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College financial aid search must start now

Updated: May 3, 2013 12:14PM

Originally published: January 6, 2005

Looking for money? If you’re the parents of a high school senior, you’d better start your search right now -- this week -- or you’re likely to miss out on the more than $122 billion in student aid that will be handed out in the coming months. It’s first come, first served in the world of student financial aid, and with more than 13 million students applying each year, you have to act now before the money is gone.

The first step is to fill out the FAFSA form: the Free Application for Federal Student Aid. This application is used by every college and university to determine how much aid a family can expect to receive. The form is available at high school guidance offices, or online at, where you can actually file online to get an early start. FAFSA is available in both English and Spanish.

The FAFSA form is one of the most complex and intrusive documents imaginable. It asks not only about your income, but about your family assets. This is a family project, since all applicants must include parental information.

Time to share

Completing the forms involves an unusual amount of information sharing between parents and student. The most important ingredient is income for 2004, for both parents and student. And you won’t be able to arrive at the figures unless you are ready to prepare last year’s tax return, even though it is not due until April.

You’ll also need bank statements, mortgage information, driver’s license and Social Security numbers, and investment records. That’s because all of the family assets are considered when granting aid.

As I’ve noted before in this space, assets held in the student’s name weigh nearly seven times more heavily against the family in the aid formula. By the time you’re ready to fill out the forms, there’s not much juggling you can do to improve your chances. But parents of high school juniors should also download the FAFSA form now to see how they might rearrange family finances in advance.

The government is going to double check your filing, so fill out the forms carefully. Of particular importance at the moment, is the fact that the government will check on whether male students have registered with Selective Service for any potential military draft.

Your filing may also be randomly selected for further verification, requiring you to provide backup data. So keep all the information handy. And remember, you have to file every year you apply for aid, so keep your records for next year, making it easier to update your application.

A few weeks after you file, you’ll receive a Student Aid Report (SAR), which will give you the most important number in your search for aid. It’s called the Expected Family Contribution (EFC) -- the amount the government figures your family should be able to contribute to your college education.

That information will be forwarded to every school you’ve listed on the FAFSA form. The student aid office at each school uses that EFC to determine how much aid it will offer your family in the form of grants, loans, or federally subsidized student aid.

Then, each school at which you’ve been accepted will send you an offer of financial aid. You can compare offers between schools, and even -- politely -- suggest to the college financial office that you’d really like to attend, but you might have to go elsewhere because you’ve been offered more financial aid.

Of course, financial aid based on need isn’t your only resource for college money. There are plenty of grants and scholarships not based on need. You can research them at www. And parents can take out PLUS loans, which are not based on need.

Treasure hunt

Finding money for college is the biggest treasure hunt of all. And if you don’t search, you won’t find. Don’t be intimidated by the cost of well-known colleges. Apply, and if they want you, they’ll find the money to help you attend.

You’re certain to have questions about the entire process. So let me recommend one of the most useful sites on the Web:, where students and parents can learn about every aspect of financing college.

College is an investment worth making, because workers without a college degree almost invariably earn less than those with one.

Financial aid will leverage your investment. And that’s The Savage Truth.

Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.

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