Plan For College

Monday, October 3, 2016

Changes to the FAFSA-- Part 3---Common Questions

A Few Common Questions We Are Asked Each Year

When will the federal government distribute my financial aid for the upcoming school year?
ANSWER: Your college is the one that disburse (pay out), your financial aid, not the federal government. Since each school has a different timeline for awarding aid, you’ll have to call your school’s financial aid office to find out the specific date.

What can I do to get more financial aid?
ANSWER: A lot of students get disappointed when they see their financial aid offer and don’t receive the amount or type of aid they were hoping for. Your Expected Family Contribution (EFC), is calculated using the information that you provided on the FAFSA. The amount of federal student aid you qualify for uses a formula that calculates your need and was established by law.  Of course, that amount can change every year, depending on a number of factors. Also, some states and schools offer financial aid of their own, called institutional aid. Some of that aid is need-based, other types are merit-based, and some of that aid is awarded on a first-come, first-served basis. We recommend you talk to a competent college consultant to find out how you can increase your chances of getting the most aid possible or talk to your school directly, but don’t expect much help from the colleges

I want free money -  Not more loans
ANSWER: Everyone wants free money!  There are several grants offered by the Federal government, includes the Federal Pell Grant, which are “need-based”, meaning you must have certain level of financial need to qualify. Your school will use your FAFSA information to determine whether you qualify for these grants.  Colleges and universities will also distribute scholarships out based off of merit (high ACT/SAT test scores and GPA), or special talents. If you do not qualify for federal need-based aid or merit or special talent scholarships you’re just out of luck.

Why am I considered "dependent" when I'm 21, don't live at home, and my parents don't pay for my bills/living expenses?

ANSWER:  Living on your own doesn’t make you an independent student for purposes of the FAFSA.  FAFSA dependency guidelines are set by Congress and are different from those of the IRS. This is why even if your parent’s don’t claim you on their taxes, you still won’t be considered independent unless you can meet one of the 13 questions in Step Three of the FAFSA form.

Why should I complete the FAFSA when I know my family’s income is too high to qualify for need-based financial aid?

ANSWER:  This is a common mistake many families make. There are many colleges and universities will refrain from giving out merit-based and special talent scholarships to individual students without first completing the FAFSA form. Even though you may not qualify for need-based aid you could qualify for merit-based aid. Therefore, everyone should complete the FAFSA.

If I want to discuss the potential of receiving merit-based scholarships do I talked to financial aid or the admissions department?

ANSWER:  The Financial Aid Office of a college handles need-based financial aid, but the Admissions Office administers all merit-based financial aid.

Is our EFC really what the college expects us to pay?

ANSWER:  Families often confuse the meaning of their EFC (Expected Family Contribution) calculation as derived from the FAFSA form. The federal government as well as the colleges are NOT saying that your EFC represents what you can comfortably afford/write the check for.
They’re saying that based on the federal formula (called the Federal Methodology), it’s what they expect you to pay (minimally), notwithstanding merit scholarships. Realize that they have defined the phrase to be EXPECTED Family Contribution, not AFFORDABLE Family Contribution.
Adding to the confusion of this term (EFC) is the fact that very few colleges limit a family’s out-of-pocket costs to the EFC calculation! We see many cases where a family has an EFC in the $15K-ish range, yet their “Financial Aid Award” package consists of nothing but loans in excess of $30K, even $40K in some instances.

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