Student aid competition heats up
By CCTIMES, Published January 18, 2009

The student financial aid season started Jan. 1, and early indications are that competition for the estimated $144 billion of federal, state and institutional aid is likely to be fierce in the 2009-10 academic year.

“During the first five days of the new financial aid season, we saw a more than 40 percent increase in the number of families seeking assistance compared with last year,” said Craig Carroll, chief executive officer of Student Financial Aid Services, a non-governmental, fee-based student financial aid advisor. “The demand for student aid has been climbing as the recession batters family budgets, parents’ jobs are eliminated and self-employed parents experience business downturns. Given the trend we have been seeing since November, we expect this season to break records for the number of college students competing for financial aid.”

Applying early for college financial aid can make the difference between getting all the money a student is eligible for and losing on some much-needed funds, Carroll said. Given the demand for aid, applying early this year may be especially important.

“We urge students and families not to delay filing the federal student aid application because we expect the competition for grants, scholarships and loans will be at an all-time high,” Carroll said.

On Jan. 1, the U.S. Department of Education began accepting federal student aid applications (FAFSAs) from students seeking federal assistance. Because money from many student aid programs is disbursed on a first-come, first-served basis, the sooner a student files the FAFSA, the better his or her chances are of getting aid.

This year, the form asks 137 income, asset and dependency questions. States, colleges and the federal government use the information to try to  distribute student aid. Federal lawmakers have pledged to reduce the complexity of the application, and President-elect Barack Obama noted the need to make it simpler during his campaign.

As many as eight million students don’t apply for student aid, in part, because of the red tape, according to the U.S. Department of Education.