Submitting the FAFSA Late
When seeking federal financial aid, deadlines are crucial. The filing period for the FAFSA runs from January 1st to June 30th of each year. Of course, each school has its own financial aid deadline (i.e. the University of Pittsburgh has a due date of March 1st, while Slippery Rock requires FAFSA completion by April 15th). Do NOT forget this! Just as submitting early boosts your potential aid amount, applying late diminishes your chance of receiving federal money at all.
Choosing a School Based on What You Think It Costs
Sticker price is one thing; cost including aid is a whole different animal. The thing is this is a fine line. Our minds automatically think, “Well school A costs X amount, and school B costs Y amount. School B’s price is way lower, so it’s the best financial choice.”
Not necessarily. This school may have a lower base price when you do the math and add up tuition and expenses. Surprisingly, though, School A may offer more aid (possibly gift aid) because the cost is harder to cover. So don’t rule anything out on just that count.
What students need to do is look at individual school prices, consider the free aid they will get (scholarships, grants), AND factor in how much loan debt will exist upon graduation. This, dear friends, is how much the prospective education will cost you in all.
Not Understanding Student Loans
If there is any hope at all of calculating the cost of college, you MUST have a firm grasp on the finer points of loans. Different loans have different interest rates; find out what these are. The Perkins Loan has a fixed (unchanging) interest rate of 5% (very low), while the Stafford Loan is higher at 6.8% interest. Every loan is different and others have variable (changing) interest rates.
Also bear in mind when these loans come due. Most student loans provide a 6-month grace period. So, for example, repayment on a Stafford Loan begins 6 months upon graduation or a prolonged leave of absence. The Perkins Loan, as another great feature, grants borrowers a 9-month grace period. This is helpful if the employment train hasn’t quite made it to the station after the usual six months, giving borrowers more time to get funds together.
Believing That Your Financial Aid Award is Unchanging
Are you under the impression that receiving X amount this year means that you will get the same amount next year? Nope! Thanks for playing, though.
In all seriousness, students and their families must realize that financial aid is ever-changing. First year freshman, for instance, may be eligible for various aid types that upperclassmen do not receive―and no one is a freshman forever (except maybe Crazy Joe, but that’s a different story).
Remember also that FAFSA aid is based on income and expected family contribution (EFC). If there should be a sudden change in this (layoffs, job loss, reduced hours), a student’s financial aid award is likely to change from year to year.
Avoiding these top 5 FAFSA mistakes will benefit each and every student. Not only will this lead to college funding, but sidestepping these errors are some of the many solutions to understanding the financial aid process. If you are looking for more formal help, you might consider hiring a financial aid consultant. Best of luck in your endeavors to obtain student aid!
Written by Tracey Bauer, Blog Writer for Go Financial Aid, a financial aid consulting company.