Student aid application season is officially launched, and thousands of high school and college guidance offices have finally received the new federal financial aid forms. For Kim Chastang, a sophomore at University of Southern California, that means it’s time to get moving.
“I’ve been bugging my mother to get her tax information to me in a hurry,” Chastang said. “I want to get this in way before the deadline.”
Chastang, who also works in USC’s financial aid office, knows what many students don’t. Financial aid rules changed dramatically last year. Those who act quickly could benefit as a result, while those who delay are likely to miss out.
Specifically, Congress passed the Higher Education Act last July, which reauthorized many federal student aid programs, while making significant changes to the way aid is granted.
The changes were generally meant to help middle-income families who didn’t qualify under previous rules for aid but who increasingly found they couldn’t afford the rapidly escalating price of a college education.
The result is that millions of students who previously couldn’t qualify for need-based aid now can. And millions more who still aren’t deemed “needy” can get student loans that once were reserved for those whose parents earned less than $50,000.
Aid is getting scarce
The catch is that despite the liberalized rules, there’s no more money than in the past for federal financial aid. And, in many cases, there’s less money available through state, local and college programs.
Indeed, aid is getting so scarce that “coffee table talk” indicates some schools may not accept students who need a lot of financial help, said Cliff Sjogren, dean of admissions and financial aid at USC. Few schools have taken such dire measures to date, he adds. But if aid continues to evaporate, it may become standard.
For the moment, this means more students will be vying for a dwindling hoard of cash. That makes it more important than ever for students who need aid to apply early, experts say.
Those who apply before school application deadlines get “priority” consideration, says Kalman A. Chany, author of “The Princeton Review/The Student Access Guide to Paying for College.” That means they’ll have access to federal, state, local and college grants, loans and scholarships.
“If you are not in priority consideration, you are in trouble,” Chany adds. “You get only what aid is left over.” That’s usually just the federal and state money. And this year, that’s not likely to be a lot.
School deadlines vary, but usually aid applications must be in before early March. Some schools have January deadlines, Chany added, but because federal officials were slow getting out their financial aid forms this year, most schools will waive early deadlines for students who ask.
Regardless of the school deadline, students are well advised to get cracking on their applications now for several reasons. Although Congress attempted to make the application process simpler with the Higher Education bill, it has actually gotten more complex.
That’s because some schools-particularly the expensive private ones-are not going along with all of the new federal aid guidelines. So they’re making students fill out two, sometimes three, separate applications for aid-one for the federal government, one for the school and another for state aid.
Many of the questions on these various forms look similar but they’re not identical, Chany adds. So applicants have to read carefully and provide exactly what’s required. Errors can cause your aid request to be returned, in which case you may miss the priority deadline-and potentially a lot of aid.
Processing takes time
The applications are first sent to national processing centers, which run the forms through computers designed to determine aid eligibility by matching your circumstances to the financial aid formula. The centers then send your aid application and their recommendations to the colleges you’ve selected. The college matches what you need to what they have available.
In high season, the processing centers can get bogged down-just as the IRS does at tax time. That could also delay your access to aid. Additionally, if there’s a problem with your application, you want to allow plenty of time to resubmit it.
Many think they can’t apply for student aid until they fill out their tax returns since tax information is required. But that’s not true.
It is perfectly acceptable to estimate wage, dividend and capital gain information and then revise it later, Chany says. It must be revised promptly, however, because aid can be granted-but not dispensed-based on an application with income estimates, he adds.
It is particularly important to pay attention to details when filling out financial aid applications. If a mistake causes you to get less aid, you simply get less. If the mistake works in your favor, the application is returned to you. Either way, you get less money, Chany warns.
