New Year’s is the best day to apply for financial aid

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NEW YORK (CNNMoney) — Hoping to relax on New Year’s Day? Well if you or a family member is headed to college in 2015, that’s too bad.

January 1 is the first day students can submit the nationwide financial aid application (known as FAFSA) for the upcoming school year. Applying early is hands down the best way to maximize the amount of money a student gets to put toward college.

Here are five things you need to know about the process.

1. It’s a single application for three different kinds of aid.

This form is super important because it determines the amount of aid a student will get from the three main sources available: the federal government, state governments and schools. Funding can include loans as well as money that students don’t have to pay back, like scholarships, grants and work-study gigs.

2. The sooner you file, the more money you can get.

Some states and colleges have a finite amount of money to dole out and it’s allocated on a first-come, first-serve basis each year, according to Sallie Mae spokeswoman Martha Holler. So it’s always best to be at the front of the line.

Don’t wait for your W-2 to come in or to get your tax returns. The application can always be updated later with exact numbers, Holler said.

3. Don’t assume your family is too wealthy.

The amount of aid granted to students is largely based on income. The value of the home a family lives in and any retirement savings aren’t taken into consideration.

And keep in mind that a family with more than one student in college is actually eligible for more help. A family with two kids in school could see its expected contribution to tuition cut in half, Holler said.

4. Watch out for different deadlines.

There can be early deadlines to get state aid. The first one is in Connecticut, where families must submit the form by February 15 to be eligible for state aid.

5. There might be another form

Some states and schools require more information than this application calls for. Once the standard form is submitted, links to supplemental forms can be found on the confirmation page — but not on the confirmation email, so be careful!

The form is free to file and can be found here. Holler says it should take about 30 minutes to complete.

“A little time could translate into a lot of money,” she said.

2 comments

  • Malik Bourne (@sakurymu)

    Don’t do it! I am a teacher and I have witnessed a lot of kids go off to college too soon and fail out! Here is some advice for graduating seniors and their parents based on 15 years of observations.

    1. Make them work and pay for some of it.( they have to have some skin in the game)

    2. If they are immature and not self- reliant don’t let them go to a far off University.

    3. Have them talk to recent graduates to get advice/tips; they are much more likely to listen to them than you.

    4. A community college is a great place to save money and usually has professors who are teachers 1st unlike the research focused professors at Universities

    5. Don’t be frivolous with your cash. Consider things like $25/month car insurance (from Insurance Panda), $20/month mobile phone (TMobile), $15/month gym membership (Planet Fitness), and use apps like GasBuddy to save money in other ways. College is expensive – save for it!

    6. Speaking of which – Don’t try to “Keep up with the Jones”. This dooms kids and forces them into the student debt trap.

    7. Don’t be afraid to let them fail. If you constantly bail them out you will be doing it for the rest of their lives and they will never grow as a person.

    8. Make them aware of the differences in earning power/job availability of different majors.

    9. The military, tech school, and apprenticeships are all viable alternatives to college.

    10. Do a cost/ benefit analysis if you are going to take on significant debt make sure it’s for a valuable degree. 60k debt for a chemistry degree is ok, 60k for Art History is not.

  • keiato

    Thank you Malik Borne, your comment post was very informative. I’ve also witnessed associate’s of mine dropping out or worse. At an early age I saw the difference between do-ers and thinkers. Like you stated those with lack of maturity don’t have the necessary discipline to see all the variables. I made it to 25 with no kids and don’t want to be in debt before I decide to have any. We need skills in this growing world to live so others can survive.

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