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Unless you plan on paying for your college education out-of-pocket, completing the Free Application for Federal Student Aid (more commonly known as the FAFSA) is essential in your quest for financial aid. For the uninitiated, the FAFSA is used by the Department of Education to determine your eligibility for federal student financial aid for college, including the Pell Grant, federal work-student programs and federal student loans. And while most students struggle with the complicated application process, LGBT students potentially face more serious roadblocks: According to U.S. News & World Report, name changes, gender identification and strained family relationships can present unique FAFSA challenges.

In 2012, sexual orientation and gender identity were the number one reason for youth homelessness in the U.S., notes Thomas Krever, chief executive officer of the Hetrick-Martin Institute. Almost 40 percent of homeless youth identified as LGBT and of those teens, 46 percent ran away because their family rejected their sexual orientation or gender identity. What does this have to do with the FAFSA? Students under the age of 24 need tax returns and bank statements from their parents in order to file for financial aid and those without family support are left in limbo. Other LGBT students struggle with the fact that the FAFSA doesn’t necessarily reflect their identity. Questions about name and gender can be enough to keep transgender teens from even applying, says Eli Erlick, founder of Trans Student Equality Resources. "One thing about funding, specifically FAFSA, is that transgender students may not be able to change their name due to parents not being supportive or not having the money to do so," says Erlick. "This can lead to transgender students being nervous to apply, or not even applying at all, because they're scared for their own safety, because using these forms with their legal names may out them." (For more on this story, click here.)

What do you think about the challenges LGBT students face when seeking financial aid? Can you think of something the government can do to ease this pressure?

Though it’s a day off from school and work, New Year’s Day is also a day to get down to business. While you’re starting in on your New Year’s resolutions, opening up a new calendar, and packing up the holiday decorations, there’s one more thing that college students and college-bound high school students should do each January. The Department of Education starts accepting the Free Application for Federal Student Aid (more commonly known as "FAFSA") on January 1 each year. State application deadlines fall soon after—as early as February in some cases. So while you might not start classes until August or September, you want to start applying for financial aid as soon as the FAFSA is available each year.

In order to complete a FAFSA, you will need the following:

• your social security number
• a driver’s license if you have one
• bank statements and records of investments (if you have any)
• records of untaxed income (again, if you have any)
• your most recent tax return and W2s (2012 for the 2013-2014 FAFSA)
• all of the above for your parents if you are considered a dependent
• a PIN to sign electronically (go to pin.ed.gov to get one)

Figuring out how you're going to pay for your college education can be daunting. And while no one would argue that filling out the FAFSA is an important piece of the financial aid puzzle, it seems that some colleges might be making the process more complicated...and costly.

Rep. Elijah E. Cummings of Maryland alleged this week that more than 100 universities – including dozens of elite and Ivy League institutions – may be violating the law by telling potential applicants that they have to spend money filling out an unnecessary form. In a letter to U.S. Education Secretary Arne Duncan, Cummings said 111 universities required a financial aid form developed by the College Board to be considered for any financial aid. Fifty-eight of the schools told applicants that they had to submit the $25 PROFILE form "in order to secure any type of financial aid, including federal student aid," Cummings wrote. The other 53 directed applicants to "submit both the FAFSA and the PROFILE to obtain federal financial aid, although they do not clarify what each form is used to assess." And while Cummings insists that these schools appear to be in violation of the Higher Education Act, some college officials have defended their use of PROFILE, stating that because it takes into account factors the FAFSA doesn't — like home equity and some business income — it allows universities to make fairer decisions on who needs aid the most. Meanwhile, Cummings has requested a meeting with Duncan to figure out what steps need to be taken to ensure that colleges are not creating unnecessary barriers to federal assistance. (For more on this story, click here.)

With all the outrageous fees students already must endure, what do you think of universities adding an additional one? Are you for filling out a form that costs you $25 if there is a chance you might get additional aid or against forking up more money than necessary? Let us know your thoughts in the comments section.

Figuring out the bottom line when it comes to the cost of your college education is definitely a stressful part of the process. With everything that goes into determining your financial aid package (your parents’ income, your earnings and your family’s net assets), it’s important to understand that merit aid – aid based on a student’s attributes (academics, athletics, extracurriculars, etc.) – is available to student regardless of their “need.” New federal rules are blurring the distinction between scholarships awarded on merit and grants awarded because of a student’s financial need – for instance, a growing number of colleges now award “need-based” aid to students from families earning six figures! Who would have thunk it?! So, we’ve compiled a few helpful tips to maximize your chances for merit aid and increase your overall financial aid package.

• Fill out the FAFSA. Federal rules have changed. College aid officials are now allowed to award need-based aid to students whose parents earned decent salaries last year but have recently been laid off, as well as make accommodations for a family’s unique circumstances, such as high medical bills.
• Apply to schools where you’d rank at the top. While your dream school might be an Ivy League, you should apply to at least a few colleges where your GPA would put you in the top 25 percent of the student body.
• Apply to schools that offer generous need-based aid. In the 2009-10 academic year, Louisiana College reported that 88 percent of students were receiving non-need based financial aid. Do the schools you’re considering boast the same kind of aid?
• Do the research. If you’re interested in a college, find out what it has to offer when it comes to merit aid. You might qualify for more awards than you think!
• Before making a final decision, compare net prices. Consider the cost of attendance in its entirety including tuition and fees, room and board, books and transportation. The school that offers the most in merit aid might not be the best choice; sometimes the college offering the largest merit scholarship might have the highest net price because its tuition is higher.
• Don’t be afraid to negotiate. Believe it or not, you have negotiating leverage when it comes to your merit aid package. If you have received admission letters from two or more universities and your first choice has a higher net price than your second choice, contact that institution! Some schools might be willing to match the merit aid offered, which would provide you the opportunity to attend your first choice school for less money!

Though it's a day off from school and work, New Year's Day is often seen as a day to get down to business.  While you're starting in on your New Year's resolutions, opening up a new calendar, and packing up the holiday decorations, there's one more thing that college students and college-bound high school students should consider doing.  The Department of Education starts accepting the 2009-2010 Free Application for Federal Student Aid (more commonly known as "FAFSA") on January 1.  State application deadlines start happening soon after, beginning with Connecticut's February 15 priority deadline.  So while you might not be starting school until August or September, you want to be applying for financial aid right now.

What You Need

In order to complete a FAFSA, you will need the following documents: 

 
• your social security card
 
• a driver's license if you have one
 
• bank statements and records of investments (if you have any)
 
• records of untaxed income (again, if you have any)
 
• your 2008 tax return and W2s
 
• all of the above for your parents if you are considered a dependent (to determine dependency status, check here)
 
• a PIN number to sign electronically (go to pin.ed.gov to get one)
 

If you do not have your tax information yet, and most likely you don't, you can use your 2007 tax information to estimate 2008.  That way, you have a FAFSA on file and once you've done your taxes for the new year, you'll be able to submit a correction online.  While that might seem like more work, it's the best recipe for maximizing your state and campus-based aid packages.  If things changed drastically for your family in 2008, apply for student financial aid with the information you have, then talk to your school's financial aid office to adjust your information accordingly.

Why You Should Apply

Completing a FAFSA is an important step in funding your education if you don't plan on paying for everything out-of-pocket.  The FAFSA is used by the Department of Education to determine eligibility for federal student financial aid for college.  This aid includes federal grant programs (such as the Pell Grant), federal work-study, and federal student loans.  It is also used by states to determine eligibility for their financial aid programs, such as state grants.  Colleges also use the FAFSA to determine eligibility for the need-based aid programs they administer.  Finally, many scholarship opportunities request FAFSA information as part of their application process.  Even if you think that you won't qualify for free money in the form of need-based college scholarships and grants, you should still apply.  At the minimum, the vast majority of students qualify for Stafford Loans, low-interest federal student loans that represent one of the best deals in borrowing for school.

Where To Get More Information

Start on the FAFSA homepage and go through the links under "Before Beginning a FAFSA" to get started, especially if this is your first time filing.  You'll find information about application deadlines, required documents, applying for a PIN, and other things you need to know about to begin.  If you don't want to wait until tomorrow, 2009-2010 worksheets are already available on fafsa.ed.gov.  The ambitious among us can even fill out a worksheet now, then copy the information into their FAFSA on the Web beginning tomorrow.

We also offer a wealth of resources on financial aid at Scholarships.com.  Check out the financial aid section on our Resources page for further reading.

During his confirmation hearing Tuesday, Arne Duncan, Obama's appointee for Education Secretary, disclosed broad ideas but few specific plans for education in America.  Much of the hearing before the U.S. Senate focused on elementary and secondary education, though questions related to paying for college did surface.  Duncan's primary focuses appear to be on college access and college affordability, moving away from the emphasis on accountability the nation has seen under Margaret Spellings, the current Secretary of Education.

According to coverage by The Chronicle of Higher Education and Inside Higher Ed, Duncan's primary goal related to college aid is to guarantee access to student loans for everyone attending college.  Taking up one aspect of Spellings' policy, he also expressed an interest in simplifying the FAFSA to make applying for federal student financial aid more enticing for college students.  Additionally, Duncan pledged to work towards the goals of increasing Federal Pell Grants and instituting the $4,000 education tax credit that made up a major part of Obama's campaign platform.

Congress may already be taking steps towards some of these goals in drafting the next economic stimulus package.  Reports have abounded this week that plans are in the works to increase the maximum available Pell Grant by $500 and to consolidate two existing federal higher education tax options into one $3,000 tax credit for higher education expenses.

While it's still a long way from becoming law, the first published draft of the economic stimulus legislation created by the House of Representatives includes billions of dollars for higher education, including several provisions designed to make paying for school easier.  The bill still has to be approved by both the House and the Senate (which is drafting its own stimulus legislation) then signed by the President, so it remains to be seen how many of the following appropriations will make it into the final version of the stimulus package.

The stimulus bill would increase funding to several federal student financial aid programs, as well as providing emergency funds to states to prevent further drastic budget cuts, and designating money to help colleges, especially ones affected by disasters, make needed improvements and repairs.  If the bill is passed, federal work-study will receive a boost in funding, as will Pell Grants, eliminating a projected budget shortfall for the program.  Unsubsidized Stafford Loans will increase by $2,000 per year, bringing the loan limit to $7,500 or more for undergraduate students.  The maximum Pell Grant award will also increase to $5,350.  In addition, lender subsidies will also increase, hopefully enticing more banks to remain in the FFEL program.  The Hope tax credit and a provision that allowed families to deduct up to $4,000 in educational expenses will also be combined into a new $2,500 tax credit, through which families with too little income to file taxes could still receive $1,000.

As Congress hammers out the details of the stimulus bill in coming weeks, these numbers will likely change.  A more detailed breakdown of these and other proposals affecting colleges and universities is available from Inside Higher Ed.

It's looking like federal student financial aid will be increased in the forthcoming economic stimulus package, at least based on the legislation presented in each house of Congress in its current form.  While the House stimulus bill contains more aid for education, the Senate bill also proposes higher education tax benefits and increases in Federal Pell Grant funding.

The House bill promises:

• $15.6 billion to increase the Pell Grant by $500 to $5,350 and fully fund the increase
• $490 million to Federal Work-Study
• $12.5 billion over the course of 10 years to offer a $2,500 tax credit that will be 40% refundable for those who would otherwise make too little to qualify
• $6 billion to higher education infrastructure
• $1.5 billion to improve energy efficiency for colleges, schools, and local governments
• $39 billion to school districts and state colleges
• $25 billion to states for "high priority needs" which can include education
• a $2,000 increase in loan limits on federal Stafford Loans

The Senate bill appropriates:

• $13.9 billion to increase the Pell Grant by $281 in 2009-2010 and $400 in 2010-2011 and fully fund the increase
• $12.9 billion to create a 30% refundable $2,500 tax credit
• $61 million to Perkins Loans
• $3.5 billion to improve energy efficiency and infrastructure on college campuses
• $39 billion to school districts and public colleges
• $25 billion to states for "high priority" needs which may include education

The House bill also includes money to improve financial aid administration and further assist student loan lenders, while the Senate bill will allow computers to be counted as education expenses towards which 529 plans can be used.  The bills are facing some Republican opposition, especially regarding education spending, as it's been argued that construction projects and increases to student financial aid will not directly and immediately benefit the economy.  As Congress and the White House continue to hash out the details of these bills, amounts are likely to change.  But for now, it appears that colleges and college students may receive a little extra financial aid from the government this year.

As we mentioned last month, financial aid application deadlines are fast approaching for the coming fall.  While students technically have until June 30, 2010 to complete a FAFSA on the Web for the 2009-2010 school year, state aid deadlines happen much sooner with some occurring as early as February--this February.  So if you're waiting to do your taxes first or just generally procrastinating on your application, check the deadlines below to make sure you don't miss out on state or campus-based aid programs. 

 
• Alabama:   Check with your financial aid administrator
 
• Alaska:  April 15, 2009
 
• American Samoa:  Check with your financial aid administrator (additional forms may be required)
 
• Arizona:  March 1, 2009
 
• Arkansas: 
   
  • For Academic Challenge - June 1, 2009
   
  • For Workforce Grant - check with your financial aid administrator
   
  • For Higher Education Opportunity Grant - June 1, 2009 (fall term); November 1, 2009 (spring term)
   
   
 
• California: 
   
  • For initial awards - March 2, 2009
   
  • For additional community college awards - September 2, 2009 - date postmarked (additional forms may be required)
   
   
 
• Colorado: Check with your financial aid administrator
 
• Connecticut: Priority deadline February 15, 2009 (additional forms may be required)
 
• Delaware: April 15, 2009
 
• District of Columbia: June 30, 2009 (additional forms may be required)
 
• Federated States of Micronesia: Check with your financial aid administrator (additional forms may be required)
 
• Florida: May 15, 2009 - date processed
 
• Georgia: Check with your financial aid administrator
 
• Guam: Check with your financial aid administrator (additional forms may be required)
 
• Hawaii: Check with you financial aid administrator (additional forms may be required)
 
• Idaho:  Opportunity Grant - Priority deadline March 1, 2009 (additional forms may be required)
 
• Illinois: 
   
  • First-time applicants - September 30, 2009
   
  • Continuing applicants - Priority deadline August 15, 2009
   
   
 
• Indiana: March 10, 2009
 
• Iowa: July 1, 2009
 
• Kansas: Priority deadline April 1, 2009 (additional forms may be required)
 
• Kentucky: Priority deadline March 15, 2009
 
• Louisiana: July 1, 2009
 
• Maine: May 1, 2009
 
• Marshall Islands: Check with your financial aid administrator (additional forms may be required)
 
• Maryland: March 1, 2009
 
• Massachusetts: Priority deadline May 1, 2009
 
• Michigan: March 1, 2009
 
• Minnesota: 30 days after term starts
 
• Mississippi: 
   
  • MTAG and MESG Grants - September 15, 2009
   
  • HELP Scholarship - March 31, 2009
   
   
 
• Missouri: April 1, 2009
 
• Montana: Priority deadline March 1, 2009
 
• Nebraska: Check with your financial aid administrator (additional forms may be required)
 
• Nevada: Check with your financial aid administrator (additional forms may be required)
 
• New Hampshire: May 1, 2009
 
• New Jersey: 
   
  • June 1, 2009 if you received a Tuition Aid Grant in 2008-2009
   
  • All other applications - October 1, 2009, for fall and spring terms;
   
  • March 1, 2010, for spring term only
   
   
 
• New Mexico: Check with your financial aid administrator (additional forms may be required)
 
• New York: May 1, 2010 (additional forms may be required)
 
• North Carolina: Check with your financial aid administrator
 
• North Dakota: March 15, 2009
 
• Northern Mariana Islands: Check with your financial aid administrator (additional forms may be required)
 
• Ohio: October 1, 2009
 
• Oklahoma: Priority deadline April 15, 2009 for best consideration
 
• Oregon: Check with your financial aid administrator
 
• Palau: Check with your financial aid administrator (additional forms may be required)
 
• Pennsylvania: 
   
  • All 2008-2009 State Grant recipients and all non-2008-2009 State Grant recipients in degree programs - May 1, 2009
   
  • All other applicants - August 1, 2009 (additional forms may be required)
   
   
 
• Puerto Rico: Check with your financial aid administrator
 
• Rhode Island: Priority deadline March 1, 2009
 
• South Carolina: Tuition Grants - June 30, 2009
 
• South Dakota: Check with your financial aid administrator (additional forms may be required)
 
• Tennessee: 
   
  • For State Grant - Priority deadline March 1, 2009
   
  • For State Lottery - September 1, 2009
   
   
 
• Texas: Check with your financial aid administrator (additional forms may be required)
 
• U.S. Virgin Islands: Check with your financial aid administrator (additional forms may be required)
 
• Utah: Check with your financial aid administrator
 
• Vermont: Check with your financial aid administrator (additional forms may be required)
 
• Virginia: Check with your financial aid administrator (additional forms may be required)
 
• Washington: Check with your financial aid administrator
 
• West Virginia: Priority deadline March 1, 2009 (additional forms may be required)
 
• Wisconsin: Check with your financial aid administrator
 
• Wyoming: Check with your financial aid administrator (additional forms may be required)
 

An omnibus appropriations bill for the current fiscal year passed the House yesterday and is on its way to the Senate.  This piece of legislation will raise the maximum award for Federal Pell Grants to $5350 for 2009-2010.  The bill was put on hold last year due to threats of a veto from President Bush.

While Pell Grants received a funding boost, SEOG grants will remain at 2008 funding levels, as will work-study.  Perkins Loan cancellation programs will receive a boost in funding to cover shortfalls.  Additionally, TRIO and Gear Up programs, aimed at helping low-income students get into college, also received more funding.

The first draft of the budget for the 2010 fiscal year is also heading to Congress soon after being unveiled by President Obama this morning.  While details are still emerging, based on an address the president delivered Tuesday, it's likely that further funding for financial aid programs and higher education in general will be included. 

While budgets are being hashed out and college aid is generally on its way up, more trouble may be brewing for student loans.  A PLUS loan auction program slated to go into effect this summer could reduce the availability of these loans that parents take out on behalf of their students, at least at schools participating in the FFEL program. Financial aid officers have petitioned Congress to delay the scheduled cut in PLUS loan subsidies so as not to jeopardize students' ability to pay for school in the midst of a recession that has already driven dozens of banks away from one form of student lending or another.