Financial Aid Answers - presented by eLearners.com : FAFSA

2009-10 FAFSA Changes Part 2

ter — Tue, 14 Oct 2008 22:10:00 GMT

As Paul Harvey would say, here's the rest of the story. More changes to the 2009-10 FAFSA.

Other changes:

Adds the question about interest in TEACH Grant (remember, schools are not required at this time to participate in this program)
Qualified Education Benefits (529 plans) are reported as parent Investment Net Worth regardless of who owns the plan. Even if the plan is in the student's name, the parent reports it. This is good because more assets are protected for the parent than the student.
Qualifed Education Benefits (529 plans) that the student receives are not counted as financial aid. This is also good because the benefits won't impact other financial aid received.
Simplified Needs Test changes-students probably don't know what this is because it's an internal process to determine if parent/student assets are required to be reported on the FAFSA. If you qualify for the Simplified Needs Test and complete parent/student assets anyway, that information will not be used to determine financial aid eligibility. Changes are:

Dislocated Worker added- instructions as to who qualifies as a dislocated worker will be printed on page 3 of the FAFSA paper application and available online as well.
Adjusted Gross Income less than $30,000 (increased)

Revised FAFSA form:

No more Worksheets. Woo hoo! Those pesky Worksheets A, B, and C are gone. Instead, some questions have been eliminated while others are incorporated into the FAFSA application.
What's not used any longer:

Untaxed Social Security benefits received
Welfare payments
Earned Income Credit
Foreign income and special fuel tax credits

Taxed combat pay that is included in the Adjusted Gross Income is now reported to offset that income.

I still have a problem with the FAFSA counting child support as income. Child support is awarded to a parent to use for daily living expenses and shouldn't have to be counted as saveable income for college.

Lastly, another major change is for schools who perform a dependent override. Let me explain. A dependent override is where a student has appealed to their school to be independent based on extreme extenuating circumstances, usually parental abuse or abandonment. Before 2009-10, that override to file the FAFSA as an independent student did not transfer to any other college you added to the FAFSA. Now it does. However, that does not mean that your other school will accept that override at face value. You may still be required to submit appeal documents to the other school. Because these overrides are based on a specific school's professional judgment criterion, what school A accepts as extenuating circumstances and/or documentation, may not be the same as that required by school B.

Hopefully you'll have an easier time completing the FAFSA for 09-10.

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2009-10 FAFSA Changes Part 1

ter — Sun, 12 Oct 2008 15:44:00 GMT

It's almost time! The FAFSA on the Web Worksheet should be available late-November, early-December. It's hard to believe that it's been almost 10 years since ringing in the new millenium and worrying about Y2K computer problems. What's worse, in 2000 I was 16 years into financial aid and some of you were in junior high!

Anyway, there are some new changes to the FAFSA for 2009-10, which will hopefully make the process of completing the form less painful. In this post, I'll address the new options for being independent.

Independent status: (criteria will be explained in the FAFSA instructions)

Added to the Orphan/Ward of the Court statement is Foster Care age 13 or older. If you were in foster care at age 13, you answer yes to this question. Ward of the Court is age 13 years or older as well. Schools will probably request court documents to verify.
Emancipated Minor-if you were legally emancipated before your state's cut-off, you will answer yes. For example, my state's legal age is 18, so a student would have to be legally emancipated by that age.
Legal Guardianship-if you had a legal guardian at age 13, you will answer yes.
Homeless Unaccompanied Youths-if you were determined to be homeless, you will answer yes. Documentation of this status will be determined by appropriate state agencies.
Youths At Risk of Homelessness-the same applies, with an appropriate state agency verifying your status.

I'm not sure what state agency will be verifying homelessness. I did a search for my state and couldn't come up with any designated agency. I'm sure more guidance will be provided to schools.

There is a new option for students to complete the FAFSA on the Web even if they can’t answer yes to one of the independent questions but are unable to get parent information. Before filing, I highly recommend that you contact your financial aid office if this applies to you. Depending on your circumstance, you may be able to appeal as an independent student to receive more aid.

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Why Is My Aid Different From Last Year?

ter — Sun, 13 Apr 2008 16:39:00 GMT

I had family come see me the other day asking why their daughter's financial aid package for 2008-09 was less than 2007-08. After reviewing and anlyzing the FAFSA information for both years, I deduced that the Expected Family Contribution (EFC) was higher for 2008-09 because their son graduates college this year and cannot be included in the number in college for 2008-09. One less family member in college in this case means their daughter has a higher Expected Family Contribution, which is the figure used to calculate financial aid eligibility.

This is not the first time I've had this question, so I thought I'd list some reasons why your financial aid may be different from year to year:

I mentioned the number in college. The Parent Contribution is divided by the number of dependent family members in college, thus reducing the Expected Family Contribution if more than one family member is in college. Remember, a parent in college cannot be included in the number in college on the FAFSA. If you have a parent attending college and you included that parent's information on your FAFSA, contact your financial aid administrator to see if you can file an appeal to include that parent in the number in college.
Any change in household size can affect your eligibility. Usually, the more listed in the household, the lower the EFC. While this is not always the case, you can use it as a general rule of thumb. If you have siblings who move out, it could reduce your financial aid eligibility. The same concept applies if you have siblings move home--your Expected Family Contribution may decrease, thereby increasing your eligibility.
Even a slight change in income reported on the FAFSA could affect your eligibility. I've seen as little as a $5,000 increase in adjusted gross income make a difference, regardless of whether it's student or parent information. It's very important that you review the dollar figures you report on the FAFSA, because financial aid administrators cannot always tell if you've made a mistake.
Federal and state funding is another major issue. Many schools impose a priority deadline for filing the FAFSA. This is to encourage students to file early. Federal aid such as Federal Work Study, Perkins Loan, and Supplemental Educational Opportunity Grant (SEOG) are severely underfunded, which means dollars go very fast. Receiving one or more of these awards this year doesn't mean you'll automatically get it next year. If you don't, ask your financial aid office to put you on a wait list. If your state is anything like mine, funding for grants and scholarships is also in jeopardy. My state has historically had to suspend making grants and scholarships to students long before the published deadline on the FAFSA because funding has been exhausted.
Lastly, a change in your assets could make a difference. A certain portion of assets for students and parents is protected, so you may not see a drastic difference in aid eligibility if your assets change only slightly. However, if you inherit some money, be prepared to have it impact your financial aid eligibility.

These are the most common situations that affect financial aid eligibility from year to year. If you do see a change, ask your financial aid administrator to explain why. I do have to throw in a couple of caveats: 1) I mentioned in a prior post that the type of school you attend can directly impact your aid eligibility depending on your student budget, and 2) the aid administrator at your current school can't analyze different years' FAFSA information if you have transferred from another school because they don't have the prior year FAFSA information (unless you maintain your own records to provide).

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Why Those Financial Aid Packages are Different

ter — Wed, 09 Apr 2008 21:19:00 GMT

On Monday, I outlined some financial aid considerations when choosing a college or filing the FAFSA for more than one institution. That led me to think of other things students might question when reviewing financial aid packages between schools. Not all schools are alike, as you're probably already aware.

State (public), private, and community colleges can all widely vary in their tuition/fees, room/board, and other campus educational costs. Usually, a community college has the lowest tuition and fee rate, and be a commuter school. Because their costs are lower than other schools, your student budget for financial aid will be lower as well. Private schools are on the other end of the spectrum with cost, so your student budget will be much higher. Most state public schools are in between.

What does this mean for you? First, let me give a little background on Expected Family Contribution (EFC). It is driven by the federal government and Department of Education's Federal Methodology formula. The EFC is the result of your FAFSA information, and not what you will be charged by your college for educational expenses. It is simply a guideline for schools to determine your federal and state aid eligibility based on regulations. Unfortunately, the EFC cannot be determined by going to a magical income chart. The Federal Methodology takes into account many different calculations using your family income, assets, household size/number in college, and even parent/student age and state in which you live.

You will receive an EFC on your Student Aid Report once you file the FAFSA. That same EFC will be used at each school you listed as a choice on the FAFSA. However, don't expect to get the same financial aid package at each school. This is when the type of school and your student budget at a particular school comes into play. Based on your individual student budget at that school, the school's funding from the federal and state government, and other private resources, you may see a dramatic difference in financial aid package.

Don't panic if you get a vast array of difference in aid packages if you apply to different types of institutions. The bottom line is always your out-of-pocket expense, so don't hesitate to sit down with each school's financial aid administrator and calculate what is expected of you to pay after financial aid. Be sure to read your award letter from each school carefully because many schools list the final expense (or how to calculate) on the award notification.

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Some Understandable Mistakes Determining Dependency

ter — Fri, 04 Apr 2008 20:00:00 GMT

This week has not been nearly as bad as last week at work! I've turned my frustration of not being able to help into a more constructive role of searching for solutions. I'm also taking the proactive approach to financial aid with this post to help sort out some common mistakes made when determining a student's independent status for financial aid.

Many posts ago, I covered the steps for qualifying as an independent student for financial aid purposes. That said, the FAFSA wording and other legal mumbo jumbo often confuse people. Heck, we financial aid advisors still perform research to answer some questions. Hopefully this information will help for those more difficult FAFSA independent questions:

Graduating mid-year

A lot of students begin an academic year as an undergraduate, then graduate, and return the following semester or quarter as a graduate student. When filing the FAFSA, you must answer NO to the question asking if you are working toward your master's or professional degree. If you answer yes, you will not be considered for undergraduate federal aid such as Pell Grant. Notify the financial aid office if you do graduate mid-year and return as a graduate student, as your financial aid administrator can make the mid-year change in your aid.

Married or separated

If you are still legally married but separated from your spouse at the time you file the FAFSA, still file as married. However, only include your tax and asset information on the form. If you file as married but mistakenly include your spouse's information, your application could be rejected by the federal processor and it may affect your financial aid eligibility.

Have children

To be independent by having children, you must provide over 50% of the child's support. Students who live with their child in a parent's home (the child's grandparent), usually are not providing over 50% support if the parent is paying for food, shelter, etc. For a student paying child support to another person, the student is not paying over 50% in most cases. Neither of these situations are ironclad reasons to answer NO to the FAFSA question, but if you say you have a child for whom you provide over 50% support, be prepared to document your support.

Have legal dependents

This one is tricky because of each state's laws regulation the term "legal". For example, my state does not recognize common-law marriage, so a boyfriend or girlfriend living with a student is not automatically a legal dependent. Foster children non-related people in your household may not qualify as legal dependents. To avoid delays in your financial aid application processing, consult your financial aid office if you have any members in your household that fall into this category before filing the FAFSA.

Ward/dependent of the court

This is probably the most common of all dependency mistakes. If you were raised by, or lived with, someone other than your parent(s), this doesn't mean you were a ward/dependent of the court. Legal guardianship by a relative or friend is not the same. Ward/dependent of the court is a legal procedure where someone assigned by the state is the guardian. Students who were raised by a legal guardian other than a state-appointed person, should contact the financial aid office if biological parent information can't be obtained on the FAFSA.

Veteran status

This is the second most common mistake I see on the FAFSA. All too often, students who serve in the National Guard or Reserves and serve on active duty for training purposes only, answer yes to this question. Unfortunately, these students are not veterans. However, if a student in the National Guard or Reserves was called to active duty with regard to the Iraq conflict, they are automatically veterans, even if they return to the National Guard or Reserves after their tour of duty. The key is being called to active duty for other than training. If unsure of your status, the financial aid office can determine whether you are a veteran by reviewing your DD214.

I hope you find this information helpful. As I mentioned before, it's difficult to give "blanket" answers to all of these situations because of individual state laws. Don't be afraid to check with your financial aid administrator before filing the FAFSA, as this will reduce the amount of time and paperwork it requires of you by filing correctly.

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