…but remember that you get more bees with honey. A negotiation is a conversation – not a battle of wills! Financial aid offers will vary and if there’s one school who you are really in love with and their offer is a little soft, pick up the phone and call. You have nothing to lose!
Everyone should apply for aid, regardless of what type of salary they earn. You never know when life might change and if a situation should arise where you want to take out a loan, you will need to have filed a FAFSA to qualify.
Now that January has arrived, it’s time for high school seniors and their parents to fill out the FAFSA, or Free Application for Federal Student Aid. The FAFSA is the form you are required to fill out if you want colleges to consider you for financial aid.
While families have their own unique circumstances, here are some of the top questions I come across this time of year and my answers which will hopefully help you along the way as well.
1. We make too much money, we probably shouldn’t bother filling out the FAFSA, right?
Wrong. Regardless of how much (or how little) you make, you should always fill out the FAFSA. Even if your EFC is very high, there are still non-need based loans like the Direct Unsubsidized Loan or Parent PLUS Loan which can help you spread out the costs. But, to qualify you must fill out a FAFSA.
2. How do parents who have joint custody and are both remarried with new spouses file the FAFSA??
When students come from divorced families, financial aid eligibility is based on the income and assets of the custodial parent. This is the parent who the student lives with for the majority of the year, even if it’s six months and one day. Even if the non-custodial parent has a considerably higher salary than the custodial parent, this parent’s income and assets are not factored into the federal financial aid eligibility calculation.
3. We’re going to have two kids in college at the same time, how will this affect our financial aid eligibility?
How many kids you have in college at the same time has a very big impact on financial aid eligibility. Consider that your EFC is divided by the number of children enrolled in college. If you have one child in college and your EFC is $40,000, then that’s what colleges would expect you to pay. If you have two kids in at the same time, the EFC will be $20,000 each. This is why it’s also important to file a FAFSA each year. Even though you may not get a lot with one child in college, if you have a second one entering a year or two later, you may end up qualifying for something.
4. We won’t have our taxes done until late March, can we just apply for financial aid then?
You can, but you shouldn’t. Financial is aid is very much a first-come, first-serve process. Additionally, some states like Connecticut have February deadlines for state grants which you don’t want to miss. If you wait until after you file your taxes, colleges won’t have as much money to give out as they would have if you had applied in January. File your FAFSA now with estimated income and then use the federal data retrieval tool after you file your taxes to update your information.
5. My daughter’s grandfather has put away money in a 529 for her which we plan on using this year. Since it’s his money and not ours, do we have to report it on the FAFSA?
Yes, you have to report any distribution from a 529. The more important factor here is that the 529 is owned by a grandparent and, therefore, may reduce your aid eligibility considerably. Where a distribution from a 529 owned by either parent is considered a parental asset, a distribution from a 529 owned by someone who is not the parent is considered student income. When calculating aid eligibility, student income and assets are assessed at a much higher level than parental assets so even though the intention is a good one, the outcome may not be helpful.
If you want some help and guidance on your college application and financial aid process, check out what other families are saying about Dobler College Consulting and then contact me today to set up an appointment for a free consultation.
With the frenzy of early application deadlines finally winding down, I had a chance to participate in the #CollegeCash chat on Twitter the other night. For those of you not familiar with Twitter, chats are where people using the same hashtag (#) can talk about a topic. On Thursday nights, Jodi Okun, founder of College Financial Aid Advisors, hosts the #CollegeCash chat. Since she’s in California, the chat doesn’t start until 10PM EST. It’s a little late for those of us here on the East Coast, but the chat is always worth it.
Last night’s chat about college scholarships was with Tamara Krause of ScholarshipExperts.com. It was a great conversation and there were several takeaways that I wanted to share with you today:
1. If you know what you want to major in, you should start looking for scholarships through professional organizations and associations affiliated with that field. For example, here’s a list of scholarships offered through the American Institute of CPA’s (AICPA) for students interested in majoring in accounting.
2. To narrow down internet search results, trying searching more specifically such as “engineering scholarships 2013 2014”.
3. Make good use of social media. The ScholarshipExperts.com Pinterest board has over 600 scholarships!
4. Beware of scams. It should never cost you more than a postage stamp to apply for a scholarship. Also NEVER give out your social security number or bank information.
5. Start your search locally and be prepared to do the work that other students won’t. Check out scholarship opportunities through employers, your church, local organizations, your bank or credit union, the town library and, most importantly, your guidance office.
6. Searching for scholarships is like a part-time job. It’s not a one and done deal. The more you search and the more you apply, the more likely you are to win something.
7. Scholarship searching is also a great job for parents who want to be involved in the process.
8. If you have to write an essay, apply the same rules as an essay for college applications: Grab the reader’s attention in the first two sentences and tell a story. If your essay bores you, it will most definitely bore the scholarship selection committee person who has to read it.
9. Start your search early and continue with it on a regular basis. There are actually scholarships out there for elementary school students!
10. Look for livelines versus deadlines. Find out what the earliest date is you can apply and apply on that date. Be the one to lead the pack of applications!
At the end of the day, scholarship searching is a process and a time-consuming one at that. Pace yourself and stay positive. Also keep in mind that private scholarships can often affect your financial aid award. Colleges treat scholarships differently, but some will reduce your merit scholarships dollar for dollar for each private scholarship that you earn. If your merit award is renewable (and most are as long as you maintain a minimum GPA), sometimes you need to approach scholarship searching very strategically.
Here’s an excerpt from a recent MarketWatch article about this issue:
“The findings by the National Scholarship Providers Association also point to how colleges treat outside scholarships when they’ve already given their students free aid. According to the NSPA, many colleges will take back the free aid they offered students who end up receiving an outside need-based scholarship.
In some cases, it is a dollar-for-dollar reduction that equals the amount of the scholarship. So students who get a $5,000 private scholarship could end up losing $5,000 in free aid that a college has offered them, which would leave them with the same out-of-pocket costs that they had before they received the scholarship.”
So, if you’re unsure of how colleges will treat private scholarships, give them a call and ask. It’s better to know up front before you invest a lot of time in your scholarship search.
If you want some help and guidance on your college search and application process, contact me today to set up an appointment for a free consultation.
So you know you will be applying for financial aid and you’re hearing something about methodologies.
Well, you’re hearing right. Methodologies is plural. There’s more than one. In fact, there are actually two methodologies for calculating financial aid: federal and institutional.
The federal methodology is used by the federal government when you submit the FAFSA (Free Application for Federal Student Aid) while the institutional methodology is used by individual colleges who require you to submit the CSS Profile, which is actually administered by the College Board.
So, what’s the difference beyond the names?
Good question.
While the FAFSA is required by all schools, only a couple hundred private schools require the CSS Profile. So, if you’re applying to the University of Connecticut, you won’t be required to fill out the CSS Profile. If you’re applying to Wesleyan University, a highly selective liberal arts college, you will be required to submit the Profile and you will then be subject to the more stringent requirements for aid eligibility.
The institutional methodology most often shows that a family needs to pay more for college than the federal methodology due to some of the following reasons:
1. If you own a business, 100% of its equity will be assessed.
2. Assets held in the names of siblings will be considered parental assets and assessed as such
3. Your home equity will be considered an asset
4. Only untaxed social security benefits for the student will be excluded. Benefits for the parent will not be excluded.
5. Pre-tax contributions to flex-plans for healthcare and dependent care are assessed as untaxed income
6. Education tax credits are assessed as untaxed income
Essentially, the federal methodology is much more forgiving than the institutional methodology. Since private colleges are dipping into their endowments to award institutional aid to their best applicants, they want to make sure this money is being used wisely (a very subjective term, here).
So, at the end of the day, take a close look at which schools you are applying to so that you know who is going to require the CSS Profile. Not all private schools will, but the more selective the school, the greater the chance that it will be required. You can find this information on the school’s financial aid website of by visiting the list of participating schools and programs on the CSS Profile webpage.
