Graduate and undergraduate students seeking financial aid must fill out the FAFSA: Free Application for Federal Student Aid. The FAFSA is need-based, meaning the amount of aid students receive is dependent upon their financial situation, not their grades or achievements. FAFSA has a few quirks that savvy students can take advantage of in order to increase their likelihood of getting the money they need for their education.
1. Report Assets Today
The FAFSA asks students what the grand total of their savings account, checking account, and cash is today. Not yesterday, not this week, not this month — today. Consider this when filing your FAFSA.
For example: You have $100 in savings and $0 in checking on Thursday. You receive a paycheck for $1,000 on Friday and deposit it. You transfer $100 to savings and leave $900 in checking over the weekend. On Monday, you pay $800 worth of bills. Tuesday, you have a grand total of $200 in savings and $100 in checking. In this example, if you were unable to get your FAFSA filed on the previous Thursday, you should wait until the following Tuesday when you have less money to file your FAFSA.
2. Work Study
Any monies earned via a work-study job are not taken into consideration by FAFSA. Therefore, if you need to work and are seeking financial aid, you may be best off taking a work-study job. The FAFSA form asks applicants if they are interested in work-study positions, and filling out the FAFSA is required if you want a work-study job.
Work-study students receive paychecks for their work. Earnings from other work may impact your chances of receiving financial aid, but monies earned via work-study will not.
3. Retirement Assets
FAFSA does not take retirement assets into account, either. Any monies you can stash away into a ROTH IRA will not affect your chances of receiving the financial aid you need for school. You will not need to hurt your retirement plans in order to pay for school.
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