One thing that I was pretty confused about when I was getting ready for college was the

whole FAFSA thing.

For a refresher on FAFSA, check out the article I wrote called, “What is FAFSA ?”.  It just gives you the rundown on stuff you need to know about the FAFSA… worth a quick read.

Anyhow, the thing I was confused about the most with the whole FAFSA thing was… how does FAFSA turn into financial aid?

After 4 years of learning the ropes, I’ve learned a ton about FAFSA that I wish I would have known before I went off to college.

So, I created a little “Top 5″ list of the Top 10 Ways to NOT Get FAFSA aid.  On one of these, I learned the hard way and actually lost out on over $1,000 in my Sophomore year for scholarships.

Here we go:

The Top 5 Ways to NOT Get FAFSA Aid -

1. Don’t fill out the FAFSA application at all: This one sounds stupid, but one of my friends (Jake… you know who you are, lol) for some reason thought that he only had to fill out the FAFSA once… for ALL 4 YEARS OF COLLEGE.As you can imagine… come his sophomore year when he was looking at the Financial Aid that the college offered him… he about swallowed his tounge.  Long story short, Jake didn’t get his FAFSA in in time that year… and missed out a some great work study and student loan programs.  So, FILL OUT THE FAFSA EVERY YEAR!
2. Fill out the FAFSA application TOO LATE for your school: Every college has their own deadlines for when the FAFSA application needs to be in… in order to be considered for certain financial aid (scholarships, student loans, work study, etc.).  Some colleges need everything in by January each year… while others stretch it all the way back to March or April.  Check with your financial aid office to make sure… and get it in BEFORE the deadline.In fact, it’s always best to do the FAFSA application as soon as you can in January each year because some of the work study and scholarships/grants are gone once enough qualified people are accepted.  For instance, every year I had a foundation scholarship that I won for 4 years… but they had a deadline for something like March 20th (I may be making that date up for the FAFSA application to be in.  If I didn’t get it in by then… tough luck for me.  So, write in your calendar to get the FAFSA in early every year to give yourself the best chance for getting great FAFSA financial aid.
3. Being TOO GENEROUS on the income and assets portion: This one is a bit of a gray area.  You want to be sure to be honest on your application… you are telling the government that everything in it is true “to your knowledge”.  However, the FAFSA isn’t the place to go bragging about how rich you or your parents are.  Don’t inflate numbers to sound cool to the FAFSA people. Remember, the FAFSA helps determine your financial need for college.  If you inflate numbers for some reason… it’ll show that you have less of a financial need… and result in less grants, scholarships, student loans, work study… you get the idea.So, when doing your FAFSA, be honest… but be humble at the same time.  Do you think the FAFSA god’s will get all CSI on you to find every last bit of income or assets?  The odds are slim… but don’t tread into shark infested waters and completely lie on your application.  All I can say is… be honest and humble with your income and asset reporting… take that for what it’s worth.
4. Sending the FAFSA to the wrong colleges: This one is kind of a no brainer too.  But, I’ve seen it done.  I had a buddy on the baseball team with me (not the brightest fish in the pond) who didn’t think he’d end up at our college… so he didn’t have the FAFSA sent to our college. Anyhow, long story short… there was a big fiasco of having to redo some FAFSA stuff… get it sent to the college… get them to bend a few rules… etc.  So, moral here is to make sure that every college you apply to is on your list to have the FAFSA sent there.  This is done over at the FAFSA website in your account area… so check it out.
5. Have a huge investment account in your name: This is one that my fiance knows well.  Her parents did the right thing and saved up a bunch of money over the years for her in an investment account.  When we were freshmen, I think the account had something like $25,000 (give or take) in it.  Of course, FAFSA asks for these types of accounts… so you have to tell the “truth” and include them in the application. As you can imagine, this account really reduced the amount of financial aid available to her.  In reality, that account was set up to be available for her as starting money after college… she had great grades and actually had 100% of her school paid for with college scholarships also.  But, if she didn’t have great grades… FAFSA would look at this as money available to her to spend on college… which wasn’t what the account was initially set up for.So, I know of people who are clever in the way these types of accounts are set up.  It’s nothing illegal or shady… just smart asset protection.  One friend’s parents actually have the account in his grandma’s name… which she of course agreed to and has agreed to distribute it when he turns 25.  So, the parents add money to the fund over the years… it stays out of the students name and the parents name… and he doesn’t get the whack from FAFSA saying that the money is available for college.  Pretty smart. Of course, there are some tax issues involved here to work out between my buddy and his grandma… but in some cases it’s well worth it.

I know, these “Top 5″ tips aren’t rocket science… but I can guarantee you that there are thousands of college students every year that fall prey to one or more of these rules.  So, the main thing to remember about the FAFSA to ensure that you get great FAFSA financial aid is to apply early every year… and to be honest… but keep your assets and income as low as legally possible… this isn’t the place to brag about the $500 in under the table income you earned from mowing your grandma’s lawn.

Good luck and I’ll chat with you later!