Getting your student ready for college can be an overwhelming task. As a parent you worry about their readiness to leave home and adapt to all aspects of college life. College-bound students often get caught up in college applications and essays, and sometimes forget to tell their parents about another form that can be as critical to the college selection process as a student’s ACT scores. Most people know it by its acronym: FAFSA.

All students are expected to contribute towards the cost of their college education. How much you and your family will be expected to contribute, or the Expected Family Contribution (EFC), depends on your financial situation.

The Free Application for Federal Student Aid (FAFSA) is the application used by nearly all colleges and universities to determine eligibility for federal, state and college-sponsored financial aid, including grants, educational loans and work-study programs. It can also be a stepping stone for other opportunities. Take this quiz to see how much you know about FAFSA.

True or False—The FAFSA calculates the contribution your family is expected to make to your child’s educational expenses.
TRUE. The FAFSA reviews your previous year’s tax form information, household size, the number of children attending college and other factors, and then uses a formula to calculate your expected family contribution toward your child’s education expenses for the next school year.

Your expected family contribution is subtracted from the school’s total cost of attendance. If it costs $20,000 to attend a particular school and your EFC is $12,000, you will be eligible for up to $8,000 in aid. (Note: Your EFC does not impact merit-based scholarships.)

True or False—Only persons who think they qualify for need-based scholarships and grants should complete the FAFSA.
FALSE. You should complete the FAFSA whether you think you’ll be eligible for “free money” or not. In addition to grants and scholarships that don’t need to be repaid, the FAFSA helps qualify students for federal work-study programs and student loans.

True or False—To receive the aid for which you’re eligible, your FAFSA application must be turned in by the May 1st deadline.
FALSE. At most schools, financial aid is awarded on a first come, first served basis. So the sooner you complete your FAFSA, the better. Also, keep in mind that every school’s calendar is different.

True or False—You cannot submit the FAFSA for the 2010-2011 academic year until your tax returns for 2009 are complete.
FALSE. If it’s not possible for you to complete your tax forms early in the new year, it’s wise to submit the FAFSA using your best estimate. You can update your application when the final numbers are in.

True or False—You must complete the FAFSA each year you have children in college.
TRUE. Family circumstances often change from year to year. The income on last year’s tax returns may no longer reflect your “true” income. That’s why it’s important to complete the FAFSA each year.

True or False—Only families with demonstrated financial need are eligible for the federal government’s low-interest Stafford loans.
FALSE. There are several different kinds of Stafford loans for students and their parents, some of which are not based on financial need. But you must still complete the FAFSA to learn how much you may be eligible to borrow.

Your banker can help you understand your options and make the loan decision that is right for you. Having this knowledge up front can make the college decision process easier. So don’t delay.

Good luck as you and your student enter another milestone in both of your lives. iBi