How to Save Money and Time Completing the FAFSA

(ARA) - Financing a college education is becoming increasingly difficult for many Americans, making competition for grants, loans, work-study, scholarships and institutional financial aid more intense than ever. Incorporating a little strategy and planning can increase your family’s chances of receiving federal student aid and create more time for finding other ways to save money for college.

Any student requesting federal financial aid is required to complete the Free Application for Federal Student Aid (FAFSA) each year. FAFSA information is used by Federal Student Aid to calculate the expected family contribution, which is subtracted from the cost of attendance at the school(s) a student plans to attend. That amount determines a family’s eligibility for federal aid.

FAFSAs for the 2008-2009 academic year are being accepted between January 1 and midnight Central Standard Time, June 30, 2009. However, don’t wait until the last minute because federal aid is awarded on a first-come, first-served basis. In addition, most states and schools use FAFSA information to award their financial aid. Note that schools and states often have their own forms and deadlines.

Following a few simple pre-planning steps will help you complete the FAFSA more easily and faster, ensure your information is accurate and complete, and ideally save you thousands of dollars.

First, read and complete the FAFSA questions in advance at www.fafsa.ed.gov. Federal Student Aid estimates that first-time users will need less than an hour to complete the worksheet; however, it will take less time if you come prepared with all of the necessary information.

If you haven’t already, complete your 2008 tax returns. Federal Student Aid recommends that you do your taxes before completing the FAFSA because you must report your income earned in the previous year. You can save time by using certain tax preparation software programs that allow you to automatically transfer your tax data into an online FAFSA worksheet. "The College Student Financial Aid Worksheet in TaxACT Deluxe eliminates time and effort involved with completing a FAFSA worksheet," explains Leigh Aragon, spokeswomen for 2nd Story Software, Inc., makers of TaxACT. "Other features also help identify tax credits, deductions and strategies that can reduce a family’s income."

The higher a family’s cash assets and adjusted gross income, the less government assistance a family will receive. So, in addition to consulting your personal attorney or accountant, Aragon also suggests taking the following measures throughout the year in order to maximize your 2009 tax deductions.

* Contribute as much as you can to your retirement savings account.
* Prepay state taxes before the end of the year.
* Contribute to a flexible benefits plan.
* Make energy efficient improvements to your house.
* Pay down or pay off loans and bills.
* Sell bad investments by December 31.

Third, gather your tax returns, Social Security Number, driver’s license, bank statements and investment records. You’ll want these documents for reference only; you do not need to mail them to Federal Student Aid.

If you intend to complete the online FAFSA worksheet, apply for a PIN. A PIN will give you free access to your information on the www.fasfa.ed.gov Web site and allow you to electronically sign your FAFSA. Since your worksheet cannot be processed until it is signed, completing the free online worksheet and signing it electronically is by far the fastest way to submit.

Following these easy steps will help simplify and quicken the process of filling out the FAFSA, as well as increase your odds of obtaining the most Federal financial aid for 2008-2009 and in years ahead.

To learn more about FAFSA, visit www.fafsa.ed.gov.

Courtesy of ARAcontent