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.
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!
I’ve heard from countless students who’ve cried foul over the fact they can not get aid for school, but the best part was when they revealed to me that they did not even bother to complete their FAFSA. They had already come to the conclusion they would not be eligible because a couple of their buddies weren’t. I was just left scratching my head.
In 2007 alone, 16,000 eligible Massachusetts students failed to complete the FAFSA effectively leaving $59 million in federal aid on the table. I can’t urge you enough to complete the FAFSA. You can’t get a dime if you don’t complete that form. If nothing else you can at least take out a federal loan.
I love the Bay State and I love the Red Sox (first pitch of the ‘09 season is in 10 minutes), but I don’t love hearing that millions of dollars are going to waste that could help ease the cost of higher education for so many.
The Free Application for Federal Student Aid form has gotten a lot of media attention lately regarding needed improvements, but it’s not reasonable to expect any government program to run efficiently.
The university’s director of financial aid, Michael Scott, said in a Skiff article Tuesday this week that there were problems with the length, redundancy and inefficiency of the FAFSA system.
When I first read this story, I thought, “Whoa, we have an administrator named Michael Scott? How cool is that?”
The second thing that came to my mind was that even though students and financial officers have said that we need to make changes to the FAFSA to make it more efficient, the truth is that it’s never going to happen.
First, I point to other government things that are inefficient. Tax return forms, traffic, our public school system, the post office, the Department of Motor Vehicles and countless other things. Almost anything the government touches, seems to become unbearably inefficient. We should not be surprised that the FAFSA follows the exact same route.
Second, the government has no incentive to make these programs better. Sure, we could vote the people in charge out but we have done that for decades now and nothing seems to change.
My parents have as many waiting-in-line stories as I do about the DMV. The FAFSA may be improved for a while but then it will get out of date again and people will begin to have more complaints.
It’s great that the government provides this service to campuses around the nation to determine how much a student’s family can contribute. Something can also be said for the fact that it helps some families pay for college. However, I do not believe most people are getting a good deal with the FAFSA.
My family’s income hinders me from getting scholarships, but what the FAFSA fails to consider is that I have a disabled brother who requires a lot of medical attention. I am sure other students are in a situation like this as well. It’s insane that the government gets to decide who is more worthy to get money to go to school simply based on a few numbers.
Government is a good resource when it serves its intended purpose of protecting citizens’ rights to life, liberty and the pursuit of happiness like the Founding Fathers thought it should. It’s only when government tries to force its happiness on us that things really get messed up.
Let’s stop looking at ways that we could fix government and government documents and re-evaluate whether we need government to provide these services at all.
Michael Lauck is a freshman broadcast journalism major from Houston.
It seems that students who live in West Virginia may have some additional help in filling out the FAFSA form. Check out the article below from West Virginia Public Broadcasting.org. Can other states get in on this :)
Turbo Tax, Marshall Team up to provide FAFSA Help
By Clark Davis of West Virginia Public Broadcasting
March 26, 2009 · Intuit, the makers of Turbo Tax software, has developed a new product for West Virginia customers called Turbo Tax FAFSA.
Students and parents often dread filling out the Free Application for Federal Student Aid form each year. The form contains more than 100 questions that have to be answered before a student can apply for financial aid.
Now, through the cooperation of Marshall University and the makers of Turbo Tax, there may be an easier way.
Last fall, Marshall University President Stephen Kopp approached Intuit’s CEO and Marshall Alum Brad Smith about developing a program that would help students fill out the federal financial aid form
“The key value that we have in this first product launch this year is the ability to take data directly from your TurboTax product, so students and parents will go and complete their taxes using either one of our free or paid offerings,” Womack said.
“They will complete their taxes like they normally would and when they get to the end of it they can automatically transfer over all of that data from TurboTax into our new product TurboTax FAFSA. Depending on the situation up to 50 or 60 percent of the data required on the financial aid form comes directly from the tax return.”
Womack says they realized the importance of making it easier for students to apply for financial aid in today’s economy.
“Especially in an economy this year where lots of people find themselves needing more help and in general there are more people trying to go to school,” Womack said.
“All that kind of comes together into a climate where it’s really important to get as many people into getting financial aid applications done quickly and easily and early so they have the best opportunity at getting the financial aid.”
Wayne High School counselor Lynnetta Welker thinks the program will make it easier for students and their parents to fill out the federal financial aid form.
“We have families that don’t want to deal with the paperwork and lot of times the student themselves will come to me and they’ll say my mom and dad won’t do this for me will you help me,” Welker said. “And we do and if the child has trouble getting the tax information and we’ve had trouble with that in the past, maybe if there parents think no one else will see it and it’ll just transfer it will make it easier because I’ve had parents that they don’t want anyone else to see their tax information.”
And Welker sees this as an opportunity for students who might not go to school without the help of finical aid.
“With any luck will have more students fill out the FAFSA in order to get the money so they will go on to school,” Welker said. “A lot of them just think they don’t have any hope of having the financial stability to go to school and this way they will. I think it’s going to be a great help, even this year alone with the online FAFSA students have filled out a lot more and we’re sending a lot more to college this year. It’s really going to make a big difference.”
The program is only available for West Virginia residents when they submit their taxes online using Turbo Tax; however, the company may make the program available nationwide if it does well in West Virginia.
The FAFSA was created in 1992 to “simplify” applying for financial aid. Simplify? I cringe to think what the process was like before the current six page, 100 question document. What, did they have you walking over hot coals while reciting your available income and asset details? Were you required to battle to the death, like a gladiator, for the right to file your application? The current process is painstaking enough.
The truth is many Americans are so intimidated by the application process that they don’t fill out a FAFSA, and sadly, those are usually the families that need aid the most. Last year congress ordered the form streamlined, but in the same bill they added seven new questions to the application. Can someone please tell the left hand what the right hand is doing?
Even for those who do complete the FAFSA, many feel the form does not accurately depict a families financial need as it does a poor job of assessing financial worth and does not factor in the high cost of living. In addition, many students do not get assistance from Mom and Dad, although parental income and assets are used when determining eligibility for dependent students (those under 24). Is that fair?
The FAFSA reminds me of that old Crosby, Stills, Nash, and Young song, Love the one you’re with. If you can’t have the form you want, love the one you’ve got.
Do you feel the FAFSA application is challenging? Do you think it’s unfair? We want to know. Sound off!
In a national address on Tuesday, President Obama spoke about making some important changes to the financial aidapplication (FAFSA), with the goal of making it easier for people to apply for financial aid. He called for plans to simplify the FAFSA form by reducing the number of data elements asked for on the application. He also said it could be simplified by corroborating with the information the IRS already has in regards to income (NO, they do not already do this).
Currently the FAFSA has over 100 questions on the application, and for a student that is applying without the help of parents this can be a pretty daunting feat. It also can be confusing for parents to fill out because it does ask for extensive details about income and assets. Records show that in 2008 there were about 10 million FAFSA applications filed. A recent changed that is already in effect makes it possible for students who have no contact with their parents to file an appeal through their school so that they can still file a FAFSA without their parents’ information. This also works if the parents just refuse to release their information. For those who are unaware of the dependent v. independent status when it comes to financial aid, it may come as a surprise to you. The government views you as dependent if you are under the age of 24, and you are not married, you do not have a child, and you are not in the military. Even if you do not live with your parents, you live alone and work to support yourself, like a lot of young adults do, the FAFSA still requires your parents’ income information.
This recent change may make it easier for students to get that form filled out in these circumstances with the help of their financial aid officers at their schools. The simplification of the form and the change stated above should result in an increased number of FAFSA applications filed. …right? More FAFSAs filed typically means more students are applying to college, which is Obama’s ultimate goal. So while it can’t hurt to make the current FAFSA less confusing, what do you think about the way it is now? Is it that terrible that it is prohibiting people from filling it out? I want to hear what you guys think…
It was Benjamin Franklin that quipped, nothing is certain but death and taxes, but in the world of financial aid the FAFSA is at the top of that short list. Completing your FAFSA is an absolute must. Without it I can tell you with great certainty that you will not receive federal grants or loans, so kudos to you for getting that done.
For those who have not yet completed the FAFSA, or wish to review our tips for effectively filing your FAFSA, in order to maximize your financial aid benefit package, (click here). Remember, you can always resubmit your FAFSA with updated data, which may lower your EFC (we’ll discuss EFC in greater detail shortly).
For the rest of you that completed and submitted your FAFSA and are wondering what to do next; you’ll have to wait as the Department of Education processes your application. When they’re finished they will send both you and the schools you highlighted on the FAFSA a three page report called a Student Aid Report (SAR).
The SAR is a report of what the government believes you can afford to pay out of pocket for college in the form of EFC, or Expected Family Contribution. This number is located in the top right hand corner. The lower the EFC number the greater the financial need.
As mentioned, the SAR is also sent to the colleges of your choice (up to six schools max), from which they create a financial aid awards letter detailing what aid they’re able to offer you. You will most likely receive this awards letter in the mail.
The awards letter is a comprehensive breakdown of all school related expenses, scholarship and grant money you qualify to receive, work-study eligibility, as well as the financial resources the school feels you have at your disposal to pay for one year of attendance. They also give recommendations as to the best loan options available.
The most common loan option students take advantage of when paying for school is the Stafford loan, which is divided into two categories, subsidized and unsubsidized.
Subsidized Stafford loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government “subsidizes” (or pays) the interest during these times. No payments are expected on the loan while you are enrolled as a full or half time student.
Unsubsidized Stafford loans are not awarded based on financial need. Any eligible student can take out Unsubsidized Stafford Loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full. No payments are expected on the loan while you are enrolled as a full or half time student.
For the upcoming 2009-2010 academic year the interest rate for subsidized Stafford loans, for undergraduate students, is fixed at 5.6%. If you fall into the unsubsidized category you will be extended a 6.8% fixed interest rate.
Private loans have also become a very attractive alternative these days with the prime rate at a 55-year low. Most private loans do require a co-signer. But the key is to send your FAFSA to as many schools as possible in hopes of fielding some attractive offers and limiting the amount of funds you need to borrow.
If you list multiple schools on your FAFSA you can use one school’s offer (awards letter) against another to try and land a better deal. Most schools generally set a May 1 deadline, which is why the financial aid officers refer to April as haggle month. Students and parents generally try to haggle for a better deal before the May 1 deadline.
So as you can see the FAFSA is just the beginning of the financial aid process, with many more steps in tow. But unlike the little engine that could, which repeated its motto I-think-I-can, as it climbed over that mountain top, I-know-you can! I know you can get thru the financial aid process, although sometimes it can seem daunting and overwhelming. You can do it, I just know you can.
For all you hungry scholarshippoints members out there enjoy this code worth 10 points, FAFSADONE.
If you are a financial aid administrator, high school guidance counselor, or other representative of an institution of higher education, please link and share the eBook with your students. This guide will help them complete the FAFSA correctly and quickly!
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