After last week’s suggestion that you do your own taxes, you’re pretty fed up with the idea of all this paperwork, aren’t you? But to be honest, the reason I suggested you do your own taxes was to also get you to do your FAFSA. I actually think doing your own FAFSA in college is more important, so if you only do one… make it this one.

What Is the FAFSA?

The Free Application for Federal Student Aid is the form that most college students and potential college students have to fill out to get federal aid. Even if you don’t qualify for federal aid, some schools (including mine, RIT) require you to fill out the form in order to qualify for any aid from the school. So, it’s big bananas.

The form is fairly easy, and is usually done online at FAFSA.ed.gov. Be sure to use that site, because others may actually be scams to get your personal information. You should never pay money to fill out the FAFSA – if a form asks you for a credit card number, it’s a fake.

The FAFSA requires information from your taxes (if you were required to file), your parents’ taxes, and some additional information about how much money you have/make, how many siblings you have… it gets kind of extensive, but it shouldn’t take you more than an hour to fill out, if you gather all the materials together first.

You don’t necessarily need your current taxes to do the FAFSA. That is, if you’re filling out the FAFSA for the 2009-10 school year, it asks for either your 2008 taxes, or you can estimate based on your 2007 taxes. Estimating based on year-old taxes is fine, as long as your situation hasn’t changed much. If you and your parents have the same jobs at last year (or the same lack-thereof) and you haven’t won the lottery or received an inheritance, then you’re probably fine.

Why Should I Do My Own FAFSA?

Just like doing your own taxes is beneficial for your financial health, the FAFSA gives you a clear picture of your financial situation and how it plays into your college costs.

I’ve been doing my own FAFSA since my senior year of high school. I told my mom that I would need to do it, and she handed me her taxes and told me to ask my older sister if I had any questions. Doing my own FAFSA every year has given me a keen sense of what it takes to pay for college, and what the government expects of college students and (if they’re dependent), they’re parents.

What if your parents don’t want you to do your own FAFSA? It’s true, some parents are leery of handing their tax documents over to their young-adult children. Maybe they don’t want you to know how much they make, or they just want to be cautious for some other reason. In that case, compromise with them – do the "student" half of your FAFSA and hand over the keyboard when you get to the parent portion. It’s important that you at least have some hand in the process.

What if your parents refuse to do the FAFSA at all? Yeah, this happens. Some people just don’t want to give their financial information to the government – even though the government already has most of it, since the vast majority of FAFSA information comes from your tax forms. Or maybe they’re trying to prevent you from going to a certain college…. or from going to college at all.

If this happens to you… I don’t know what to tell you. At that point, it might be worth it to save up some of your own money, get a lawyer, and get legally emancipated from your parents. If you’re considered a dependent by the FAFSA (basically any under the age of 23), you will need your parents info to fill out the FAFSA. Use this dependency worksheet to double-check.

The other thing you could try is talking directly to your school’s financial aid counselor – they might be able to help you if you’re having difficulty getting information from your parents, but that depends on the policies of your college.

When Should I Fill Out The FAFSA?

My rule of thumb is: as soon as I have my tax forms and my mom’s tax forms in my pretty little hands. Many schools, mine included, give out more aid to the people who file for aid first each year. So, the sooner the better!

Green Panda Treehouse has an excellent list of the deadlines for the FAFSA by state for the 2009-2010 school year. There’s some crazy variation – some states have early deadlines as early as February 15, 2009, while others will give you until May of 2010. So make sure you check the timing for your state!

P.S. I hate the FAFSA. I think it’s a broken system, and is in need of some major reform. Some kids get more aid from the FAFSA just because they’ve got gay parents (seriously), and some poor kids get nothing because of a technicality, and if your parents are rich but refuse to pay for you? The FAFSA doesn’t take many things like this into account. But, it’s the form we’ve got (for now), so make sure you fill it out.

Upromise is giving away big scholarship money again this year. I applied last year, and I didn’t get it – and I would reapply this year, if only I weren’t graduating! But if you apply early, you might have a really good shot.

From the site:

Everyone knows college costs are on the rise. And while you’re doing your best to save, you’re probably going to need some help.

As part of our mission to make college more accessible, we’ve increased the amount of our Upromise scholarship fund to $500,000, twice what it was when we introduced it a year ago. That means 200 of the best and brightest students will receive scholarships of $2,500 each for the 2009-2010 academic year.

You must be a Upromise member to win. Awards will be based on need and merit. Applications must be received by February 28, 2009.

What does "need and merit" mean? Need seems to simply mean that you have a combined family adjusted gross income of $65,000 or less, and merit means having a GPA of 3.0 or higher. These are just the base requirements to qualify – meeting them doesn’t necessarily mean you’ll win.

Other base requirements?

• Be a Upromise member (which you should be already, but if you’re not, you have the option to sign up) or child of a Upromise member
• Be a US citizen or legal permanent resident residing in one of the 50 states
• Be a high school senior or graduate planning to enroll in the 2009-2010 school year, OR be already enrolled in a full-time undergrad program.

This scholarship is most definitely worth a shot, if you meet all the base requirements. It’s good money, and it looks like they’ll have it every year, so save all of your info from this year, so you can edit it and re-use it if you apply again next year!

There’s one month left to apply, so I suggest you do it right away! Anecdotal evidence says that when two equal candidates are up for the same award, the one who applied first will usually be picked.

Last week, I took you through all the ways and reasons to track down your free credit report, and I teased you a bit by saving that you can also get your credit score for free, but I wouldn’t tell you how… until now.

Remember how credit reports are like annoying report cards that show everything except your grades? Well, if you want to check out your actually credit "GPA," you’ll need to get your credit score. Usually, you have to pay for this service – either through one of the three credit reporting companies (Experian, Equifax, or TransUnion), or you can get any of the three (or all three) through MyFICO.com.

If you go the paid route, you can either get one score right now for a low-ish price (about $15), get all three scores, or you can sign up for credit monitoring, which is where you get one of your scores, and updates sent to your email or phone when it changes. (My mom gets the updates texted to her phone from MyFICO – it’s kinda weird, actually.)

Or, you could get one score, anytime you like, for free.

Credit Karma

I was highly suspicious of Credit Karma when I first heard about it. The claim of a free credit score sounded exactly like something that would come with a huge catch. The jingles from not-actually-free-FreeCreditReport.com started playing in my head, and I stayed away from Credit Karma for quite some time.

But, more and more sites started recommending Credit Karma – and some of my friends, too. So I decided to finally sign up and see how good it is.

Credit Karma is ad supported, so the ads on the site pay the bill that you would normally pay to get access to your score. You only get access to your score from one out of the three reporting agencies – TransUnion. And yes, there are a lot of ads. But the layout is pretty clean, and there don’t seem to be any pop-ups or anything, so it’s not a big deal. And the ads all seem to be for reputable companies, like Upromise.

So you give them your personal information (they’ll need it to get your score, and it doesn’t seem to be an excessive amount of personal info), and they give you your score. You seem to be able to hit the "Update my Score" button daily, but your score will only change when something about your situation changes, so you probably only need to check it once a month.

Credit Karma also offers a "credit simulator" tool, so you can play around with what would happen if you paid off all your debt, or missed a payment… it kinda works, but not as well as some other credit simulators I’ve seen (like the one you get with MyFICO).

All in all, I like Credit Karma. You pretty much get just your score, and a little explanation. Although, I noticed the explanation for mine was incorrect – it said I had too many accounts where the balance was close to my limit (lies) and too many last payments (also lies, I’ve never had a late payment). [Credit Karma founder Kenneth Lin came by to say that the better your credit score, the less accurate this is likely to be – my score is pretty shiny, so that’s why it’s inaccurate for me.]

The score seems correct though, based on my credit history. If you want a second free way to "check" your credit score, Bankrate.com offers a credit score simulator that you can use.

If a credit score is like your GPA, then a credit report is like a report card by some sadistic teacher who writes down what you’ve done, but doesn’t write your grades on it. It simply lists out what lines of credit you have (credit cards, student loans, car loans, mortgage) and some other information about you. If you want to get your credit "GPA," you’ll have to pay for it*.

What makes this even more maddening is the fact that you have three credit reports – so it’s more like there’s three teachers putting out these grade-less report cards. The three reports are pretty similar, but some companies don’t report to all three, so what appears on your Equifax report might not be on your TransUnion report, but it might be on your Experian report.

The government decided that this was annoying and confusing enough, and that we should all have access to our own credit reports once a year, for free. So they passed the Fair and Accurate Credit Transactions Act (FACT Act), which set up the website AnnualCreditReport.com. Not to be confused with FreeCreditReport.com – which, although it has catchy commercials, is not actually free.

AnnualCreditReport.com = Free
FreeCreditReport.com = Not Free

I know what you’re thinking. "Could they make this a little more confusing for me?" It’s like trying to play a game of Twister while blindfolded! But here’s the bottom line:

You’ve got three credit reports – one from Equifax, one from Experian, and one from TransUnion. They’re periodically being updated, behind your back, as you go about your life. Checking in on them is one of the best ways to make sure your identity hasn’t been stolen. Also, credit reports have some truly shame-worthy inaccuracy rates, so you should check them to make sure they’ve got your information straight.

Checking Your Reports

So, AnnualCreditReport.com allows you to grab your three reports once a year for free. Now, you could do what I did the first time I learned that, and grab all three of your reports right away. Unfortunately, once I did that, I realized I couldn’t check any of them again for a year, unless I wanted to pay up. Ack! What if something went wrong? What if I thought my identity had been stolen sometime during that year?

The smarter thing to do is to just grab one for now. It doesn’t matter which one – any of the three will do. Select one from the site, enter in all of the information, and have a glance at your report.

Then, four months from now, go back and grab your report from one of the other two companies. Four months after that, get the final report. And then, four months after that – magic happens! A year will have passed since you grabbed that first report, and you can get a new free report from that company.

And the cycle goes on and on. Spacing it out over a year is incredibly helpful – but you have to actually remember to do it. I remember because I’m a nerd, and I get all excited whenever January/May/September rolls around: "TIME TO CHECK MY CREDIT REPORT YAY!" But you may want to set up an email reminder with a calendar program, because you’re probably less of a nerd than I am.

If Something is Wrong with Your Report

It happens. If something is just inaccurate (a debt that you’ve paid off is still listed as having a balance), there’s an easy link on each companies website to report a "discrepancy." Fill out the form, they contact the company that you have the debt with, and the company has 30 days prove that they’re right about what’s on the report.

If it looks like something big (you see something that is totally not something you did, and it looks like identity theft), you’ll want to first file a police report (fun!), and then put a freeze on your credit reports. This will make it so that no one can get credit using your information. Not fun for you, but necessary to stop an identity thief from causing more trouble.

If All is Well With Your Report

Print it, file it (in a locked file cabinet, if you can), and sit pretty for four months until you check the next report.

*There is a way to get one of your credit scores for free. I’ll tell you about it next week.