15 things you need to know about financial aid

Timothy M. Hayes, MBA, CFP®,is the founder and President of Landmark Financial Advisory Services, a member of the Garrett Planning Network of fee-only advisors, and an expert in navigating the financial-aid application process.

Every January, students and their parents face the daunting prospect of preparing the various financial-aid applications that are required to be submitted in order to determine their eligibility for federal and/or institutional financial aid. Most families find the process, at best, mystifying and at worst, overwhelming. Worse yet, many rely on inaccurate information from well-meaning friends or the college's own financial-aid office when completing the applications, leading to a potential loss of aid.

To better assist students and their parents in the preparation and submission of the various financial-aid applications — including the Free Application for Federal Student Aid (FAFSA) — we offer the following caveats, tips, and recommendations:

  1. Always remember that higher education is a BIG business and the college's financial-aid officer (FAO) is not necessarily your friend. They represent the interests of their employer — not you. While they won't intentionally give you erroneous information, they may overlook or misunderstand your particular situation and give you generalized, rather than specific, input or answers to your questions or concerns. Double-check the accuracy of any information you receive from the FAO with the FAFSA answer key available on the Department of Education's website. And always be careful not to disclose any specific information about your finances to the FAO until you're certain that it's accurate.
  2. Apply for aid even if you don't think you'll be eligible. Given the costs today, most families qualify for some form of assistance. Even if that assistance is nothing more than an unsubsidized Stafford loan, the interest rate on the loan may be less than what you'd pay on a private loan.
  3. There are two kinds of financial aid: gift aid (i.e., “free” money) and self-help aid (i.e., loans). Most aid today is self-help aid. Your family's financial need is the dominant factor in determining your eligibility.
  4. The income and assets of the student are weighed more heavily than the parents' are in the assessment of your eligibility. Consequently, strictly from a financial-aid eligibility perspective, it's often better to minimize (where practical and possible) the student's income and assets when applying for aid.
  5. The parents' home equity is not assessed in the federal needs-based (FAFSA) calculation. Don't allow unscrupulous lenders or promoters persuade you to draw equity out of your home (usually to purchase expensive investments or insurance) in order to “qualify” for more aid.
  6. If the parents' earned income and adjusted gross income (AGI) are both less than $50,000, the student will qualify for the Simplified Needs Test, which ignores the assets of the parents and the student in the computation of the Expected Family Contribution (EFC). For those families with an AGI of less than $31,000, there will be a “Zero EFC.” In both cases, the student will receive more aid.
  7. Harvesting tax losses on investments before the year you apply for aid (i.e., the “base” year) will reduce your AGI and increase your aid eligibility. For those families who will be completing the FAFSA in January of 2013, the base year is 2012 — which means that any losses must be taken before Dec. 31, 2012.
  8. If your parents are divorced, report only the income and assets of the parent with whom you lived during the past 12 months. This may not be the same parent who “claims” you as a dependent for income tax purposes. Strictly from an aid-eligibility standpoint, the best strategy is for the student to live with the lower-earning spouse.
  9. Be sure to compare all of whatever aid awards you might receive from various schools before accepting any awards. You generally have until May 1 to respond, but may request an extension if you have not received information from all of the schools by then.
  10. If you or your family have experienced any kind of extenuating circumstances in the time since you applied for aid — like a death in the family, extraordinary medical expenses, or the loss of a job — be sure to contact the FAO to explain your special circumstances and to ask them to use their “professional judgment” to reconsider your package in light of the new information.
  11. Withdrawals from a 529 plan in one year (i.e., the base year) do not count as income to the student in the next year, unless the 529 is owned by someone other than the student or the parent (for example, a grandparent).
  12. Income information in the FAFSA will always be from the base year, but asset information is as of the date the FAFSA is signed by the parents.
  13. Some assets are not included in the financial-aid calculation, such as personal property, annuities, the cash value of life insurance, retirement accounts, and 529 accounts owned by people other than the student or parents. Thus, before signing the FAFSA, reduce assets by buying a car, computer, or other personal property that you would be buying soon anyhow, or by purchasing life insurance if you need it.
  14. Loans are not treated as income, whereas gifts of cash are. Consequently, a grandparent wanting to help with tuition could loan the money to the student rather than gifting it. It does have to be a bona fide loan — they can't just call it a loan — and the grandparent has to charge a market rate of interest on the loan. Also, the student would have to spend the money before signing the application; otherwise, the loan will be assessed as an asset of the student (equal to the amount of the loan still remaining in the student's bank account). The grandparent might then later forgive the loan in blocks of $13,000 (the current annual gift exclusion), after all aid applications have been filed.
  15. Some financial aid — like Work-Study, Federal Perkins loans and/or college grants or “tuition discounts” — is awarded at the school's discretion. If you don't receive any of these awards, don't be afraid to contact the FAO and ask why you didn't receive them.
More about...Planning

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
75 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Tom
Tom
8 years ago

Thanks for clarifying in bullet point 3 that most FAFSA money comes in the form of student loans. Many people seem to conflate FAFSA with free rides for college, when most grant money is at the state or institution level

michael
michael
8 years ago

Re: point 7… You can use this to offset gains (if you have any) but beyond that you are limited to using $3k/year in losses to offset regular income, so in that case this will have a minimal effect — right?

Timothy M. Hayes
Timothy M. Hayes
8 years ago
Reply to  michael

Michael,

Yes, you are correct. What I was referring to more specifically was the notion of minimizing investment gains (and, so, reducing/minimizing the contribution to AGI of investment income) – but your point is valid, and noted. Thank you.

Mom of five
Mom of five
8 years ago

Re: Bullet point 14 – Isn’t there an annual exclusion to the gift tax? I thought you could gift someone up to $13000 without the recipient incurring taxes. And if the grandparents were married, can’t they each gift the grandchild $13000, for a total of $26000 without the recipient incurring taxes?

I’m no CPA, so I could be completely misreading the rule. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes

Timothy M. Hayes
Timothy M. Hayes
8 years ago
Reply to  Mom of five

You are correct – that is exactly the point that I was trying to make about forgiving the loan in blocks of $13,000 – and, yes, a married couple could double those gifts to $26,000 annually.

Mom of five
Mom of five
8 years ago

But what I don’t get is why a grandparent can’t just give the 13k without the recipient incurring taxes? The bullet point says “Loans are not treated as income, whereas gifts of cash are. ” Do you mean all gifts of cash or only those over $13k?

Matt
Matt
8 years ago

Grandparents can also pay directly for someone’s education, with no limits. They would simply pay the tuition bill directly to the universary, rather than using the kid as a conduit.

Not enough people take advantage of this provision.

Addie
Addie
8 years ago

Thanks for this article. I lived on-campus most of the last year, and with my mom for the other portions of the year. My dad has a much higher income than my mom. Can I legally list my mom as my parent on the FAFSA, even if my dad is covering most of my college expenses?

Thanks.

Timothy M. Hayes
Timothy M. Hayes
8 years ago
Reply to  Addie

Addie,

I’m assuming from your post that your parents are divorced. If you spent more of your time (off-campus) with your mom than you did with your dad, then it is your mom’s income and assets that should be reported on the FAFSA when you next apply for aid. You should know, however, that if your parents’ divorce decree stipulates that your father is obligated to provide financial support for your college expenses, that the support MAY be construed as a “resource” in the application and/or by the college. Resources (typically) reduce financial aid on a dollar-for-dollar basis.

Addie
Addie
8 years ago

Thanks for the response, Timothy. I should definitely receive more aid next year because of this advice!

Jennifer
Jennifer
8 years ago

Although, many private universities will require the non-custodial parent to provide tax returns and complete certain requirements. We have to use my income, my new husband’s income and my ex-husband’s income for financial aide purposes. Each university may see this differently.

Frank
Frank
8 years ago

This is actually incorrect. In the case of divorce the FAFSA outlines which parent should be on the form. Since this is taxpayer money the Dept. of Education will not allow students to choose who goes on the form. Rather it is decided by a “flow chart” of sorts. 1) In the last 12 months (as of the day the student is filling out the application) who did the student live with the most? If Mother or Father then this is the person on app, if neither move on to question 2. 2) In the last 12 months who supported… Read more »

LeRainDrop
LeRainDrop
8 years ago

This seems like great advice. I’m very surprised by #5 (parents’ home equity is not assessed in the FAFSA calculation) because I recently learned that my parents “had to” take a ton of equity out of their home to pay for my and my brothers’ college tuitions. Five to twelve years later now, with both of them being laid off from work, and real estate prices way down from the time they took the equity out, they had to sell the house this summer and barely covered the mortgages with the sale. My dad is defintely under the impression that… Read more »

Bella
Bella
8 years ago
Reply to  LeRainDrop

Well, ‘had to’ could mean a lot of things. Maybe their AGI was high enough that you weren’t going to get aid – and the easiest way to raise funds was to take out a equity line on the house – compared to many loans – it’s a good deal.

LeRainDrop
LeRainDrop
8 years ago
Reply to  Bella

Thanks, Bella, I guess that makes sense. He was saying that having gone through the process for three kids over five different schools he has learned so much about how better to allocate and use his assets. He says he wishes he knew that it’s better not to pay down the mortgages and instead use savings to invest in other accounts or buy things. I don’t know if that makes any sense, but for what it’s worth… 🙂

Bella
Bella
8 years ago
Reply to  LeRainDrop

Totally agree that you learn so much going through it – that you shoulda coulda woulda done differently. The biggest thing my parents foudn out was that there are ‘loopholes’ that depending on your moral standing you can make yourself quality for (like making your child an independant etc..). But you need to be making those decisions and setting things up for it – LONG in advance. for instance – someone who is independantly wealthy – but only generates a minimal income on paper – Mr. MM comes to mind – would be able to have the parents income disqualified.… Read more »

Jackie
Jackie
8 years ago
Reply to  LeRainDrop

What do you mean by “make your child independant”?

Timothy M. Hayes
Timothy M. Hayes
8 years ago
Reply to  LeRainDrop

It’s not easy to make your child indendent for financial aid purposes (if the child is truly independent, then the parents’ income and assets will not be assessed in the aid formula). People often think that they can simply make the child independent (or that the child is independent for aid because they are independent for tax purposes), but independence is determined by the questions on the FAFSA (age, whether the child is married or has dependents him- or herself, etc.). If answering the questions pertaining to independence (honestly) does not result in the child being considered independent, then you… Read more »

John S @ Frugal Rules
John S @ Frugal Rules
8 years ago

Great post. I completely agree on point #1. Higher education really has become a big business and I think many times it can be lost in the shuffle that it should be to benefit the student and not all for the school. One other thing to look out for for aid is that there are many businesses/organizations that will give scholarships out as well. I am not certain how that would look like from a taxation perspective, but would generally be much better than a loan.

Ben @ Affording Reality
Ben @ Affording Reality
8 years ago

2 other points to remind borrowers of: 1) Loans are often awarded for a substantial amount ABOVE the true tuition cost to cover “living expenses.” These awards will be paid out by the school if you do not decline some portion of the award, possibly DOUBLING your debt obligation after graduation. They make taking their money far too easy. 2) Annual loan amounts are limited, and the total will be split between the two main semesters unless you take action. Decline some loan amount if you plan on attending summer sessions and cannot afford to pay cash for them. And… Read more »

Timothy M. Hayes
Timothy M. Hayes
8 years ago

Ben,

Just to clarify – for your edification as well as for whomever else may read this post – payments for tuition and related expenses made DIRECTLY to the school WILL avoid the limitations on annual (tax-free) gifts, but any direct payments will be treated as a “resource” of the student and reduce financial aid eligibility (or awards) on a dollar-for dollar basis. So they are generally not a wise idea for those who may be eligible for financial aid, but could be used by those who are ineligible or who aren’t applying or don’t care about aid.

Ben @ Affording Reality
Ben @ Affording Reality
8 years ago

Mr. Hayes,

I think we both stand corrected. Payment directly to the school could affect the FOLLOWING year’s FAFSA. Further, not all schools will adjust FinAid after the fact in reaction to a direct payment.

An alternative would be for gifts to be made at the $13,000 tax-free cutoff following graduation to assist the student in paying off their loans. This avoid tax and FinAid obligations.

Alice @ Earning My Two Cents
Alice @ Earning My Two Cents
8 years ago

The income calculation for my husband (a full time student) changed a lot after we got married because suddenly he went from being eligible for Pell Grants and a very low income to an average income (cause it now includes my salary) and now he doesn’t get any grants at all. One thing that I have noticed is that it’s hard to find guidance on financial aid and paying for college for adults who aren’t getting any assistance from their parents. Most info is for parents to find out about getting loans for their kids or having kids get their… Read more »

Ms. Kitty
Ms. Kitty
8 years ago

This is so true! My husband and I both went back to college after our kids were born. The financial aid office basically had no idea what to do with us. I had tuition reimbursement, but needed to take out a loan to pay for child care and transportation costs in order to go. My husband amazingly got a scholarship, but the aid office kept telling him he needed his parents to sign things and generally not getting it. Probably your best bet would be the aid office at a community college where adults are a core part of the… Read more »

CincyCat
CincyCat
8 years ago

Your husband should fill out a FAFSA and see if he will qualify for Stafford Loans. I’m in my 30’s, and have a relatively healthy household income, but still qualified for a substantial amount of aid as a graduate student.

Jenne
Jenne
8 years ago

This is good information.

Note: if your graduating child wants to go to college and you’re not planning contribute toward it, they’ll need to go through certain processes to establish themselves as not a dependent in order to not have your income included in the determination. This includes NOT being a dependent on your tax return for a certain amount of time before applying for financial aid.

AMW
AMW
8 years ago
Reply to  Jenne

You also have to cut off your child’s medical insurance if you want them to be independent so you need to take that into consideration.

Ash (in US)
Ash (in US)
8 years ago
Reply to  Jenne

For clarity, here are the standards you need to meet to be declared independent: – Be 24 years of age or older by December 31 of the award year; – Be an orphan (both parents deceased), ward of the court, or was a ward of the court until the age of 18; – Be a veteran of the Armed Forces of the United States; – Be a graduate or professional student; – Be a married individual; – Have legal dependents other than a spouse; – Be a student for whom a financial aid administrator makes a documented determination of independence… Read more »

CincyCat
CincyCat
8 years ago
Reply to  Ash (in US)

Unless you marry the love of your life at 20 (like I did…;))

Marsha
Marsha
8 years ago

What’s the effect on the Expected Family Contribution of having more than one child in college? We haven’t needed financial aid yet for our older son, who has a generous scholarship that covers most of his tuition. We’ve been able to handle the remaining costs out of regular income, but that will change when our younger son goes to college next year. Even if he gets a scholarship like his brother’s, we’ll still need more money to cover all the costs.

getagrip
getagrip
8 years ago
Reply to  Marsha

As I recall the total amount you are expected to pay goes up, but it typically is less per child. That said, all it honestly did for us is that our children’s federal loans went from being all being unsubsidized to half of the new loans being subsidized. They’ll save some on interest, which is okay, but it didn’t make a huge difference overall. Frankly, I’ve lost all faith in college financial aid offices. When I was in school the first thing the FA people did was look if I qualified for grants and scholarships and worked with me on… Read more »

Susan
Susan
8 years ago

I’d like to point out something that you missed. Federal student loans at this point likely carry higher interest rates than some private loans. But this doesn’t necessarily mean students would do better to borrow a private loan. Federal student loans offer forgiveness provisions and flexible repayment options that usually do not come with private loans. The reality in life is that sometimes you have to pay more to get a better product this is the case with federal student loans. I’m a little concerned, however, that you’re giving advice on how to best work around the federal financial aid… Read more »

AMW
AMW
8 years ago
Reply to  Susan

You are worried about people working around the financial aid system yet the system actually penalizes you for doing the “right” thing. If your child works during high school and saves thousands of dollars to use for thier college education it is counted against them…even work study opportunities. If your child works during high school and spends every penny they get, it benfits them when it comes to aid. The system also doesn’t take into consideration your extenuating circumstances unless they are recent. For the first 14 years of my daughters life we spent approx $120,000 out of pocket for… Read more »

Becky+P.
Becky+P.
8 years ago
Reply to  AMW

“If your child works during high school and saves thousands of dollars to use for thier college education it is counted against them…even work study opportunities.” I think the best way to answer this is to have the child go ahead and pay their money to the university (say they have almost one year paid for) and THEN apply for aid, after they have $0 in savings. If they have too much in savings due to hard work, they will get nothing. The school will try to get you to apply at the beginning of the school year, but I… Read more »

Ms. Kitty
Ms. Kitty
8 years ago
Reply to  Becky+P.

that doesn’t work though. grant money is first come-first served. it is often gone by march or april the year before.

Becky+P.
Becky+P.
8 years ago
Reply to  Becky+P.

I can see that it won’t really let me reply to Kitty, so just let me say that my kids have all applied for and received the full Pell Grant…they applied the summer before or finished up the application the school year that they were in. For example, for this school year, we were actually earlier than we’ve ever been, and my daughter got the Pell Grant in July for 2012-13. In previous years we’ve not been as quick, and got it applied to the kids’ accounts by Dec. of the school year they were in. Each time they’ve gotten… Read more »

jazzycat
jazzycat
7 years ago
Reply to  Susan

I disagree that it isn’t ‘fair’ to ‘the taxpayers’. The goal (ideally, though not always, of course) is that educated members of society benefit ALL of that society. Additionally, a degree generally helps the graduate earn more, hence eventually pay more taxes.

Unfortunately, many of the ‘systems'(financial aid, health care, legal, etc) in our society are set up to punish those who follow the rules. Depressing but true. However, this blog is not about breaking the rules or exploiting taxpayers, it is about understanding those rules in order to make the wisest choices for each person’s situation.

Jennifer
Jennifer
8 years ago

Great article. It would useful to see something similar for independent students/adults going back to school and facing the prospects of loans. I know some of this info still applies- but there are some differences as well. I am trying to figure out how to save up enough money to pay for school outright and avoid loans- but I also want to be eligible for scholarships which are often need based not merit based.

thethriftyspendthrift
thethriftyspendthrift
8 years ago

Another point I’d make is that you might be able to negotiate with the financial aid office once they determine your financial aid package, especially if you can tell them about other competing offers from various colleges.

Sally
Sally
8 years ago

In addition to the advise in this blog, I would like to add a few other points. 1) Find the numbers for entering freshman class, and then check to see the size of the sophomore class. Why? Financial aid packages at some schools change after you are no longer a ‘fresh’ recruit. I know a few people who were given very generous packages their first year, to have them cut back in the second because their ‘financial situation’ changed. Not really. The parents were still making the same amount of money. This actually goes back to a point in this… Read more »

jim
jim
8 years ago

#3 – sorry to be nitpicky about this but it says:
“Most aid today is self-help aid.”

Loans are 46% of all student aid nationally as of most current data for 2010-2011.

ref:
http://trends.collegeboard.org/student_aid/report_findings/indicator/Total_Student_Aid_by_Source

And for undergrads loans are ~40%.

LeRainDrop
LeRainDrop
8 years ago
Reply to  jim

Jim, thanks for sharing that resource. However, you mis-read it: it says that FEDERAL loans contintute 46% of all post-secondary financial aid. That does NOT mean that loans in general are only 46% of financial aid.

jim
jim
8 years ago
Reply to  LeRainDrop

Private loans are a small fraction of the total student loan market.

Nonfederal loans were 7.9 billion out of 111.9 total or about 7%. If you add in nonfederal then loans are up to 48% for the whole.
Still undergrads take far lower loan amounts with nonfedeeral loans added they’d go up to around 41%.

All the data is on the college board site.

Jenna, Adaptu Community Manager
Jenna, Adaptu Community Manager
8 years ago

What a great list of things to know. Thanks for sharing!

Cheryl
Cheryl
8 years ago

As someone who has been through the financial aid process for the last two years with my daughter, with at least two more coming up, I’d like to share a little bit of what I’ve learned. First, retirement money that it already in your accounts is not counted against you, BUT money that you’ve put in for the year you are completing the FAFSA for is. In other words, the money I put into my Roth last year was added right back into my income. I guess it’s considered optional to save for retirement during your children’s college years. Secondly,… Read more »

jim
jim
8 years ago
Reply to  Cheryl

“There are not separate jobs just for work-study students” I had a work study job in college. It was treated differently and only open to students with work study. The official work study program should have jobs may have jobs set aside only for work study. Thats how it worked at my school. The federal/state government pays most of the wages. Maybe the university in question just didn’t have open work study jobs or maybe they just didn’t treat work study different than other jobs. But with the government paying a large % of the wages, you’d expect the school… Read more »

Cheryl
Cheryl
8 years ago
Reply to  jim

jim, I think the work-study regulations have changed in the last couple of years. From what my daughter’s school told us, there are relatively new federal regulations that no longer permit them to have a saved pool of work-study jobs. I personally think that’s a little nuts, but that’s what we were told. You are right that the school does get a subsidy for the wages. Maybe the financial aid person who commented earlier can clarify if schools are able to reserve jobs for work-study students, or if all jobs must be open to all students, as we were told.… Read more »

jim
jim
8 years ago
Reply to  Cheryl

I has been a long time since I went to college and I only vaguely remember how it worked. going to my university’s website they have a listing of work study jobs. I guess they might be required to allow other non work study students to apply to the jobs, but I can’t see how that would work really as they wouldn’t qualify for the subsidy. But I really don’t know how it works.

Marsha
Marsha
8 years ago
Reply to  Cheryl

“I’ve often heard it said that sometimes,with aid, private colleges can be as cheap as public ones.” This is true in my son’s case. He’s going to an expensive private college just a few miles from our home. Because of the generous merit scholarship that the college is giving him and the fact that he can live at home, it’s cheaper than the nearest 4-year public university because he’d have to pay for housing if he went there. If a college really wants a particular student, they will find a way to make sure that he or she can afford… Read more »

the other jim
the other jim
8 years ago

Our son just graduated from undergrad, moved home, is now delivering pizzas while he studies for his lsat. His plan is to live at home for a year and save all his wages for school. Spouse and I are trying to pay off our mortgage and fully fund our retirement. Paying for law school really isn’t feasible. Any suggestions for how he can be treated as an “independent” ’cause he really will be when he goes to law school (probrably out of state since I can’t seem to talk him into living at home and going to our in-state law… Read more »

CincyCat
CincyCat
8 years ago
Reply to  the other jim

I believe grad students are automatically considered independent. And, if he’s in law school, they will usually give him a living stipend (they don’t want future lawyers delivering pizza instead of studying case law).

jim
jim
8 years ago
Reply to  CincyCat

All grad students are not considered independents and grad students are treated entirely differently than law school students. I am not aware of any stipends being given out to any law students. If you know where this has actually happened, please do let me know. It appears each law school is different and some will treat students as independent at the age of 24 or 26 while others simply won’t.

Samantha
Samantha
8 years ago
Reply to  the other jim

I’m in law school at the moment. I don’t have to put my parents’ information on my FAFSA anymore, although I am still dependent on them and a dependent on their taxes. I’ve never heard of a law school “living stipend” (that would be pretty great if it existed though!), but you can always take out unsubsidized federal loans that include living expenses. Also, he likely won’t be able to work his first year. They told us that our financial aid and our enrollment would be in jeopardy if they found out we were employed in first year. Would they… Read more »

jim
jim
8 years ago
Reply to  Samantha

Samantha,
Thanks for the information. Do you mind telling me how you are “independent”? Did you qualify by age, marital status or veteran status? Our son will only be 23 years old, single and not a vet. He isn’t planning on working his first year in law school so he’ll have to finance all his living expenses and tuition, etc. I really want to see him keep his loans as low as possible. Law school tuition these days is insane. Thanks.

Samantha
Samantha
8 years ago
Reply to  jim

Sure – I was only 21 when I entered law school (turned 22 during that year), single, and not a veteran. You’re automatically independent for law school: http://www.lsac.org/jd/finance/financial-aid-applying-for-aid.asp (“All graduate/professional students are considered independent of their parents for the federal loan programs.”) I just checked last year’s FAFSA, and it’s only got my information. There’s an optional parent’s info section – I don’t know who would ever take that option! Federal loans go up to $20,500 but they’re all unsubsidized now. (http://www.lsac.org/jd/finance/financial-aid-options.asp) And just my personal view, when he starts applying, if he has to pay 100%, it’s not the… Read more »

jim
jim
8 years ago
Reply to  Samantha

Samantha, Thanks again for the info. I agree that if he has to pay for everything that may not be the law school for him. We’re still new to this. He hasn’t even taken the lsat so we don’t know what kind of scholarships he may qualify for. I’m just trying to learn the system in advance so I can help him get prepared since we are not in a position to help him financially. If you wouldn’t mind, and only if/when you have the time, would you email me at [email protected] and tell me what I should expect with… Read more »

JAK
JAK
8 years ago

We are a blended family. Would filing my taxes as “married filing separatly” increase my childs chances of receiving more aid? Or would we still need to include my husbands earnings? My child has not been adopted by my husband.

finaid administrator
finaid administrator
8 years ago
Reply to  JAK

I haven’t gotten to read this article til now, and wanted to respond – as you’ve already probably figured out, all schools are different, but no matter how you file you have to report your husband’s income on the FAFSA. Also filing as married filing separately or head of household sometimes triggers the financial aid verification process, in which you’ll have to bring the school your 2011 tax return transcripts from the IRS (schools aren’t supposed to take the plain old tax return forms anymore, like the 1040, 1040A, etc).

CincyCat
CincyCat
8 years ago

#16 – You do not have to “accept” the full amount that you are awarded in federal loans. Figure up the cost of base tuition, estimated books, room, board (dorm) and tech fees, and politely REJECT any loan award amount that exceeds this figure. This is what I did for my MBA, and now, when I graduate, I’ll only have roughly $21,000 to worry about repaying instead of $40,000 (which is what I was originally awarded).

Meghan
Meghan
8 years ago

The system completely screws students whose parents make a good income and don’t contribute to their child’s education/living expenses. I’m not saying that it’s a requirement but keep in mind how much more the student will be charged in interest over the course of going to school. The unsubsidized loan at a higher rate was my only option because my step-father made decent money (wish they had held off on marrying as I was a Sr in high school when they did). If you can’t pay for tuition, consider making payments towards the interest of those loans while your student… Read more »

the other jim
the other jim
8 years ago
Reply to  Meghan

Meghan,
That stinks. Thanks for the tip re: at least paying off the accruing interest.

James
James
8 years ago

Something else to note about the paying-for-college process: in my experience, freshman coming into a 4-year school right out of high school have a much better shot at scholarships than transfer students. I took the two years of community college route in order to save money and acclimate myself to college, since I had done a somewhat non-traditional high school program. Having had a 3.9 in high school and a 4.0 getting my associate’s degree, I figured I would be golden for getting a good chunk of my next few years of school paid for by the university. Not so… Read more »

Neya
Neya
6 years ago

Is it optional to put you’re married on your FAFSA? I heard that you receive less in aid if you change your martial status & my husband makes at least $30K a year.

armon
armon
6 years ago

can I gift money to a friend to reduce my cash assets and then fill the fafsa and then have him gift it bac as long as I keep it in the annual gift limits? everything I have seen until now has told me this is legal.

Tiffany
Tiffany
6 years ago

If me and my boyfriend are buying a house and I am on the loan how will that affect my financial aid?

Yoni
Yoni
6 years ago

Should I postpone selling our home while or son is in college. Will any gain after paying off the mortgage may me look like I don’t need all the aid my son got last year. We are overseas and our income was low enough to qualify for aid. But we are trying to sell our home in US as well.

Susan
Susan
6 years ago

My mom was a single mother for the majority of my life and due to her finances I was able to get a lot of help from my fafsa, however she remarried when I was 18 and my step dad makes much more $$.. (but clearly it is not his responsibility to pay for my college education and its unfair to base my financial need from his salary..) Is this a circumstance that we should contact the FAO to explain our special circumstances? Or am I out of luck..?

IGLU
IGLU
6 years ago

Very good blog post. I certainly love this site. Keep writing!

Laura
Laura
5 years ago

Should I marry my boyfriend who has less assets than my parents for more money on the FAFSA?

ced
ced
5 years ago

I’m 32. I moved my wife and our daughter to Oregon to pursue a product design degree. A years worth of credits did not transfer over from my community it college in FL to the one in Oregon so I had to redo 12 classes. Aftwr 2 more yrs I graduated, got my AA, and once again uprooted us and moved from Portland to Eugene to attend the U of O. We had to start over with jobs and everything with every move. Now I’ve been going to U of O for a year, I’m a junior at U of… Read more »

maria
maria
5 years ago

hello im a little confused my financial aid consultants wants me to bring in my moms IRS transcription but i don’t understand for what. Will they be charging my mom? Will my mom have to pay my student loan also?

Kim Tran
Kim Tran
5 years ago

Can my daughter get Fin. Aid at BU if our AGI ~ $140k?

Blake
Blake
4 years ago

Thanks for your suggestions. One thing we have noticed is the fact that banks and financial institutions are aware of the spending habits of consumers and also understand that the majority of people max out there their cards around the holidays. They properly take advantage of this particular fact and commence flooding ones inbox plus snail-mail box along with hundreds of 0 APR credit card offers immediately after the holiday season concludes. Knowing that if you are like 98 of American community, you’ll leap at the chance to consolidate financial debt and transfer balances towards 0 APR credit cards.

Theresa Benfield
Theresa Benfield
4 years ago

If I paid for Florida Prepaid College without my ex husband helping and my son was also awarded a grant but the refund checks went to my ex husband is that legal? Especially when he didn’t contribute to Florida prepaid and I submitted the FAFSA for this year? My son went to live with him to be closer to school etc last year when he started college in August? They are getting the refund checks and doesn’t seem right. Is that legal? They even blocked me from access to the college website. Need advise and if that’s legal considering the… Read more »

granny
granny
3 years ago

I’m a grandparent who supports a grandchild. She is 16. If I claim her as a dependant on my federal taxes, will my income be used to determine scholarship potential?? My daughter lives with me, as well as my granddaughter. My daughter has almost no income.

shares