FAFSA question...

[Patience]

Yup.

 

[Trishtack]

The EFC doesn't consider cost of living but the Cost of Attendance(COA) or Budget created by the school/college/university does. The EFC is subtracted from the Cost of Attendance to determine remaining need.

The FAFSA is never a waste of time unless you know you are going to pay full cash or Veteran's Benefits etc. Most schools require the FAFSA and again the EFC can be adjusted by the financial aid department in special circumstances.

For what the Department of Education disperses in grants and loans, the process of filling out a FAFSA is relatively painless in comparsion. When you think about it, where else will grant you money for free and/or loan you up to $57k as an Undergraduate and up to $137k as a Graduate student based on a few forms? The Department of Education does not ask for that much effort for students to receive funds. They do have a somewhat unrealistic expectation on what some families can afford to pay but again they are assuming you have planned and saved for your or your child's education. And they assume that until a child either marries, parents a child of their own, or reaches age 24.

 

[crisi]

I know filling out the FAFSA was pretty much a waste of my time, although it didn't really take as long as I thought it would. Our EFC is significantly higher than the cost of attendance and we are not planning to accept the unsubsidized Stafford loan ($5500?). After debating and debating, I finally decided to file one anyway because the Financial Aid office at the college where my daughter will be a freshman this fall stated it would be best to have a FAFSA on file in the event of some big change in our finances (death, disability, job loss, etc.) during the school year. If we didn't have one on file, they wouldn't be able to help. Death is not really an issue because of our life insurance but I decided to file one in the event of some other major change in finances. Better safe than sorry, I guess.

We will be in the same boat, a few years from now (assuming our boat stays afloat and doesn't go off course). And I agree, better safe than sorry.

We have been saving all along (well, since the kids got out of daycare, all that daycare money got funnelled into college savings), so I suspect that our ship won't just have to go off course, it will have to be boarded by Somali pirates and set on fire before we actually get aid.

 

[ctinct]

They also don't expect you to be paying for college out of just this year's paychecks. They expect that you have been saving all along. So even though your EFC might be 25% of your current yearly income, they don't think you will actually be spending 25% of your income.

Maggie

Exactly. I have often heard the figure of one quarter to one third of current income, but that is based on savings and current income. There is an asset protection allowance, but the government doesn't care if you're upside down in your loan or not. They DO care if you own a second home.

I believe colleges and the the education system, including the government, need to do a better job informing people about the importance of saving for college. I know it is not easy; in fact, I was unable to do it myself due to life circumstances I hadn't planned on (divorce). But, I think many of us know by now how important it is that we try to save something for retirement , but I seldom hear college savings talked about with the same sense of urgency. I have heard people say that if they have more saved, they will be expected to pay more, so why bother saving? This is simply not true. There is a formula for the FAFSA, and then on top of that, each school has its own formula. Moreover, schools are not obligated to meet your full need, so the efc figure is the absolute minimum you will probably pay, unless of course your student attends one of the service academies, one of the handful of virtually free schools, a school that costs less than your efc, your student gets HUGE merit aid, or attends one of the few schools that promises to meet full need, particularly without loans.

I went through the financial aid process for the first time in a LONG time last year (sixteen year spread between kiddos). It amazed me on financial aid info nights when parents asked things like "How much will FAFSA give me?" Ummm.....nothing. Not only that, the vast majority of schools do not need full need. Just because your efc is $5000, it does not mean that is the figure you will end up paying. Most schools leave a "gap." You could need to cover $10,000, $15,000, $20,000 or more per year.

I think another thing that shocks most people is that loans are aid. Your student will likely be expected to borrow money. There is a limit on those loans, but it increases every year.

Another big shock---work study does not guarantee a job. Also, the money your college may award in work study is expected to be paid to the school upfront, even though it has not been earned by the student yet. In reality, most students use that money as spending money.

I've said this before on other posts, but I'll say it again because it is so important. Every student needs to apply to a school the family can afford without aid. Also, take the college's financial aid rating into consideration when applying to schools. The schools my daughter applied to had financial aid ratings from 70% to 98%. I did not take my own advice because I didn't know any better at the time. We were so blessed that my daughter's top choice was the 98% one (which is the only school we went to look at AFTER I noticed the ratings in one of the college books we had, and that was one of the reasons we went to visit). I think it ended up being very slightly more out of pocket than our state university would have been, BUT the state school "awarded" us far more in loans , so the net cost to us is actually lower at the private school she now attends.

 

[Patience]

I think another thing that shocks most people is that loans are aid. .

I've said this before on other posts, but I'll say it again because it is so important. Every student needs to apply to a school the family can afford without aid. Also, take the college's financial aid rating into consideration when applying to schools.

I think this is important too. We told our daughter, long before she started applying, that we could afford to send her to a 4 year, public, in-state university without borrowing and without her having to graduate in debt so that is what she was looking for when she sent out her applications.

 

[Pigeon]

Also, take the college's financial aid rating into consideration when applying to schools.

Where do you find financial aid ratings?

 

[Trishtack]

As much as I would like to see every family be able to afford a higher education for their child, that is not realistic. Many students would not be able to attend at all if they only attended a school their family could afford. There are families that struggle to house and feed their children. Those children should be able to further their education. Loans are aid. Just as a mortgage is aid to purchase a home and a car loan is aid to purchase a car. I'll just end with it is very unrealistic to think most students can go to school on what their families can afford to pay.

 

[maggiew]

As much as I would like to see every family be able to afford a higher education for their child, that is not realistic. Many students would not be able to attend at all if they only attended a school their family could afford. There are families that struggle to house and feed their children. Those children should be able to further their education. Loans are aid. Just as a mortgage is aid to purchase a home and a car loan is aid to purchase a car. I'll just end with it is very unrealistic to think most students can go to school on what their families can afford to pay.

I think what the previous posters meant was that students should be realistic in their college choice based on ability to pay and amount of loans they would need to take out. For example, if you know your family will not be able to contribute much, it might be a better idea to check out in-state, public schools as opposed to those high price, private schools. Or maybe do a community college for a couple years then move on to the 4 year college. I don't think they were implying that only people who can afford to go to college should be the ones who go.

You hear so many stories now about students/families choosing the "dream school" even though it might result in a huge amount of student debt. They don't really think about the burden this might place on the student when they graduate. In some cases, choosing the cheaper, but still solid school that leaves you less in debt might be a better choice.

Another thing to think about is what your salary might be like when you graduate. I think it is unrealistic for someone majoring in elementary education (for example) to accumulate $80,000 in student loan debt. [I am a teacher, so I am not putting down teachers! I am just realistic with the salary potential!!! I teach because I love it, NOT for the money.]

Maggie

 

[ColoradoMom!!]

Some excellent points here I hadn't considered -and yes, we should have been saving all along (and have a bit) but we also were no-one near our current gross when said child was born, or even 5 years ago.

When does the info. get verified? We haven't filed our taxes, so we will need to make a few adjustments although they shouldn't be significant. We are soooo careful to be overly honest on everything we fill out like this, but it does beg the question -how or do they verify this info.? Can they legally tap into the IRS? Saving accounts info? I think they should for integrity of the program and all involved, but curious how?

 

[Pigeon]

As much as I would like to see every family be able to afford a higher education for their child, that is not realistic. Many students would not be able to attend at all if they only attended a school their family could afford. There are families that struggle to house and feed their children. Those children should be able to further their education. Loans are aid. Just as a mortgage is aid to purchase a home and a car loan is aid to purchase a car. I'll just end with it is very unrealistic to think most students can go to school on what their families can afford to pay.

While I am all for higher education (and work in it), there may be routes to a less expensive college degree that sometimes people don't think about. I think it's natural for a high school student to only visualize going off someplace for four years, to live on a nice campus and have a lovely time while getting their degree.

For some families, while that is lovely dream, it's not financially viable, but there may be other alternatives. For example, where I live there is a grocery chain that reimburses employees for a certain number of college credits per semester if they get good grades. My friend's kids both got two years worth of credits for free that way at the local community college, got all their general education requirements out of the way while working and living at home, and then transferred to a state university. It took them a couple of years longer to go to school while working, but they were able to save more money to help with the remaining two years.

That may not be the plan for everyone, but it was a great alternative for them that resulted in a degree and no debt. Sometimes it's not a bad thing to seek out some non-traditional routes to college.

 

[Magix]

Boy, I was pretty dumb for not realizing the EFC was an actual monetary number! Perhaps I was just trying to protect myself from the truth! So, my EFC is just shy of half of my income last year. I think that's because I took a sizeable distribution from my Roth IRA to pay off my credit cards (with the idea that getting out of debt would help me come up with the money to go to school). That amount was figured into my taxes, even though I did not owe any tax on it. So, FAFSA says I should have $18,000 to put toward my education. In fact, I might come up with $10,000. With tuition, accomodation and living expenses figured into the mix, I think I'm going go come up at least $22,000 short after Federal Loans. Going to school overseas can really make things difficult, when you consider the bad exchange rates.

Been having a major freakout about this for the last 24 hours or so. I have an acceptance letter in my hands. And now I don't know if I'm going to be able to come up with the money.

 

[a1tinkfans]

Boy, I was pretty dumb for not realizing the EFC was an actual monetary number! Perhaps I was just trying to protect myself from the truth! So, my EFC is just shy of half of my income last year. I think that's because I took a sizeable distribution from my Roth IRA to pay off my credit cards (with the idea that getting out of debt would help me come up with the money to go to school). That amount was figured into my taxes, even though I did not owe any tax on it. So, FAFSA says I should have $18,000 to put toward my education. In fact, I might come up with $10,000. With tuition, accomodation and living expenses figured into the mix, I think I'm going go come up at least $22,000 short after Federal Loans. Going to school overseas can really make things difficult, when you consider the bad exchange rates.

Been having a major freakout about this for the last 24 hours or so. I have an acceptance letter in my hands. And now I don't know if I'm going to be able to come up with the money.

Just wanted to wish you luck in getting it figured out and getting a good education while still trying to maintain some type of "life" financially!

 

[Trishtack]

Magix - I am sure you have already reviewed the info on aid for attending foreign schools but in case here is the link

http://ifap.ed.gov/ForeignSchoolInfo/attachments/FSFAQsStudents.pdf

The Grad PLUS loans are fairly generous. Do you have a COA or Budget from your school so you can determine how much aid you are eligible to receive?

 

[huskies90]

I have a sophomore in high school so I am just getting into the college game. I too am in a weird divorce situation. My ex and I had plenty of $$ saved for our children’s education (saving all along) but then the divorce hit. Since I make quite a bit more than my ex and was looking at a long drawn out alimony, I opted instead for taking all of our savings and giving her a lump some in lieu of alimony. I also bought her out of our family house (refinanced with equity pull) so that the kids could stay in the house after the divorce. She has since used most of this money to buy herself a house (putting quite a bit of cash down) and has been spending it to support her lifestyle and unemployed boyfriend who lives with her.

Fast forward to the future to where we will soon be filling out the first of our FAFSA applications. Since I have the house my daughters live with me about 75-80% of the time. The oldest daughter even less because she does not want to live with her mom mainly because she does not want to be around her mom’s boyfriend.

So, now my questions: I make a very good salary but have very little in savings now and it is hard for me to save because I have a ridiculous mortgage to pay thanks to the re-fi. My ex makes very little right now and is probably living off the marital savings considering what she paid for her house and her mortgage. She wants the kids to live with her 51% so that she can file the FAFSA. My daughter does not want to live there. Is the FAFSA worth it? How much aid would my daughter get living with her mom instead of with me? Is salarythe only thing they look at? What about assests, what about expenses? what about child support. I do not pay child support now but if the kids live there, I will pay her child support per our agreement (and I think the real motive why she wants the girls to live with her). Thoughts?

 

[Trishtack]

"So, now my questions: I make a very good salary but have very little in savings now and it is hard for me to save because I have a ridiculous mortgage to pay thanks to the re-fi. My ex makes very little right now and is probably living off the marital savings considering what she paid for her house and her mortgage. She wants the kids to live with her 51% so that she can file the FAFSA. My daughter does not want to live there. Is the FAFSA worth it? How much aid would my daughter get living with her mom instead of with me? Is salarythe only thing they look at? What about assests, what about expenses? what about child support. I do not pay child support now but if the kids live there, I will pay her child support per our agreement (and I think the real motive why she wants the girls to live with her). Thoughts? "

Huskies90 - First I'm sorry your children are in this situation. I think the much bigger question is their happiness. However, in regards to the financial aid impact - the EFC calculation will include any salary, savings, investments, rental properties and yes child support. Primary residences are not included. In addition, they look at how many live in the home and how many are college students. As of today, an automatic EFC is awarded if the parents' or parent's total income is less than $31,000. Otherwise you can use one of the three worksheets to calculate approximately what the EFC would be.

http://ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf

Let's assume for discussion sake that your ex was in the category where if the children were with her, the EFC would be $0. Based on the 2011-2012 award year, the student would be eligible to receive up to $5,550 in PELL Grant (free money - no flaming! Just a FA term) if she is a full time student the entire aware year at a Title IV eligible school. Several states have grants as well. In KY, she would also be eigible for $1,900 in grant money (based on first come first awarded by the date the FAFSA is completed). So in Federal funds, she would be eligible for approximately $5,550 in PELL, an amount of SEOG (determined by the school - minimum of $100 and often a maximum of $300), and then any state grants funds that are EFC contingent. So to answer the question, living with a parent 50% in order to receive a lower EFC would be worth financially a maximum of approximately $5,850 in grant money.

By having a low EFC, the student is also eligible to borrow a Perkins loan which is a low interest loan that is awarded after student loans.

Regardless of who the student lives with, either parent can apply for the PLUS loan.

I hope this helps.

 

[maggiew]

We filled out the FAFSA yesterday for our daughter and the EFC is .

Maggie

 

[My sister's princess]

I say it every time I see one of these threads. Please call your school. You were given some really really great information by one poster from Texas !!! (That isn't usually the case on these threads!)
You were also given some really bad information by another poster about when/how you should file your FAFSA, it completely depends on the school.

Quick note for anyone reading, the IRS data transfer tool is fantastic, and should be used by anyone who is eligible!!! If your file is selected for verification (where the school has to check information on your FAFSA) it will make the process much easier for you!!

 

[Magix]

Magix - I am sure you have already reviewed the info on aid for attending foreign schools but in case here is the link

http://ifap.ed.gov/ForeignSchoolInfo/attachments/FSFAQsStudents.pdf

The Grad PLUS loans are fairly generous. Do you have a COA or Budget from your school so you can determine how much aid you are eligible to receive?

I DESPERATELY need some help with all of this! I really don't understand how the Federal loans work. So, I filled out the FAFSA and it says my EFC is $18,036. Converted, that's 11,380.85 British Pounds.

Tuition is 12,600 pounds. Per the school website, the numbers they use for Federal Loans (excluding tuition) are these: Rent/Board (or Accomodations) 7,140 pounds/yr. Travel in UK/Miscellaneous 3,315 pounds/yr. One-time cost of flights to/from US, plus computer purchase/rental 2,000 pounds/yr. That's a total of 25,055 pounds for the year.

Their figure for travel in UK/Misc. is nowhere near their own suggestion for minimum yearly living expenses (9,000 pounds). I've been figuring 12,000 pounds (or 1,000 pounds/mo) for living expenses, just to be on the safe side.

So, if I add an additional 8,865 pounds, that brings the total to 33,920 pounds total for a year of study. Converted, that's $53,768.22. Good lord!

And, yes, I've looked domestically for schools that will offer me something close to the same specialization as this UK university, but there does not appear to be anything that remotely fits my needs.

So, if Federal Loans provide funds only toward the 25,055 pound total ($39,717.74) and we minus out $18,036 for the EFC, that means the Direct Stafford loan MIGHT offer me the max available $20,500. But, I'm still short by $33,268.22.

Ha ha ha ha ha!!!! That's the sound of desperation laughing.

So, if I move forward with school, and I desperately need to (notice how many times I've used the word "desperate"?), I'll pay $3,169.68 out of pocket for the tuition deposit to secure my space (2,000 pounds). That brings my post-Stafford loan need down to $30,098.54. We'll round it down to $30,000 even.

After all of that, am I correct that I cannot apply for any other Federal funding, since I've hit the maximum of $20,500? Or do the Grad PLUS loans allow me to borrow additional funds beyond that amount? I do not understand the regulations on the Grad PLUS loans. And, if I can't get a Grad PLUS loan for any amount over $20,500, where do I go? Every student loan I've found online is based on the FAFSA.

I'm so confused and about to give up hope. The LOGICAL thing to do would be to stay here at work for another 18 months and start school in the 2013/14 year, with a much larger amount of savings, but I'll still come up short. And I don't know if I can survive an additional year of working here. Or, if I can get my references to help me again next year (God forbid something should happen to my ageing, one-and-only academic reference!).

I have some hope that my father will take pity on me and offer to help me, but I cannot count on it. After all, I'm 43 years old and would really love to be able to do this without his help. Even if he does help, I'd wager it will come in the form of a loan, with interest (as we did that once, when I was much younger), so it's not much different than borrowing the money elsewhere.

HELP!!! What am I missing, if anything? Is there hope for me? Or am I up the creek with an acceptance letter and no money?