FAFSA Form & Financial Aid Form Blog

Ahh the dreaded EFC. EFC stands for “Estimated family contribution” and it is a number that is displayed on the screen once you submit your FAFSA. Most of the time it can be scary, because it does appear that that number will be how much your family is “expected to pay”…hence the name of the number. The good news is that is not the case at all. That number that is generated through the information you submitted on the FAFSA is a number that a college uses to determine how much aid a student is eligible at that particular college. Just like the Dep’t of Ed has a formula to determine the EFC, each college has their own specific formula for calculating aid. The actual amount that you owe to the school after they assess your aid package, will not be the same as the EFC. This is mostly based on the school’s particular cost of attendance and how much institutional aid they have to give.

There are also other factors involved like scholarships, work study and student loans. SO the bottom line is, don’t freak out when you see your EFC is 6000 and you know you don’t have that in the bank. Chances are, if you are going to reasonably priced school, you will not have to pay anywhere near that after you factor in all the aid, including loans. Any other questions on the EFC? Post a comment and we can explore it some more.

From Inside Higher Ed:

In part because of the FAFSA’s multiple pages and scores of questions seeking personal and financial information about students and their families, many policy experts believe, hundreds of thousands of potential recipients forgo many millions of dollars of federal college aid each year. the Education Department will, right now, make several changes that do not require Congressional approval. This summer, the department will take advantage of existing technology on the Web-based FAFSA to allow married or independent students to skip questions about their parents, among others. In January, the department will stop requiring students with low incomes to answer questions about their financial assets, and only returning students will be asked about prior drug convictions, since the question does not affect first-year students. Department officials said they would work closely with state officials to set up the electronic form to “make it easier to answer questions that the states need but the federal government does not.”

January will also mark the start of the department’s test of a system to allow students who apply for aid for the spring 2010 semester to retrieve relevant tax information from the Internal Revenue Service to help them complete the online FAFSA. “When you’re online filling out the FAFSA, there’ll be a button that says, ‘Want to go get your IRS data?’ ” said Shulman of the IRS.

Commentary

It’s good to see the first incremental steps towards making the FAFSA simpler. The IRS tax data import, if it works correctly, will be a giant timesaver for everyone involved, as those are the questions that students and families tend to get wrong.

A big part of next year’s FAFSA process, then, will be correctly filing your income taxes prior to filing your FAFSA in order to import your tax data. This might have the net effect of causing some folks to file later than usual, and for events like College Goal Sunday, push back the date a little so that families can get their taxes done.

For the 2010-2011 school year the FAFSA form will be 30% shorter in length. The plan is to cut the form down from 30 screen pages to just 10. This will make it a lot easier for people to fill out the form and understand it as they go. The hope is that not only will it save students and parents time, but it will also allow more people to fill out the form and take advantage of financial aid and federal student loans…meaning more students will go to college!

Many questions on the FAFSA apply to very few people and are impossible to verify. These types of questions will be eliminated, and existing questions will rephrased using simpler terms. In addition, there also should be an option to auto fill in many questions using your information from the IRS.

All of this is set to be in place as of Jan. 1 2010. Happy filing!

Important Note: The sooner you fill your FAFSA form out after the start of the year the better…there is only a limited pool of financial aid available per school year so if you wait to too long, you may miss out.

Here is a list of documents/items you should have readily available when you are sitting down to complete your FAFSA.

1. Social Security Number

2. Driver’s licence (if applicable)

3. Previous years W2 and other records of money earned

4. Your (and your spouse’s, if you are married) 2008 Federal Income Tax Return

• IRS 1040, 1040A, 1040 EZ
• Foreign Tax Return, or
• Tax Return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federal States of Micronesia, or Palau

5. Your Parents’ 2008 Federal Income Tax Return (if you are a dependent student)

6. Your 2008 untaxed income records

• Veterans benefits records
• Child support received
• Worker’s compensation

7. Your current bank statements

8. Your current business and investment mortgage information, business and farm records, stock, bond and other investment records

9. Your alien registration or permanent resident card (if you are not a U.S. citizen)

10. Two aspirin

With the unemployment rate nearing double digits it’s no surprise that household incomes have come spiraling downward. Many have lost their jobs and are collecting unemployment at a fraction of their former pay. The concern many students have is that their FAFSA is now overstating their family income, and that the 2008 numbers they submitted are not accurately portraying their need. But no worries, you can make an adjustment at the school level.

If your household income has decreased you may request a special circumstance adjustment from the financial aid office. The change in income must be greater than 10% in most cases to be eligible for consideration. Loss of job, costly medical bills, and divorce are all common special circumstances a financial aid officer will consider in issuing a professional overturn. For more infomration speak with your school’s FAO.

By definition, to grant means to give or transfer. So if you are given a grant, why do you need to pay it back? I thought grants were essentially free money? Don’t worry. Most grants do not require repayment, but if you do not meet the conditions of the grant be prepared to pay.

If you complete your FAFSA and are awarded a Pell grant you must attend at least 60% of the semester before you are one hundred percent vested in your federal aid award for that semester. If you withdraw from all your classes before you have completed at least 60% of the semester the college must then determine what portion of your federal aid you are entitled to. Essentially, they take money away from you which you then need to repay to the school.

If you read the fine print on the federal TEACH Grant, which is a grant providing up to $4,000 per year in grant assistance to students who are completing or plan to complete course work needed to begin a career in teaching, you will notice that in exchange for the grant, a student must sign an agreement to serve as a full-time teacher at certain low-income schools within certain high-need fields for at least four academic years within eight years of completing their course of study. If you fail to honor your commitment your grant is converted to an unsubsidized Stafford loan and must be re-payed.

Financial need is defined as the difference between your EFC and your college’s cost of attendence (which can include living expenses), as determined by the college.

If you or your family have unusual circumstances that should be taken into account, contact your college’s financial aid office as you may qualify for a professional override.

Some examples of unusual circumstance are: unusual medical or dental expenses or a large change in income from last year to this year.

How do you know if you’re dependent or independent by school standards?

There are 10 primary criteria points which are used to make that determination.  You are independent if you fall into one of the following categories…

- If you are 24 or older

- If you are married

- If you are pursuiing an advanced degree

- If you are active duty military, or a veteran

- Students who are parents and whose child gets half of their support or more from them

- Students who have someone else living with them and receive more than half their support

- If you were a foster child or ward of the court after the age of 13, you are automatically independent

- If you are a legally emancipated minor

- If you are in a legal guardianship as determined by the court

- If you are homeless (lacking, fixed, regular, adequate housing)

In the wake of the changes in the economy and the increase in students going to college, the face of college campuses has changed along with the times.  Student’s have more options and flexibility for classes such as hybrid classes and getting their degree online. There have been changes that range from different majors offered to increased tuition, to a change in administration at many colleges across the U.S. Outlined below are the 5 top changes that are being seen at colleges and universities throughout the states:

1. Demographics: There are more students over the age of 25 than ever before; recent surveys suggest 40% of the student population is over the age of 25. Also the female to male ratio is said to be 60-40.
2. Community College & Proud of It: gone are the days when you do whatever it takes to get into that prestigious school. People don’t want to burden themselves with debt anymore, especially in an uncertain economy. There is also less judgment on where a person has a degree from when searching for a job. It’s the degree that matters, not really where the degree is from. (no including if you went to an IVY league school..that tends to make a difference).
3. Internet in the Classroom: Many professors have moved away from note writing on the blackboard and turned to planned out PowerPoint presentations, online videos and displays, and even using an online plagiarism tool to scan student’s work for plagiarism (watch out kids!).
4. Online Classroom Influx: The number of students getting their degree in the comfort of their own home has increased dramatically over the past 5 years…so to has the legitimacy of these degrees. This change has allowed  many people to continue to work full time and still earn a degree.
5. Purchase a college: These days parents and adult students are looking at college as a personal purchase…something they buy. If they aren’t fully satisfied with any aspect of it (grades, professor, administrative issues), the consumer speaks up and fights to change it. If a school is disorganized and run poorly, a student will transfer out instead of pushing through it. Hey…your paying for it, so you might as well be satisfied. This also has forced colleges to do everything possible to make the consumer/student content.

What about you? Share your experiences by leaving a comment…or add  ones I didn’t write about. If you are a returning student I would love to hear your comparison of college now as opposed to 5 or 10 years ago.

Just a quick note about this sticky topic. Why does it ask for your step parents info on the FAFSA even though your step parent may not support you financially in any way? Well the bottom line is this…the Dept of Education doesn’t pay any attention to whether your step parent contributes financially to you and your education but if your mom or dad remarries, that person’s income is considered part of your household and therefore must be reported on the FAFSA…there is no way around this. In a lot of instances this will make some student’s ineligible for grants because their household income is too high. It doesn’t seem fair but that is just the way it is. An alternative is waiting until you are 24 to go to school, then you would be completely independent!

For more information regarding financial aid and in depth FAFSA questions you can visit the financial aid forum.