I have a lot of problems with how financial aid is calculated, as I'm sure most families do. Low-income families usually benefit from the federal Pell Grant and student loans, but award limits have definitely not kept up with costs to make an education affordable. Middle-income families have it even tougher because many do not qualify for Pell Grant. Being a financial aid advisor is an extremely difficult job because we are the "bad guys" when it comes to students lacking sufficient funding to attend college, which is understandable since we're the contact point. I have been known to blatantly tell families that the system is not fair, because I believe it isn't. That said, I urge all students to write their U.S. Congressmen and Representatives to support an increase in federal funding, and a more fair and realistic approach to assessing income on the FAFSA.

From the beginning of my posts, I've focused on providing information and facts to help students file for financial aid, and that will continue. But I feel compelled to identify what I view as my biggest criticisms regarding the current FAFSA and process:

• Reporting child support as untaxed income. I did some research through the U.S. government website and couldn't find any specific information or definition for "support" and what that entails. Individual states are responsible for their own child support systems. My idea of child support is the payment to a parent for maintenance involving their children, which would be food, shelter, clothing, and medical. I don't think child support payments are an income that can be saved for college expenses in the future when families are struggling to survive now. Therefore, I don't think these payments should be included as income on the FAFSA. Most credit card and loan applications don't require child support payments to be reported, so why should the FAFSA?
• Social Security benefits reported as untaxed income. Families receiving Social Security benefits are almost always on a fixed-income already. When untaxed income is reported, the income weighs more heavily in calculating the Expected Family Contribution because there are no federal taxes being taken out. I think Social Security benefits should be excluded from reporting on the FAFSA.
• Payments made to a tax-deferred pension (ex. 401K or 403B) reported as untaxed income. For those who try to save for retirement, that income is being counted against you when filing the FAFSA. While the value of a retirement plan or pension plan does not have to be reported as an investment value, the money you (or your parent) puts into a tax-deferred plan has to be reported as untaxed income. I have two children in college and pay into a 403B, so that money I invest each year for my retirement is counting against my children now. Payments to tax-deferred pensions should be excluded from untaxed income on the FAFSA.
• Adjusted Gross Income. While I know income must be a factor when calculating an Expected Family Contribution, I feel more income needs to be protected in the Federal Methodology, which is the formula for calculating the EFC. In an earlier post, I talked about the Federal MethodoIogy and how the formula protects a certain amount of income. I have seen a family of 3, with a parent Adjusted Gross Income of $45,000, not qualify for Pell Grant. So for less than $4,000 a month in gross income (not net income!), the family is supposed to save money to afford college expenses while paying for a mortgage, household expenses, and $3.00 gas.  Who can do that?

Okay, I'll get off my soapbox. Hopefully my peeves about financial aid will give you some food for thought and encourage you to write your legislators about financial aid reform. I can tell you that financial aid administrators in the U.S. are a tight group and have a national association that does what they can to help, but I believe students and families have the power. Please remember that this post is based on my opinion and my opinion only. It in no way reflects that of financial aid administrators or political platform. Write on!

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