Did you know you are not required to complete your IRS federal tax return before filing your FAFSA? It is a common misnomer that it is required when it is simply encouraged.
Having your federal tax return complete will save you a LOT of time when completing your FAFSA. The reason being is that a number of items on the FAFSA refer directly to your 1040 tax return.
So a recap. Is your tax return required before completing your FAFSA? NO. Is it encouraged? YES.
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 [...]
New financial information must be captured, whether good or bad, which aids in determining your eligibility. Thankfully you don’t need to complete the entire form from scratch again. You can “update” your FAFSA from year to year with the pertinent details. Happy filing!
To make it easier for prospective students to figure out how much it will cost them to go to college, Congress last year passed a higher education law that, among other things, requires all colleges to offer a “net price calculator” on their Web sites by 2011.
Many colleges and universities have been doing this for some time, and last week the Massachusetts Institute of Technology joined them, introducing its own calculator that allows prospective students to get detailed estimates of their out-of-pocket costs as well as their eligibility for financial aid.
Such calculators are likely to provide a closer approximation of the true costs of particular colleges than general calculators available on multiple Web sites, or the Free Application for Federal Student Aid (FAFSA), which offers a figure for the Expected Family Contribution (EFC) but does not take into account the criteria of individual schools.
“It was like using a shotgun to kill a house fly,” Daniel Barkowitz, director of of M.I.T.’s student financial aid, said of the FAFSA. The M.I.T. financial aid calculator gathers all the data from the FAFSA and adds additional questions on home equity, school and medical expenses. “The major thing keeping people from college is perceived cost. The calculator demystifies the sticker price.”
On Mr. Barkowitz’s blog, prospective students posted responses to the launch of the new calculator. “Thanks so much, this makes me even more determined to shine on that MIT app!” wrote Cody Dean.
The calculators are intended to assist candidates who are eager to find out early if they can afford the school that they hope to attend. In addition to M.I.T., Princeton, Yale, Williams College, and Amherst College already have estimators and Harvard has one under development.
Although the calculators are the result of much testing with real cases, many developed by Think Ahead LLC, some calculators have restrictions, such as excluding international students, and others are not intended for use by divorced couples. They also leave out scenarios such as a parent losing a job, which would require a human interaction with a financial counselor.
Mark Kantrowitz, publisher of the financial aid Web site FinAid.Org, said in an e-mail that elite colleges “may be implementing calculators now more to show how their colleges cost less out of pocket as a recruiting tool, rather than to fulfill the federal requirement.”
Robin Moscato, director of undergraduate financial aid at Princeton University, said that the school first added its calculator to its Web site in 1998.
“There was some concern that in putting up an estimator that prospective students and their families would use it incorrectly and be very disappointed” said Ms. Moscato, “But they feel like the estimator is a good prediction of what they expected to receive.”
If you are completing a paper FAFSA, you can only list four colleges in the school code step. However, you may add more colleges by doing one of the following…
1. Use your Federal Student Aid PIN and go to FAFSA on the web at www.fafsa.ed.gov. Select the “add or delete a school code” link.
2. Use your SAR report. Your Data Release Number (DRN) verifies your identity and will be listed on the first page of your SAR. You can then call 800-4-FED-AID and provide your DRN to a customer service representative, who will add more school codes for you.
3. Provide your DRN to the finnacil aid administrator at the college you want added, and he or she can add their school codes to your FAFSA.
Note: Your FAFSA record can only list up to ten school codes. Any new schools you add over the alloted ten will require you to delete one of the ten
According to socialsecurity.gov if you are a blind or disabled child who is regularly attending college, or a course of vocational or technical training, you have limited earnings potential that is not counted against your Supplemental Security Income (SSI) benefits. In fact, the maximum amount increased for 2009.
Income Exclusion Amounts for 2009 For 2009, the student earned income exclusion amount is $1,640 per month, and $6,600 for the year. That’s up 5.8% from 2008.
What exactly qualifies as Untaxed Income on your FAFSA (Question 95i)?
This question/category is kind of vague. Some examples shown are worker’s comp or disability, but the more illustrative list is the list of what not to include, such as student aid (including scholarships), earned income credit, tax credits for kids, welfare, Social Security, workforce investment, combat pay, flex saving plans, foreign income, and most other tax credits like special fuels. Chances are most people don’t have anything to add here – if you think your parents might, you’ll want to consult a qualified financial planner with them.
Online education has undergone a metamorphoses in recent years, not unlike the ugly caterpillar that blossoms into a beautiful butterfly. The concerns once raised by skeptics centering around the validity and relevance of an online degree in the marketplace have since been quelled. Questions now tend to focused on payment options. I think you [...]
One of the new questions on the FAFSA this year (question 103) asks if you are a dislocated worker. But what is a dislocated worker? Let me clarify for you. You are a dislocated worker if you meet one of the following conditions;
- Lost your job or been laid off
- Are receiving unemployment benefits and are unlikely to return to a previous occupation (like a telephone switchboard operator)
- Are self employed but unemployed due to economic conditions or natural disaster
- Are a displaced homemaker – someone who previoulsy provided unpaid services to the family, like a stay at home parent, is no longer supported by a partner, and is having trouble finding a job.
There are some changes that will occur for this upcoming 2009-2010 school year that will effect any student that receives some sort of Federal aid. These changes are due to the 2009 Economic Stimulus bill. Here is a breakdown of the changes and what it means for you and your financial aid:
Pell Grant increases: The maximum annual amount for Pell Grants (free scholarships for lower-income students) increases from $4,731 to $5,350 in 2009. Congress is considering President Obama’s proposal to further boost the maximum to $5,500 next year.
Pell Grants needn’t be repaid and can be used for tuition, books and living expenses while enrolled at a participating institution. To apply, you’ll need to complete the Free Application for Federal Student Aid (FAFSA) form at www.fafsa.ed.gov. Note that the federal deadline for FAFSA submission for the 2009-2010 school year is June 30, 2009.
New tax credit: The Hope Scholarship, an educational tax credit that reduces a student’s or family’s tax liability, is being replaced in 2009 and 2010 by the more robust American Opportunity Tax Credit. Enhancements include:
* Maximum credit amount increases from $1,800 to $2,500.
* Tax credits can now be claimed for all four years of college, instead of only the first two.
* Those with an adjusted gross income (AGI) of less than $80,000 ($160,000 for joint tax filers) qualify for the full credit – a significant increase over previous years. The credit gradually phases out for AGI between $80,000 and $90,000 ($160,000 to $180,000 for joint filers).
* Unlike Hope Scholarships, this credit is partially refundable, which means lower-income families paying for college can receive a refund of up to 40 percent, even if they owe no federal income tax.
Federal Work Study Program expansion: About $200 million has been added to this program, which provides on-campus part-time jobs to students. Eligibility is determined by information provided in the FAFSA.
Financing computers: Tax-free withdrawals from 529 College Savings Plans are now allowed for computers, in addition to tuition, room and board, and books.
Federal Stafford loans: An additional $2000 in the unsubsidized loans will be available for dependent students. Also, the interest rate for subsidized loans will decrease from 6.0% to 5.6% after July 1, 2009.
So with all these additions to the Pell grant, Stafford loans, work study etc…it seems like a lot of people should be seeing more aid in their award letters for the 2009-2010 school year. If you receive more financial aid, what will that mean for you? How will it help you personally? Leave a comment, share with me, and happy Friday:)
**For Scholarship Points members enter the code STIMULUS2009 to collect your points!
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receives some sort of Federal aid. These changes are due to the 2009 Economic Stimulus bill. Here is a breakdown of the changes and what it means for you and your 