Students are reminded to prepare FAFSA in January

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January 1 is the first day that students planning to attend college next fall may submit the Free Application for Federal Student Aid (FAFSA) and begin the financial aid application process. Sallie Mae, the nation's leading saving- and paying-for-college company, advises students and families to submit their FAFSA early to reduce the amount they spend out of pocket to pay for college.

The federal government, state governments, and higher education institutions each award financial aid - which includes need- and non-need- based grants, scholarships, work-study and student loans - to students and rely on the student's FAFSA information when making award determinations. By submitting the FAFSA before the earlier of state and institution deadlines, students maximize their chances of receiving all of the gift aid - financial aid that does not have to be repaid, such as grants and scholarships - to which they are entitled. Last year, approximately $150 billion in college financial aid was awarded, with grants comprising 43 percent of that total.

"While nearly eight out of 10 full-time undergraduates receive some form of financial aid, there are millions of students who are missing out entirely because they are not completing the FAFSA," said Martha Holler, spokeswoman for Sallie Mae. "Don't pay more for college than you have to. Make it your resolution to complete the FAFSA, and let financial aid pick up some of your college tab."

Sallie Mae advises students and families who are looking to cover the cost of higher education first to determine what they can contribute from college savings and current income, and then to follow its 1-2-3 approach to paying for college. And that begins with completing the financial aid application, the Free Application for Federal Student Aid (FAFSA).

Students and their parents can complete the application on the Web in as little as an hour or two gathering relevant documents and information, including Social Security Number or alien registration card, driver's license, latest federal income tax return, W-2 forms, bank statements and investment information, before going online to to complete the application.

Students need to submit a FAFSA every year they are in college. Students who are already attending college and who submitted the FAFSA last year may submit a Renewal FAFSA after January 1. The Renewal FAFSA form is streamlined to reduce the number of questions the student must complete, and many answers are pre-populated with information from the student's previous FAFSA.

Sallie Mae supports proposals in Congress to simplify the FAFSA and to make it quicker and easier for students and parents to apply for financial aid for college. "Efforts to simplify the FAFSA will help many families, especially those with first-generation college students who have never been through the process," said Holler. "In the meantime, every family should know that free help and resources are available."

Sallie Mae advises students and parents to use the following 1-2-3 approach when saving for college via tax-advantaged 529 savings plans (such as and using interest-free tuition payment plans (such as are not enough to cover the full cost of a college or university degree:

  1. Find free money first. Apply for financial aid that does not have to be repaid, such as scholarships and grants, by completing the FAFSA.
  2. Exhaust federal student loans. Consider borrowing under the federally subsidized student loan programs, which provide the most consumer-friendly loan rates, benefits, and repayment options for students and parents. Parents and graduate/professional students can borrow up to the cost of attendance under the Parent PLUS and Graduate PLUS programs, respectively.
  3. Use private student loans as a last resort, and only to fill any remaining funding gap.

Sallie Mae's award-winning Web site has free tools and information to simplify the application process and help families navigate the financial aid process. Resources include sample FAFSAs in both English and Spanish, a list of state financial aid deadlines and a three-minute FAFSA podcast which can be downloaded to an MP3 player or computer. also contains the largest free online scholarship database, containing more than 2.8 million scholarships worth over $16 billion. You can visit for more information.

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