First in first out – FIFO is an Accounting 101 term that describes the FAFSA process. The Federal monies are dished out on a first-come first-serve basis. So, follow-through on your New Year’s resolutions and get your forms together and complete the FAFSA. (www.fafsa.ed.gov).
Last week I chipped away at the beginnings of a financial aid glossary. Here’s the remainder of the alphabet, again courtesy of "The Complete Idiot’s Guide to Financial Aid for College," David Rye, $18.95 ( www.idiotsguides.com).
The Federal Direct Loan Program offers four types of loans to student and parent borrowers:
Stafford Loans: Subsidized (need-based) and unsubsidized (not need-based) loans. Guaranteed by the federal government and available to students to fund their education.
PLUS: Loans for parents borrowing for the education of their dependents.
Consolidation loan: A loan arranged through the U.S. Department of Education’s Direct Loan Servicing Center; designed to combine Title IV education loans into a single loan with one monthly payment.
Federal Perkins Loan (FPL): A campus-based loan program providing low-interest loans to students in need.
Besides loans, here are other financial-aid options to explore:
Federal Pell Grants: A need-based grant program for undergraduate students.
Gift/Grant Aid: Financial aid, generally in the form of a grant or scholarship, that a student is not required to repay or earn through employment.
HOPE Scholarship: Provides a family with a tax credit of up to $1,500 maximum per year for two years for each dependent student.
Leveraging Educational Assistance Partnership (LEAP) Program: Provides grants for education to postsecondary students with substantial financial need through matching grants to the states.
Lifetime Learning Credit: A tax credit of up to $1,000 per family per tax year for postsecondary education courses. Claimant must file a tax credit and owe taxes for that tax year.
Profile: The College Scholarship Services Profile. This is the customized financial aid application form required at certain colleges to determine eligibility for institutional aid.
Renewal FAFSA: Version of the FAFSA that students may use if they applied for federal financial aid the previous award year.
Satisfactory academic progress (SAP): To be eligible for federal student aid, a student must maintain satisfactory academic progress toward a degree or certificate.
Simplified needs test: The basis on which only the first part of the FAFSA form is required. Asset information is not required if the parents of a dependent student have income of less than $50,000.
Student Aid Report (SAR): Sent to students by the federal government. Summarizes financial reported on the FAFSA. Includes the expected family contribution(EFC).
Uniform Gifts to Minors Act (UMGA): Legislation that introduced a tax-effective manner of transferring property to minors without the complications of trusts or guardianship restrictions.