March 5, 2010
Attention parents! Today marks March 5, and school financial aid deadlines are here, or very close. The majority of schools require all paperwork to be in during this month in order to fairly distribute financial aid and have plenty of time to assemble students’ award packages.
So, what can you do to make sure it all goes smoothly?
1. Make sure your taxes are filed.
This may be a “what?” moment if you are new to the FAFSA process and/or this blog, but in order for your child or ward to file their FAFSA, they need information from you. Specifically, they need your Annual Gross Income figure from your 1040 or 1040EZ form.
If you are the type to hold off on filing taxes until April’s cutoff date, you are putting the student in a diminished position to get the maximum amount of aid possible for the upcoming school year. If you absolutely must hold off, have them file with the previous year’s numbers and then submit an amended FAFSA as soon as your taxes are complete. You can find all the relevant forms and processes on FAFSAOnline.com.
2. Gently, but firmly remind your child.
Nobody likes paperwork. However, if you and your family need aid money from the government or school to pay for your child’s education, you can’t afford to let the FAFSA sit on the back burner. If necessary, you should put a day on your calendar (in the very near future) to sit down with them and help them complete it; this will ensure it gets done, and is filled out correctly.
If you need any advice, or would like to know more about how the FAFSA works, check out the FAFSAOnline.com blog for lots of relevant and interesting posts.
February 26, 2007
The New York Daily News had a great article on paying for college, written by George Chin, CUNY’s director of financial aid, with a wonderful Q & A on Financial Aid and the FAFSA Application that I’m including below:
What information is used to calculate the estimate?
The adjusted gross income (as listed on your tax returns) of you and your parents. Other key factors are assets, family size, the age of the parents and number of kids in college. A student with family income of $38,000 and few assets obviously has a better chance of getting aid than one from a family making $180,000 with a portfolio of investments and a summer home.
What’s considered an asset?
Parental assets include equity in a second home, stocks, bonds, college savings plans, businesses and farms (there aren’t too many of these in our area!). Students’ personal savings, businesses, stocks and bonds are also considered. The main residence and retirement plans such as 401(k)s and individual retirement accounts are not included.
Are we expected to use all of our assets to pay for college?
No. The formula acknowledges other important expenses, such as saving for retirement. An “asset protection allowance” also is applied to offset a family’s net assets.
My parents are in their 60s. Does that affect the calculation?
Absolutely. The asset protection allowance, recomputed annually, grows as parents grow older.
Does a student get a break if more than one child is in college at a time?
There’s an adjustment lowering the estimated contribution. With two kids in college, the estimate for one is roughly halved; for three, it’s cut into thirds, etc.
How is family size a factor?
Income is offset based on household size. A family of four with one child in college has $23,560 offset against income. A family of six with a kid in college gets $32,510 offset.
Is the estimated contribution what we’re expected to pay the college in cash?
No. Part of it covers costs normally incurred for kids in school, such as clothes and food. You cover the rest from savings and loans.
Will all colleges rely on the estimated family contribution to determine whether I get financial aid?
Yes and no. All colleges use the amount for federal aid. Info from the College Board is another measure used by many, more expensive private colleges when they award institutional aid. The College Board system, called Profile, collects more financial data than the Free Application for Federal Student Aid for a more complete analysis of a family’s ability to pay. Under FAFSA, for example, 7% of gross income is offset as an allowance against local taxes. Profile applies different offsets to different income levels. For all colleges, fill out FAFSA first. Colleges will tell applicants if they require a Profile form, as well.
How high can my estimated family contribution go?
To $99,999 (no need-based aid there). If you attend a modestly priced private school or CUNY and have annual school costs of $11,000 and an estimated contribution of $11,000, you won’t qualify for aid. Your estimated contribution is the same whether you apply to CUNY, Harvard, NYU or Stony Brook University. It’s based on your finances, not your school.
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