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When Should You Submit Your FAFSA form?

Parents and students have until June 30th to fill out the Free Application for Federal Student Aid (FAFSA) for the 2017-2018 school year. The start date for filling out the form was moved up by three months this year (to October 1st) to allow people to get an earlier start. Also, beginning this year, the student and family must report income information from the previous full tax year (2015).
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There are typically three key deadlines for financial aid applicants: school, state, and federal. School deadlines are typically first. Since college applications typically start in the fall, you can now fill out the FAFSA along with your application. States deadlines can vary, but it is best to get in the application as soon as you can since some states will provide aid on a first come, first serve basis. You can find each state’s deadlines on the government’s FAFSA site. There is no clear advantage on timing for the federal deadline, but since aid could run out from schools or states, it is best to get in your FAFSA early.
 

How to Maximize the Amount of Financial Aid Your Receive?

FAFSA considers the income and assets of the student and parents, size of household, and the number of children attending college to determine a student’s expected family contribution (EFC). For dependent students, the parents’ income is the largest factor for the aid calculation, but distributions from retirement and investments accounts are also a factor.

A maximum of 5.64% of parent assets (including student-owned 529 plans) can be counted toward a student’s Effective Family Contribution. This is typically advantageous because a student’s assets are counted at 20%, and a higher EFC results in less financial aid. Assets held in a 529 account owned by a grandparent, relative, or anyone else besides the student or one of their parents will have no effect on the student’s FAFSA.

It’s also good to think about how this year’s 529 distributions could affect future years. Distributions from a student-owned or parent-owned 529 account to pay for this year’s college expenses are not included as income in the following year’s financial aid eligibility. However, distributions to the student from a 529 plan owned by a non-parent, such as a grandparent or relative, are considered income for the student. A good strategy is to use the funds in a parent-owned 529 plan before a grandparent or relative-owned plan.

Summary

Families with students attending college this fall should fill out the FAFSA as soon as possible to ensure they’re not missing out on any aid opportunities. If your family started investing in 529 plans early on, ensure that you’re minimizing the Effective Family Contribution to get the most from available financial aid.
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Scholarships can also be a great resource, and student loans can fill in the gap. Luckily the current rate for federal loans for undergrads are fairly low at 4.45%, and there are many scholarships available through schools, companies, and public resources. You should also apply for  the Student Loans Guy Scholarship.
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