By Ben Feuer and College Choice

We all know that it’s a good idea, fiscally speaking, to attend a quality college and graduate school – but how good of an idea is it, exactly?  The chart above tells the tale in full.  But one of the many hurdles you’re going to have to leap is the completion of the dreaded FAFSA – federal application for student aid.  But don’t despair -- the FAFSA’s bark is much worse than its bite, and we’re here to offer a step-by-step guide, with props to our good friends at College Choice.

Is the FAFSA Need or Merit-Based?  Many colleges and graduate programs offer merit-based scholarships, but not through the FAFSA. It is strictly need-based – the key factors are your family’s income, assets and the cost of tuition at your chosen school(s).

What form does FAFSA aid take?  It’ll be a blend of loans, which you’ll need to pay back, and grants/scholarships, which you keep.  You may also qualify for work-study, low-wage jobs offered by the school and its partners, but even if you don’t, you can always just … you know … find a job …

How do I know if I qualify for the FAFSA?  Just go to this webpage.  You’ll need last year’s tax docs, a pay stub, your banking information, and about half an hour.

Darn, I don’t qualify.  Fill it out anyway -- many colleges, foundations, and state scholarship organizations use the FAFSA to distribute money and determine scholarship funding. Plus, filling out the FAFSA qualifies you for low-cost federal student loans of at least $5,500 per year!

What if I don’t know how much my school is going to cost?  Pick the most expensive school on your list and base your calculations on that.  If you don’t know how much your target school costs, use College Navigator to figure it out.

How do I apply for FAFSA?  You can apply to FAFSA online at fafsa.ed.gov, on the telephone at 1-800-433-3243, or by paper application (available on the FAFSA website). The FAFSA application becomes available October 1st and closes June 30th the following year.  You’ll need your Social Security number or alien registration number, your driver’s license number (optional), your tax records, lists of untaxed income like child support and veteran’s benefits, asset records and lists of schools. This data retrieval tool may help you.

What kind of assets will show up on a FAFSA application?  Here’s what does have to be reported: CDs, stocks, bank and brokerage accounts, bonds, mutual funds, college savings plans, trust funds, real estate, and money market accounts.

Here’s what doesn’t have to be reported: home equity, qualified retirement plans (pensions, annuities, IRAs, 401(k)s, and any similar accounts), and estate-related assets (boats, furniture, fine art, etc.).

How can I get more money from FAFSA?  Plan ahead and apply early, when more aid is available – on October 1 if possible.  Move or spend as many qualified assets as possible well before applying.  If your life circumstances change after your application (a relative is hospitalized, someone gets fired), appeal, politely and humbly. Don’t be ashamed of or afraid to disclose your parent’s occupational status or level of education – as far as FAFSA is concerned, do not know = no.