A Parent's Guide to Financial Aid (continued)

The Nuts And Bolts: How To Apply

Now that you know how financial aid works, it's time to get down to the nitty-gritty of applying.

The FAFSA

Every college in the United States requires financial aid applicants to file the FAFSA (Free Application for Federal Student Aid). Filing the FAFSA makes your family eligible to be considered for financial aid from the federal government, including Pell Grants, Perkins Loans, Federal Work-Study, Stafford Loans (loaned to your child), and PLUS Loans (loaned to you, the parent). All of these programs are based on your child's EFC and/or demonstrated financial needs.

You/your child can fill out the FAFSA online at FAFSA on the Web or get a paper application at high school guidance offices and college financial aid offices. The form for the next academic year is generally available in November or December of the preceding year.

Each college sets its own deadline regarding financial aid, but it is in your child's best interests to file the FAFSA (and any other required forms) as early as possible. Colleges have a finite amount of money budgeted for financial aid. Students who file later risk receiving less aid as colleges approach their budget limits.

"The early bird gets the money—don't delay filing," says Richard Adam, college advisor for Albuquerque Academy (NM).

The ideal way to complete the FAFSA is with numbers taken from your completed federal income tax return. But few taxpayers habitually complete their income tax by February (which is when some colleges have their priority financial aid deadlines). If you have the discipline and the information to complete your tax return early (even if you don't actually send the return to the IRS until April 15), you can cut out a few steps in the process.

But it is so important to apply early that financial aid experts advise parents to go ahead and file the FAFSA with estimated numbers, even if their tax returns are not complete. Then, when you have the exact numbers, you can make revisions to the FAFSA.

The FAFSA allows your child to list up to six colleges to which he or she wishes financial aid information to be sent. Be sure to file the FAFSA early enough to meet those schools' deadlines (which are different from the deadline listed on the FAFSA itself).

A few weeks after you file the FAFSA, your child will receive a Student Aid Report (SAR). If the FAFSA was completed correctly and signed, the SAR will show your child's EFC under the federal methodology. Check the SAR carefully for errors, make any needed corrections and send it back to the address indicated on the form. This is also the time to replace estimates with "real" numbers, if possible.

Other forms

Some colleges require other forms in addition to the FAFSA. It's a good idea to check with the financial aid office of each college your child is considering to find out which forms are required.

One common supplemental form is the CSS/Profile, administered by the College Board. Unlike the FAFSA, the Profile requires processing fees. (The College Board will consider fee waivers in the event of financial hardship. Check with your child's guidance office or college financial aid office for details.)