Applying for Student Financial Aid Quick, Easy: Tax Credits Ease Tuition Payment Crunch

US Education Department Press Releases, Feb 10, 2000

Archived: Applying for Student Financial Aid Quick, Easy: Tax Credits Ease Tuition Payment Crunch A r c h i v e d  I n f o r m a t i o n

FOR RELEASE February 10, 2000

Contact: Jane Glickman   (202) 401-1307 Stephanie Babyak   (202) 401-2311 Lisa Cain (SFA)   (202) 260-5398 APPLYING FOR STUDENT FINANCIAL AID QUICK, EASY Tax Credits Ease Tuition Payment Crunch

Millions of students applying for federal student financial aid this year will find the process easier and faster than ever before, according to the U.S. Department of Education, the nation's largest source of college student aid. In addition, tax credits of up to $1,500 per student for tuition expenses paid last year are available for 1999 federal income tax filers.

"Streamlined forms have cut paperwork significantly," said U.S. Secretary of Education Richard W. Riley, "and with electronic filing, a student's aid application can be processed in a matter of hours. Furthermore, tax credits can make college or training courses more affordable and reduce the amount of income tax families owe."

This year, an estimated $51.4 billion in federal grants, loans, and work-study opportunities will be awarded to some 8.4 million students out of 10 million applicants. Even students who are not financially needy enough to qualify for grants or federally subsidized loans are eligible for loans at interest rates lower than those offered by commercial lenders. Following are some facts that potential applicants may find useful: Applying for federal aid is free. Filling out the Free Application for Federal Student Aid (FAFSA) is the first step in the process. Students can file electronically or on a paper application. Most state and institutional aid eligibility is determined by the FAFSA, so students should start there. Students are also encouraged to talk to the financial aid directors at the schools they hope to attend to learn about financial aid packages and other sources of assistance. Students can obtain a FAFSA at high school guidance offices, libraries, or by calling the Federal Student Aid Information Center toll-free at 1-800-433-3243 (TDD 1-800-730-8913). Electronic filing is faster, less error-prone. An estimated 12 to 14 percent of paper applications are returned for errors, adding time to the application process. By filing electronically, students can avoid delays because the software immediately identifies errors and allows for on-the-spot corrections. FAFSA on the Web is now available to students to apply electronically through the Internet at www.fafsa.ed.gov FAFSA on the Web can be accessed with many popular browsers, including Netscape Navigator and Microsoft Internet Explorer. Help is available by calling the customer service hotline at 1-800-801-0576 (TDD 1-800-511-5806). Reapplying for aid simplified. Reapplying for aid is simpler than ever. Students simply add a minimal amount of new information on the 2000-2001 renewal form and update any information that has changed since 1999-2000 (family size, for example). Students can also reapply electronically by using the renewal version of FAFSA on the Web. For renewal filing over the web, students are given an electronic access code or PIN that serves as the student's signature. Parents will still have to sign if the applicant is a dependent. Check with the school financial aid administrator for questions about the renewal paper or electronic FAFSA or contact the Federal Student Aid Information Center. PIN numbers now available. The department will mail a PIN (personal identification number) to new students who apply for aid in the 2000-2001 award year. The PIN can be used to access the student's account information online, access renewal FAFSAs, and take the place of the student's signature for FAFSA on the Web applications in subsequent years. Beginning March 6, students can make corrections to an aid application through the Internet.

Other useful tips: print carefully and clearly using only blue or black ink or pencil; no other colored ink accepted; have the student's Social Security number ready; use W-2 forms and carefully estimate tax information if federal income taxes have not yet been completed; be aware of deadline dates for the schools to which you are applying. While students have an 18-month window to apply for federal aid, some schools have early filing dates for their own institutional aid that may be based on federal aid eligibility (a list of state deadlines is included in the FAFSA instructions); some schools use only the federal form. Others have a separate form for institutional aid so be sure to check with the school; do not report parents when answering the question, "how many students in the family are attending college?" but do report oneself even if attendance is less than half-time, and other family members who are enrolled in a degree or certificate program and who are enrolled at least half-time; the forms are processed by computer, so do not attach additional materials and write only in the marked spaces on the application, never in the margins; be sure to sign the application or separate signature sheet for electronic filers (except electronic renewal filers who are independent) and have a parent sign if required.