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Cheat Sheet

Free $ For College For Dummies

From Free $ For College For Dummies by David Rosen, Caryn Mladen

If you’re looking for free money to help pay for college, you need to know what forms you need to fill out and what types of aid are available — and you need to be prepared to fill out any number of applications. And, you’re never to young to be aware that some people are in the college-aid business to take money from you and make money for themselves, so develop some savvy about when it’s okay to share personal information and when it’s not.

Federal Financial Aid Options for College Students

If you’re a soon-to-be college student looking for free money, you may want to familiarize yourself with the major categories of federal student aid. The following list describes the forms you fill out, the form you receive and some of the forms of aid available:

  • FAFSA: Completing the Free Application for Federal Student Aid (FAFSA) is the first step in getting financial aid. Not only is the FAFSA a requirement for all federal aid, but it is also mandatory for most state and college aid as well.

    The amount of your Pell Grant is calculated by the information you provide on your FAFSA. You typically submit an initial FAFSA at the beginning of your senior year (after January 1 and before June 30 in the year you plan to attend). Each school year thereafter, you send in a FAFSA renewal outlining your current financial condition.

    Unless you send in your renewal, you won’t be eligible for federal student aid (and, possibly state aid as well) for the particular year.

    The information you provide on the FAFSA is used to calculate your expected family contribution (EFC). In turn, your EFC determines your eligibility for numerous other need-based aid programs, including other federal programs, state-based programs, and college-based aid. You can complete the FAFSA online or use the paper version available from your high school counselor or the Department of Education.

  • SAR: You’ll receive a form called the Student Aid Report (SAR) a few weeks after you submit your FAFSA. The SAR gives you a chance to correct, change, or fine-tune the answers you provided in your FAFSA. The SAR also notes your EFC.

    The lower your EFC, the better your chances for financial aid. Your Pell Grant amount is noted on your SAR. If your financial situation has materially changed since you originally applied — whether it has improved or worsened — you’re required to update your information and send it back to the government so that it can generate a new EFC and possibly adjust your Pell Grant amount.

  • FSEOG: If you have extreme need (a particularly low EFC), you may be eligible for a Federal Supplemental Educational Opportunity Grant (FSEOG). Unlike Pell Grants, which are guaranteed to be available to all eligible students by the U.S. government, FSEOG money is limited on a most-needed, first-come-first-served basis.

    Not all colleges participate in the FSEOG program. Whether it’s simply more administrative hassle for the college or the changeable nature of FSEOG funding (causing periodic crises), many schools don’t offer FSEOG-based funds. Find out well ahead of aid deadlines whether each college on your wish list offers FSEOG money.

  • Consolidation loans: Like Stafford and PLUS Loans, federal consolidation loans are available in two different varieties: Direct Consolidation Loans and FFEL Consolidation Loans. Consolidation loans help students (and parents) streamline college loans by combining several types of loans — sometimes even if they have different re-payment schedules — into one, easy-to-understand, and (hopefully) easy-to-repay loan.

  • Federal Perkins Loans: Campus-based, Federal Perkins Loans are low-interest loans that are available to both undergraduate and graduate students. Undergraduates can borrow up to $4,000 for each year of undergraduate study, and graduate students can borrow up to $6,000 per year.

  • Federal Work-Study: This campus-based program provides on-campus jobs for undergraduate and graduate students with demonstrated financial need. Ideally, your college tries to find you a job that’s related to your academic program.

  • PLUS Loans: PLUS Loans are loans to parents, and these loans come in two varieties: Direct PLUS Loans and FFEL PLUS Loans. PLUS Loans let parents who have a good credit history borrow enough money to pay the education expenses of their dependent children.

  • Stafford Loans: Stafford Loans (in the form of Direct Stafford Loans and FFEL Stafford Loans) are a major source of financial aid for students attending college. As you can probably guess from the word loan, Stafford Loans are supposed to be repaid — although, sometimes, repayment can be postponed or, in certain cases, the entire loan can be completely discharged or cancelled.

Tips for College Scholarship Applications

Getting free money to help pay for college is a worthy ambition and an achievable goal. Just bear in mind that you have to spend some time filling out scholarship applications. Keep the following tips in mind as you put pen — or keyboard — to application.

  • Apply for as many scholarships and grants as you can reasonably handle. Nobody checks to find out if you’ve applied elsewhere, so for the price of postage you might win some cash.

  • When preparing the applications, put yourself in the shoes of the people giving out the money. What would make a winning application for them?

  • Be organized. You can reuse application essays and other materials over and over again, sometimes with only slight modifications, so keep everything where you can find it again easily.

  • Never lie or mislead on your application; they usually check. Even if they don’t, it’s not the right thing to do.

  • Be on time. You may be the most qualified applicant or demonstrate the most need, but if you apply after the deadline or after the money has run out, you’re not getting the cash.

How to Protect Yourself from College-Aid Scams

As you fill out applications looking for free money for college, you may encounter some people and organizations trying to take money away from you rather than help you pay for your education. Following are a few tips that can help you reduce your chances of getting scammed by a fake scholarship companies:

  • Never, ever give your personal information (such as date of birth, Social Security Number, address, credit-card info) until you have done extensive background checks on the company or organization. Just because an organization has a great looking Web site, for example, doesn’t mean that it isn’t operating out of a trailer somewhere.

  • Always check the background of the company or organization extensively. An extensive check includes checking with the Federal Trade Commission, local police, local chamber of commerce, the state consumer business office, and the Better Business Bureau.

  • Conduct a search for the organization on the Internet using a large search engine such as Google or AltaVista. If others have been scammed by a particular organization, they may set up a Web site informing others about their experiences.

  • Ask the organization how it found you. If the organization doesn’t have a reasonable answer, stop dealing with it. Even when the answer sounds reasonable, the organization may still be lying. Double-check with the original source: Did it forward your name to the scholarship organization in question? Why?

  • Never deal with an organization unless it has a physical location. Even online colleges have physical offices. The picture of that huge building you see on an organization’s Web site may well be someone else’s building.

  • Never send anyone money in any form, even as a guarantee to hold your place unless you’ve confirmed with the appropriate governing body that the organization in question is legitimate. Always ask yourself: If this organization claims it’ll give me money, then why does it need my money first?

  • Assume it’s a scam and walk away or hang up the phone whenever the situation feels wrong or you feel pushed in any way. No legitimate scholarship requires you to respond immediately or risk losing out.

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