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Student loans, grants, scholarships, work-study, military benefits, national service awards. Regardless of how a family or college-bound student finances college, there is one application process that is as certain as death and taxes: the FAFSA.

FAFSA (Free Application for Federal Student Aid) is the mother of all student loan applications, covering federal and state grants, scholarships, work-study programs, and loans, and everyone needs to fill it out before your child can qualify for federal or state aid.

“Completing this application is a family’s initial step,” notes Leah Stewart, director of financial assistance at Northern Kentucky University. “Institutions will receive the results to determine a student’s grant aid eligibility and to determine how much money students can borrow.”

Adds Meredith Robinson, marketing support manager at Kentucky Higher Education Assistance Authority (KHEAA) and The Student Loan People: “All forms of financial aid are determined by the FAFSA, so it must be on file before a loan, a grant, or a scholarship can be awarded to the student.”

For instance, as a freshman, each year a student may borrow up to $2,625 through a Federal Stafford subsidized or unsubsidized loan, up to $3,500 as a sophomore, and up to $5,500 as juniors and seniors. This low-interest loan (6.8 percent) allows students enrolled at least half-time to defer repayment until six months after leaving school. For Federal Stafford unsubsidized loans, interest begins accruing upon disbursement, although students have the option to defer the interest payment. Federal PLUS Loans (Parent Loan for Undergraduate Students), where the parent is the borrower, also have a relatively low interest rate (8.5 percent). Repayment begins within 60 days after the loan has been fully disbursed.

“Need-based aid comes into play for loans in that there are two types of Stafford Loans,” says Robinson. “Subsidized loans are need-based, whereby loans are made to the student and the interest normally charged on that loan while the student is in school is paid by the federal government. Unsubsidized loans are not need-based and the student is responsible for any interest that accrues on the loan.”

Completing the FAFSA
The FAFSA form is available in January for the upcoming school year. It may be completed online at, a Web site developed by KHEAA in cooperation with the Kentucky Council on Post Secondary Education as a complete guide to attending college in Kentucky. There are built-in edits on the online application (the preferred way), thereby reducing the chance for errors or omissions. Results arrive seven to 14 days sooner than when using the paper FAFSA.

Once the form is completed and the “send” key is clicked, the application zips to a federal collection point. The EFC, or Expected Family Contribution, is then calculated and a report is sent to the student and to the school/s indicated on the form, as well as to KHEAA.

“The financial data retrieved on the form is for determining which students are eligible for grants and scholarships based on their financial need,” explains Robinson. The form is also used as a loan application, so the question that asks, “Do you want to be considered for a loan?” must be answered “yes” in order to receive loan proceeds.

Ron Anderson, director of admissions and financial aid at Asbury College in Wilmore, points out that well-managed loans are not difficult to repay after college.

“The great majority of students have no trouble at all. Asbury’s loan default rate is less than 3 percent. Loans need to be considered an investment. A student with a bachelor’s degree will earn 98 percent more over their career than a student with a high school diploma.

“There is no investment in the marketplace today with a greater return.”

More College Options
“A good fit.” That is how Bill Sallee describes his son Will’s attendance at Asbury College after discovering that filling out loan applications would greatly expand his higher education options.

“Will was able to think about attending institutions other than state universities,” says Sallee. “We had done all of our planning around the idea of a state university and, by seeing what was available through loans, it allowed us to look at smaller and private colleges we had never looked at.

“The other reason we were interested in applying for loans was that Will very much wanted to be a collegiate swimmer and those opportunities were much greater for him at a smaller, private college.”

Will, a confirmed water baby by age 5, swam for four years in high school. Being able to continue the sport at the college level was a major criterion that helped him determine which college would be the best for him.

“The loan process also enabled Will to consider going to a Christian college,” adds Sallee. “It was another benefit we found by going through the financial aid process.”

“Pursuing loan options is a very important part of the financial aid process for most families,” adds Anderson. “Government loans should be the first option (Federal Stafford Loan, Federal Perkins Loan, Federal PLUS loan), but private loans can be a great help in finding a way to pay for college.”

The Fear Factor
Unfortunately, many families don’t understand that the FAFSA is required before they can receive any type of aid. Some families think the form is to determine need-based aid and may believe they make too much money to qualify for loan assistance.

Others are not aware they are going to need any form of financial aid to help pay for college and think they don’t need to complete the FAFSA.

“It is a continuous education process for the schools, colleges, and funding agencies,” says Robinson.

Once the family sits down to complete the form, there are a few things they’ll need handy: student’s Social Security number; their own Social Security numbers; and last year’s tax returns (or, if taxes have not been filed yet, W-2 forms).

“If the student had a job and made enough money for him or her to have filed taxes, the student’s income tax information or W-2 forms are needed as well,” says Robinson. “Parents will also need to know the amounts in their checking and savings accounts and, if there are any investment properties, the net worth of those.”

Richard Dube and Danielle Pare have been through the FAFSA process twice, once with their daughter, Kim, a 2004 graduate of Northern Kentucky University, and again with their son, Kirk, who is currently in his second year at NKU.

“The FAFSA is not difficult to fill in; it is just time-consuming,” says Pare. “We did it online and it worked out well.”
Sallee agrees. “It’s FAFSA’s lengthiness that keeps it from being considered easy. The computerized form is very thorough, fairly easy to navigate—but long.”

Still, facing FAFSA and other loan applications is well worth the time and effort. For Will Sallee, it opened up opportunities he wouldn’t otherwise have.

“He’s taking advantage of a smaller college environment and opportunities,” says his father. These include a more personal relationship with career counselors, joining Asbury’s bell choir, and Will’s aforementioned spot on the swim team.

“Will is a good reflection on Asbury College,” says Anderson of the Presidential Scholar. “He embodies our slogan of academic excellence and spiritual vitality.”


To see the types of loans and other financial aid available, get more information on planning for and applying to college, and to find resources for college counseling, visit these Web sites:

Go Higher Kentucky­—
Think of this Web site as your one-stop college shop for everything you want and need to know about planning for college in Kentucky. There is a link to transfer your Go Higher Kentucky data directly to the FAFSA form at
, along with information about other loans, links to Kentucky colleges, a career center, and more.

Kentucky Council on Post Secondary Education—
The KCPSE coordinates change and improvement in Kentucky’s post-secondary education system. Click on “For Students” for resources on planning and paying for college, transferring, college majors, and adult education.

Kentucky Higher Education Assistance Authority (KHEAA)—
This public corporation and government agency, established to improve student access to higher education, administers several financial aid programs and disseminates information about higher education opportunities.

The Student Loan People—
The Student Loan People is the sister agency of the Kentucky Higher Education Assistance Authority and is the state’s only public, nonprofit student loan provider. Its mission is to promote Kentucky’s higher education opportunities by providing the lowest cost loan programs and related services.


Kentucky Higher Education Assistance Authority (KHEAA) provides a Financial Aid Checklist on its Web site,, well-worth reviewing before filling out loan applications. Here’s what they recommend:

1. Urge your parents to complete federal tax forms as early as possible. Financial information from your parents’ return and your own income tax return will be used to file the FAFSA (Free Application for Federal Student Aid). Make sure to keep a copy of each completed tax return. Filing early helps you get in line for any free financial aid grants, typically awarded on a first-come, first-served basis until funds are exhausted.

2. File the FAFSA as soon as possible after January 1. Students who file the FAFSA by March 15 have the best chance to get all the aid they may qualify for. However, some schools have priority deadlines before March 15, so be sure to check with your school’s financial aid office.

3. If you file a paper FAFSA, make sure it is filled out completely and legibly.

4. Don’t limit your options on financial aid. Check that you are interested in student loans and work-study options. You can always reject them later, but checking them will ensure you are considered for every type of financial help. If you apply for a Stafford Loan (by checking “yes” to item 27 on the FAFSA), you will get additional forms and instructions after your FAFSA has been processed.

5. Keep a copy of every financial aid form you complete. Put it in a file along with your college applications and catalogs.

6. Contact the financial aid offices of schools you are considering for any additional financial aid application forms and deadlines.


To learn why it is important to take rigorous classes in high school and how it could affect your student loan chances, click here: student loan

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