(Forbes) By Willard Dix —
I work with families with a wide range of incomes. When the time comes to discuss college costs, wealthier parents often tell me they won’t qualify for financial aid although paying the full comprehensive fee (tuition, room and board) will be a significant burden. Most parents initially assume that income is the primary measure of qualifying for financial aid from colleges and universities.
The reality is more complicated. Families should be scrupulous as they look for ways to pay the costs of college. They shouldn’t assume anything when it comes to financial aid. For one thing, family and student income is only the starting point of a financial aid calculation. For another, assuming you don’t qualify for aid is like not showing up for a tennis match–you lose no matter how bad your opponent is.
The centerpiece of the whole federal financial aid process is the Free Application for Federal Student Aid (FAFSA). Completing and submitting it enables families to see if they qualify for “more than $150 billion in grants, work-study funds, and loans,” according to the FAFSA website. And it’s not just federal money that’s at stake; many states and colleges use the FAFSA to determine a student’s eligibility for state and school aid. Additionally, private financial aid providers may use FAFSA information to determine aid qualifications. Consider FAFSA to be the gateway to the many financial possibilities for paying for college.
Remember that the FAFSA is about federal student aid eligibility such as Pell grants, work-study funds, and loans. But it’s the standard used by colleges and universities to determine the Estimated Family Contribution (EFC), which in turn leads to awards from the institutions themselves. Not filing leaves a family entirely out of the running for aid and colleges are under no obligation to guess what a family might need during aid discussions.
For the first time, the FAFSA became available this year on October 1 instead of the upcoming January 1. Additionally, instead of having to provide an estimate of this year’s taxes and then submitting actual numbers when they’ve been filed, families can use what’s being called “prior-prior year taxes,” meaning that real numbers from last year’s tax filing can be used, eliminating guesswork. Even better, families can opt to automatically fill in FAFSA tax information through the IRS, eliminating the need to find tax records. Instructions for that can be found here.
The new earlier filing date has caused some controversy within the college admission and financial aid world, but it provides families the advantage of getting a clear picture of aid they might receive well before any deposit deadlines. This situation is especially significant for students planning to apply Early Decision (ED) to a college, which requires a commitment to attend if admitted. Online filers can get results in 3-5 days, so anyone filing now (early October) can have a picture of finances going into an ED application, usually due sometime in early to mid-November. (For comparison, previous ED applicants wouldn’t be able to file the FAFSA until January 1, meaning they would be in the dark about financial aid decisions until well after being admitted.)
There’s really no reason not to file the FAFSA, so take the time to do it. (It has to be filed every year a child is in college.) I’ve had more than one family surprised by the results; you may be as well. For details about the FAFSA as well as the form itself, go right to the source, the Federal Student Aid site. It’s user friendly and comprehensive. And never assume anything about your family’s eligibility.
