Take First Step to Apply for College Financial Aid

If your child will be heading to college next fall, now is the time to prepare for applying for financial aid.

Your first step is to know what type of financial aid applications you will have to complete.

Students won't be eligible for financial aid unless they complete the Free Application for Federal Student Aid or FAFSA. Filling out the FAFSA is a must for anyone who hopes to receive financial help from federal or state programs, as well as need-based aid from colleges themselves.

[Find ways to get the best financial aid package.]

The CSS/Financial aid PROFILE is the other financial aid form that you may need to complete. About 270 mostly selective private colleges and universities use the PROFILE. Schools depend on the PROFILE to award their own institutional student aid.

The earliest that you can fill out the 2012-2013 FAFSA will be January 1, which is always the day that the new FAFSA is released. While you are waiting for the new application, you should obtain your FAFSA PIN. A parent and the student must each obtain a PIN, which will be necessary to electronically sign the FAFSA form and retrieve the family's financial aid records.

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To complete the PROFILE, you must register with the College Board. (You have one if you've taken the SAT.) You do not have to wait until January 1 or later to register for the PROFILE. In fact, some schools will require the submission of this form before the end of 2011. Ask the schools where you are applying when their financial aid deadline is because you absolutely don't want to miss the deadline.

Failing to file your aid applications on time can jeopardize your financial aid award. If you have applied to a school through early decision or early action, you are more likely to have to file your aid forms weeks or even months before students who submit their college applications through the regular decision process.

If you must submit the PROFILE early, you will have to estimate your 2011 taxes. Once you've filed your federal taxes, you can revise the PROFILE. What's more, many colleges will request a copy of your completed 2011 income tax return to check your figures.

[Get more advice on how to pay for college.]

To prepare for the FAFSA's questions that you must answer when you see the actual financial aid application, you can download the FAFSA worksheet. The FAFSA worksheet for the 2012-2013 school year isn't available yet, but you can check out the 2011-2012 version, which is similar.

The bottom line: one of the best ways to cut the cost of college is to complete all the necessary aid forms and to make sure they are accurate and on time.