Applying for Financial Aid Will Be Easier in 2010

Volunteers will help students and parents apply for aid, and form will be easier.

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Parents and students stressed about getting financial aid for college can celebrate at least a little good news at the start of 2010:

While the total amount of grants and scholarships likely to be handed out this year won't be anywhere near enough to meet most students' needs, at least it will be easier to apply for aid. The online version of the notoriously headache-producing Free Application for Federal Student Aid, which is the scholarship application used by the federal government and most states, charities, and colleges, has been streamlined and simplified. Even better: There is a growing network of volunteers who will help anyone fill out the FAFSA free of charge.

Volunteer financial aid experts will be stationed at more than 800 YMCAs, churches, colleges, schools, community centers, and other locations around the country in January and February for College Goal Sunday events. The aim of the nonprofit events: to help students and parents get their aid applications in on time. Originally, College Goal Sunday events were held the Sunday after the Super Bowl. The program has grown so much in the past few years that many states now have several events on various days throughout January and February, says Marcia Weston, director of the program, which is funded by the Lumina Foundation and operated by the YMCA. Some states, such as California, use a different name for their volunteer event. But the College Goal Sunday website lists the times and places for events in 47 states plus the District of Columbia. Some sites will also provide transportation, she says.

Most scholarship providers, such as states, charities, and colleges, ask for FAFSAs to be filed by early March. But since some aid is given out on a first-come–first-served basis, it can pay to file the FAFSA even earlier. One of the reasons it has been difficult for parents and students to file their FAFSAs early is that the form typically requires tax information. But few people file their taxes in January or February.

That's why this year, for the first time, some of the volunteers at College Goal Sunday events, including sites in Maryland and Georgia, will be tax professionals who will also help families fill out their 1040s, Weston says.

Families who don't have their taxes done and can't find a College Goal Sunday site with a tax volunteer can still complete their FAFSAs early by using estimates. They can correct their FAFSAs later with exact numbers after the file they taxes, she notes.

Whether getting help or not, applicants should prepare ahead of time by collecting their final pay stubs of 2009 and most recent tax forms. Students under the age of 24 need their parents' last pay stubs and most recent tax filings. Business owners and investors need financial documentation for those activities, as well.

Students who don't get help with their FAFSA and go online to fill out the form themselves will most likely find the process less painful this year, as the Department of Education has eliminated many redundant and confusing questions. Al Hoffman, a private financial aid adviser in New London, Conn., says the 2010 online version "is more logical, flows well," and could take only a few hours to fill out.

Unfortunately, the Department of Education did not simplify the paper version of the FAFSA, which is still longer and more complicated than a standard 1040 tax form. The government encourages all applicants to use the online FAFSA instead, but low-income families who need financial aid the most often don't have access to computers and thus have to fill out the longest and hardest form, Weston notes.

Unfortunately, even though the application may be easier, the results may be more disappointing. Many states, colleges, and charities are planning to reduce the number and size of scholarships they award in 2010.

But the FAFSA is still worth filling out because it serves as the application for the single biggest grant program in the country, the federal Pell grant, as well as low-cost federal student loans, both of which will be more attractive this year.