Angela K. Love
Personal + Business Finance Consultant

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College and FAFSA

As high school students near their junior year, they begin to consider colleges.  Several articles recommend students narrow their choices to their top five to eight.  One of the critical issues for attending college is financial aid.  Financial aid is awarded to thousands of students each year to attend college. 

Many colleges are part of the Federal Student Aid (FSA) program which is operated by the U.S. Department of Education (DOE).  Each year colleges students complete a Free Application for Student Aid (FAFSA) application to apply for financial aid which comes in the form of scholarships, grants, work-study, and loans.  Students work, and parents often contribute when financial aid does not meet the full college costs. 

Completing the FAFSA used to be completed by the end of February each year.  Tax returns for the previous year were used to complete the application.  For instance, when completing the FAFSA in February 2013, tax information from the 2012 tax return was entered. 

FAFSA moved the application date to October due to many people using the extension deadline, which is in October.  Now, the FAFSA requires tax information for the current year to be entered.  For example, completing the FAFSA this year (2017) in October means data from the 2017 tax return should be entered. 

Most private colleges and universities do not affiliate with the FSA program.  Other financial aid options and programs are available through these schools.  Many students obtain student loans through Sallie Mae, Wells Fargo, and their local financial institutions when their college does not participate in FSA.

An important matter to consider regarding student deferment is understanding which colleges participate in the FSA program and which do not.  Not understanding this can cause problems for some students in the long-run.  For example, if a student attends a public, four-year college, obtains a Federal Student Loan and then attends a private college which does not participate in the FSA program, their student loan may not be eligible for in-school deferment.  The DOE only considers colleges affiliated with the FSA program as approved colleges for an in-school deferment. 

If someone decides to go directly into a graduate program at a private college after graduating with his or her undergraduate degree, he or she may be shocked when they have to start making loan payments on their Federal Student Loan if they were expecting their loans to be deferred.  The same can also happen if a student transfer from a public institution to a public one.  If in-school deferment is expected, it is a good idea to check with FSA to make sure the next college of choice is approved, and in-school deferment will be approved. 

Also, each year a student loan is granted, a new loan with new terms is created.  If a student obtains loans all four years of college, they could graduate with four student loans.  Typically, one payment is due for all student loans.  Of course, getting through college with a degree and no or limited student loans is ideal.

A College and FAFSA Workbook is available for free to assist students and parents with organizing and planning for college.  The workbook is offered in both fillable PDF and Excel format on the PAFS website.  The College and FAFSA Workbook contains 10 College Profile worksheets; a List of Colleges At-a-Glance worksheet; a College Cost Comparison worksheet; and, a College Budget worksheet.  More information about the workbook is given in the workbooks.