For the six years that our daughters were in college, my husband dreaded filling out the Free Application for Federal Student Aid more than doing our income tax return. Like students in most families, though, our girls were going to need some combination of loans and scholarships to pay for college. Having your parents fill out the FAFSA was just another step on the road to a degree — like taking the PSAT and SAT, signing up for Advanced Placement courses to get ahead on coursework, filling out applications and applying for scholarships.
Even for a middle-class family like ours, though, the financial aid process seemed very murky. Our daughters were getting advice from school guidance counselors about when to do their part of the process, but their father and I felt a bit as if we were flying blind.
My husband and I both graduated from a state university decades ago with very little debt. If we found the aid process intimidating, imagine what it’s like in a family where no one has gone to college before or where the parents went to university outside of the United States.
“The financial aid process is one of the most challenging parts of applying to college,” says Fatima Montez, outreach and alumni coordinator with the San Antonio Education Partnership, a nonprofit that aims to bridge the gap between graduating high school, college and career.
In my talks with other parents, many agreed they wished we’d had a checklist or timeline of how to stay on track with the college admissions process. It turns out there is such a thing, prepared by the federal government. Also, for current and former members of the U.S. armed services and their dependents, the Gratitude Initiative offers free college and career counseling for military families, including financial aid counseling.
So although the process is daunting, there are resources to help — if you know where to look. Here are experts’ tips for navigating the financial aid process, including what you need to know, what actions you need to take when and where to find help.
Step 1: Commit to minimizing loan debt
Before you or your student begin looking at financial aid, though, here’s the very first step: Do everything you can to minimize education debt. That includes thinking about what kind of college you can really afford.
Although the mountain of student debt in the United States has led many to question the idea that a college degree will always pay for itself, a college degree can still be a good financial move — with several very important caveats. You have to graduate; you have to choose a major that will land you a good-paying job; and any student-debt payment shouldn’t exceed 20% of your discretionary after-tax income.
What is discretionary income? It’s the money left over after you pay for food, utilities, housing and other non-negotiable bills. Will there be a car payment after you graduate? That’s a non-negotiable, too.
The average student loan payment in the United States is $460 per month. To follow the 20% guideline above, that means a graduate with a $460 loan payment should have a job immediately after graduation that allows for about $2,300 in “leftover” money each month.
So, even though the rest of this article is going to tell you how and when to apply for financial aid, that definitely doesn’t mean you should accept every loan you are offered. See our guide to ways to minimize your student loan debt for helpful tips.
However, minimizing debt doesn’t mean avoiding it altogether.
“We tell families to think of it like buying a car,” says Ruben Rodriguez, director of KIPP Forward, the college and career counseling center for the KIPP network of charter schools in San Antonio. Rodriguez is also the former director of college partnerships at the Hispanic Scholarship Fund. “It’s hard to get a reliable car without getting a loan. But while a car depreciates in value, a college degree will appreciate.”
But just like most people research the cost of cars before they buy, students need to research the cost of college. Part of borrowing responsibly “is having a good idea of what you want to study so you have a good idea of the return on investment,” Rodriguez says.
Montez concurs: “While loans are something we want to avoid if possible, they are a reality for many students. If the choice is between taking out $1,000 in loans and not going to college at all, taking out the loan is probably the better choice. … Take out only what you need, but if you need it, take it. Using loan money to buy food is legitimate; using it to take a trip probably isn’t.”
Rodriguez also cautions against what may seem like a good idea to many students and families: taking a minimal course load and working part-time to help pay for college. “Financial aid runs out. If you’re only taking six hours of classes per semester, you might run out of financial aid before you graduate. And the longer it takes you to earn a degree, the more you delay earning a professional salary.”
Step 2: Do your research and stay on track
So, with the goal of minimizing debt but not necessarily eliminating it, here’s a roadmap for the important financial aid milestones, beginning with the freshman year of high school.
Beginning in 9th grade and every year in high school
- Take classwork and grades seriously starting now to maximize scholarship opportunities later. “If I could go back in time and give myself advice, I’d tell myself to take school more seriously in my freshman year,” says Montez. “My class rank and GPA could have been higher.”
- Read our article on finding little-known scholarships.
- Use this free scholarship search tool to look for scholarships you might qualify for. “You may have to wait till your senior year to do the application, but you can start doing the research before then,” says KIPP Forward’s Rodriguez. Other scholarship resources include Fastweb.com; scholarships.com; Cappex; the United Negro College Fund; the Hispanic Scholarship Fund; Questbridge, a college match program for high school seniors who have shown outstanding academic ability despite financial challenges; and MALDEF, the Mexican American Legal Defense Fund, which includes many scholarships that don’t inquire about citizenship status. There’s also ScholarshipOwl, a “freemium” service with paid options as add-ons but whose free version can help you view scholarships that might be a good match for you. And don’t forget to check with local civic organizations, a student’s employer or a parent’s employer to see if scholarships are available.
- Keep detailed notes about volunteer hours and community service: Who, what, when and where. Focus on quality rather than quantity — 100 hours at one organization instead of two hours each at 50 places.
In 10th grade
- Take the PSAT as a sophomore to practice for the test given in the junior year. The PSAT taken in the third year of high school is part of the qualifying process for the National Merit Scholarship Program, one of the best and most prestigious national scholarships. Some colleges and universities offer free tuition to National Merit Scholars. Unfortunately, there are no fee waivers for the PSAT taken in the 10th grade.
- Use your PSAT score to identify areas for improvement on the SAT. Khan Academy has teamed up with the College Board to create free, official SAT prep classes online. We identify other ways to do SAT and ACT test prep on the cheap in this article.
- Learn the lingo. Find out the difference between grants, loans, work-study programs and scholarships.
In 11th grade
- Find out when the PSAT is being given and register for it. The full acronym of the test is the PSAT/NMSQT; the NMSQT stands for “National Merit Scholarship Qualifying Test.” See the first item in the 10th-grade list about why taking this test is so important for financial aid. If paying for the registration fee is a problem, talk to your school guidance counselor. Help may be available.
- Watch a video to find out how the government can help you pay for college.
- Learn how to avoid scholarship scams and identity theft. As a general rule, there is no reason to pay anyone to help you find scholarships or financial aid. At best, people are charging you for information you can find for free; at worst, you’re opening yourself up for a scam.
- Find out when financial aid information sessions are offered at your high school and attend them. This might mean reading emails or newsletters you often ignore or making it a point to check the school’s website regularly.
- Learn about student and parent loans but remember: Just because you are offered a loan doesn’t mean you should take it.
- Some scholarship applications open now. “You want to apply for any and every scholarship you qualify for,” says Montez of the San Antonio Education Partnership. “Don’t discount yourself because you’re not the ‘perfect candidate.’ The only scholarship you know you won’t get is the one you didn’t apply for.”
The summer before senior year
- Create an FSA ID. Both the parent and the student will need to do this. The FSA ID is a user name and password used to access government financial aid information and electronically sign documents. Note: Students should not delegate the job of creating their FSA ID to their parent. It will slow down the process and cause confusion later.
- Review StudentAid.gov/fafsa to prepare for the upcoming application process.
- Start gathering financial information you’ll need to fill out the FAFSA. The FAFSA will ask for parental tax returns that were filed during the student’s junior year, not the senior year, so some of the work can start now.
In 12th grade
- Continue assembling financial information and other documents so that you can fill out the FAFSA as soon as possible after it is released.
- Find out if the schools you are applying to require the CSS or other forms in addition to the FAFSA. Montez points out that “students need to know the application process for each specific institution’s financial aid.” There are ways to get the application fee waived; check with each college to find out their policy.
- Know the total cost of attendance for your desired school. Remember, though, that the total cost of attendance is an estimate. Be prepared for differences in the actual cost, especially when it comes to items such as housing and books, Montez advises. And aid packages will probably change each year as well. Students may receive more or less aid as sophomores than they did as freshmen.
- Be ready when the FAFSA is released Oct. 1. As soon as possible after that, complete and submit it at fafsa.gov, along with any other financial aid application your chosen schools may require. “You should never pay anyone to help you fill out this application,” Montez stresses. “If you need help, there are nonprofit organizations, schools and colleges that can help.”
The following information comes straight from the FAFSA website:
State deadlines: If you plan to go to college in the fall, your state financial aid deadline is probably going to be between March and May, though some states request that you submit your FAFSA as soon as possible after Oct. 1. So in that case, if you planned to start college in the fall, you’d fill out your FAFSA nearly a year ahead of time. The FAFSA site at fafsa.gov lists many state deadlines and tells you how to find yours if it’s not listed.
College deadlines: College financial aid deadlines may be as early as February. For a college’s deadline, check the school’s website or contact its financial aid office.
In any case, completing the FAFSA as soon as possible after its release the preceding October is your surest option.
Both Montez and Rodriguez stress the importance of keeping track of individual college’s aid deadlines. Enter them into a calendar and refer to it regularly. “Every school has a priority deadline for financial aid,” Rodriguez said. “You have to be well-versed in those deadlines. You run the risk that the school may have already awarded all of its financial aid if you don’t apply by the deadline.”
- Be sure you understand how to read a financial aid letter. Letters that tell students how much financial aid they are being awarded arrive usually arrive in March and April of senior year, if the student has applied using the regular decision process. For early decision applicants, who agree to apply to only one school using that process and commit to attending if they consider the aid adequate, the aid letter comes with the offer of acceptance. This is usually in December and means that you won’t be able to compare aid letters from other schools.
The bottom line: Help is out there
If you’ve read this far, you’ve seen how complicated the financial aid process can be — but it’s a lot more manageable when you break it down into steps and follow a timeline to make sure you don’t miss out on any free money you may be eligible for.
Montez, who was a first-generation college student herself, has special empathy for others who are looking to be the first in their family with a degree. “I see doubt, fear and imposter syndrome when I talk to first-generation students who are thinking about applying to college. They wonder, ‘Can I do this?’ The answer is always ‘yes.’ From one first-generation student to another: You are never going to have to do it alone. It’s all about finding that support network.”
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- College financial aid packages: What parents need to know
- 10 things to know before you fill out the FAFSA
- Free and cheap SAT and ACT test prep
- Colleges that offer tuition discounts to siblings