Help me understand about the FAFSA

[minkydog]

But without getting too technical. Just looking at the paperwork makes my head hurt.

Am I understanding that they count the student's assets first and the parents' assets second? Do we need to reveal our 401Ks and IRAs? What about our investments, stocks, money market funds?

Here's the thing I'm concerned about. DD is a HS junior, so we'll be doing the FAFSA next January. I want to make sure we do this right--I don't want to declare anything we don't have to, but I sure don't want to lie about anything(I did read the fine print!) My DH has most of his long-term savings in his 401K, which is our primary retirement. We both have IRAs. And I have some investments, but no 401K. I"m afraid they're going to look at us on paper and say "Wow! These people can totally give their kid a free ride!" But here's the back story--we live on SSDI. Our income is at near-poverty level and our kids are on free lunches. Our medical expenses are high due to several of us having chronic illnesses. On paper, we probably look pretty good, but when you look underneath that the situation is not what it would seem.

I don't mind helping my daughter financially, but I don't want her to lose out on need-based financial aid. Our investments, 401ks, and IRAs are set aside for our retirement, plus the upkeep of our mentally handicapped son. I love my daughter dearly, but I cannot deplete those funds to put her through school. She will someday be able to support herself; her brother will not. So whatever we have saved when the time comes has to be able to support THREE people, not just two(ETA: She plans to work through college and get student loans)

 

[Shmily1]

It is so much easier to do the FAFSA online than on paper. The best advice I have is don't lie on it. They will find out. We were told 1 in 10 were checked and any kind of oddity stands out and gets checked. With your income being SSDI instead of actual paycheck, I think that would count differently.

 

[madge]

there are FAFSA calculators out there that will help you get an idea of what is factored in for your EFC.

http://www.fafsa4caster.ed.gov/F4CApp/index/index.jsf

whoever the FAFSA people are seem to think we can afford way more than we really can for DS. Drives me crazy.

 

[Chris2597]

The whole fafsa, grant, scholarship process is totally confusing. This is my third time going through it and I still dont get it....I have a new twist in getting ds24 enrolled. He is a late bloomer (still thinking he needs some miracle grow) and is just now wanting to go to school. He turned 24 a last week. We have never been able to recieve any FA because of dh and my income, but were told that our income would not be considered once ds turned 24. However, now we are told that FAFSA uses last yrs age and income for FA. Anyone know the facts?

 

[barkley]

if you have an extenuating circumstance (regarding medical expenses not covered by insurance...) we (dh and i-he goes to college) were advised to truthfully fill out the fafsa, but as soon as we got our response to schedual an appointment with the financial aide office at the college. then provide the information about the extenuating circumstances and see what the financial aide folks can do to have the information considered for federal, state and college financial aide programs.

you might even want to schedual (if possible, during a non heavy traffic period of time) an appointment with financial aide at the college your dd wants to attend PRIOR to next january. they might be able to tell you what paperwork you need to start earmaking to set aside for a secondary review.

they could probably give you some insight into how certain types of income and assetts are counted (though they seemed to look at our ssdi identicaly to any other type of income when we did the fafsa). you might especialy want to discuss with them if weather by virtue of one or both of you being on ssdi if some of the assetts they might not consider available now to the average person (like the 401k's and ira's) would be more heavily considered as an available resource-the reason i say this is, when i got approved ssdi some of the "retirement" funds i would have received a penalty for accessing prior to a certain age became penalty free available to me, and some programs (not sure if fafsa works this way) say if it's available it's accessable so it's applicable.

 

[Dan Murphy]

Student's then parent's. Retirement plans, personal residence, life insurance and annuity values are not considered. Number of family (not just children) members enrolled in college.

Here is a pretty decent short list.......

http://www.finaid.org/fafsa/maximize.phtml

As a life long career financial planner, I have recommended this book (updated annually, as rules do change) to my clients for years. http://www.amazon.com/Paying-College.../dp/0375429425 It is excellent, used it myself when my two were doing college.


(not to be taken as financial advice)

 

[powellrj]

I consider myself a reasonably competent person and FAFSA was my nightmare. Seriously, at one point, my DS received 3 letters from selective service because his mom was an idiot at filling out the forms.

I have to start again for this year and I am dreading it already. I did learn something interesting, we are much wealthier than I thought we were according to the government and if you are approved for loans its considered financial aid.

 

[golfgal]

Student's then parent's. Retirement plans, personal residence, life insurance and annuity values are not considered. Number of family (not just children) members enrolled in college.

Here is a pretty decent short list.......

http://www.finaid.org/fafsa/maximize.phtml

As a life long career financial planner, I have recommended this book (updated annually, as rules do change) to my clients for years. http://www.amazon.com/Paying-College.../dp/0375429425 It is excellent, used it myself when my two were doing college.


(not to be taken as financial advice)

One small correction, on this year's form it specifically says number of children in college, do not include parents.

OP, the online version walks you through everything and will give you specific examples of what you need to declare and what you don't. You do not have to include 401K's but if you have mutual funds outside of 401K's or IRA's you do need to include those. Basically, if you have immediate access to the money without having to take a penalty, you have to declare that amount. Your money for Christian is in a trust, correct? That won't have to be declared--again, you don't have access to that money.

Another new addition to the form this year is that they ask if a parent is a displaced worker (either unemployed or underemployed) and that is taken into consideration for next year's income.

As for income, they ask for your AGI (adjusted Gross Income) and if I remember correctly there is a spot that says something about disability income. I have ours mostly filled out based on our last pay stubs for 2009. We will hopefully be getting the rest of our tax documents soon to finish it. I found it fairly user friendly to be honest.

One confusing part is your home value. They want to know the difference between what you own and what your home is actually worth, if you are upside down with your mortgage, that is a good thing on this form .

 

[mominwestlake]

One confusing part is your home value. They want to know the difference between what you own and what your home is actually worth, if you are upside down with your mortgage, that is a good thing on this form .

I think a pp said they don't consider home value. If that is true, why do they want to know your home value? Are they encouraging people to take out a
2nd mortgage to pay for college?

I thought I read this year's version of the FAFSA is suppose to be easier than it was in the past. Is this true?

 

[MUFFYCAT]

I thought I read this year's version of the FAFSA is suppose to be easier than it was in the past. Is this true?

I hope so. Last year was my first time and it was a horror.

http://talk.collegeconfidential.com/s a messageboard like Dis that helps alot with everything pertaining to college.

 

[Tuffcookie]

Muffcat,

Thank you! I just signed up!

TC

 

[barkley]

One small correction, on this year's form it specifically says number of children in college, do not include parents.

OP, the online version walks you through everything and will give you specific examples of what you need to declare and what you don't. You do not have to include 401K's but if you have mutual funds outside of 401K's or IRA's you do need to include those. Basically, if you have immediate access to the money without having to take a penalty, you have to declare that amount. Your money for Christian is in a trust, correct? That won't have to be declared--again, you don't have access to that money.

Another new addition to the form this year is that they ask if a parent is a displaced worker (either unemployed or underemployed) and that is taken into consideration for next year's income.

As for income, they ask for your AGI (adjusted Gross Income) and if I remember correctly there is a spot that says something about disability income. I have ours mostly filled out based on our last pay stubs for 2009. We will hopefully be getting the rest of our tax documents soon to finish it. I found it fairly user friendly to be honest.

One confusing part is your home value. They want to know the difference between what you own and what your home is actually worth, if you are upside down with your mortgage, that is a good thing on this form .

the op realy needs to talk to a financial aide advisor-401 k's can become available WITHOUT a penalty under some disabilities, and when we did the fafsa last year and my ssd income got plugged in we were asked to provide information to the feds on certain assetts that others we know with no ssdi have never been required to report.

 

[kacaju]

thank you for the websites.

 

[Piecey]

One small correction, on this year's form it specifically says number of children in college, do not include parents.

I haven't looked at it yet, but seriously???
My husband and I both go to school but we no longer count??

I obviously have zero children in college.. since he's yet to get to first grade and all...

 

[Boo'sMom]

I just did FASFA online and found it remarkably easy.
The question regarding number of dependents in college was NOT specific to children...it was total number in household.

 

[Piecey]

I just did FASFA online and found it remarkably easy.
The question regarding number of dependents in college was NOT specific to children...it was total number in household.

Phew. Thank you.

I about had a heart attack.

We have zilch for info back- how are you guys already doing them??

 

[Irin997]

The whole fafsa, grant, scholarship process is totally confusing. This is my third time going through it and I still dont get it....I have a new twist in getting ds24 enrolled. He is a late bloomer (still thinking he needs some miracle grow) and is just now wanting to go to school. He turned 24 a last week. We have never been able to recieve any FA because of dh and my income, but were told that our income would not be considered once ds turned 24. However, now we are told that FAFSA uses last yrs age and income for FA. Anyone know the facts?

This is a very very GOOD thing. Because your son is financially independent now, he **should** get more free money like grants. I know I did cause I didn't make a lot of money.

 

[Boo'sMom]

this is our first year...so it's easy to start at "0"
I did notice the part about number in household attending college, because my husband will likely be going back to school, but maybe not this year.
Good Luck!

 

[Dan Murphy]

http://www.fafsa.ed.gov/fotw1011/help/sahelp07d1.htm

 

[testifyoncruises]

I guess I don't understand why anyone would fill this out. My DD is paying for her own college when it comes time. She won't be getting any type of loans but may apply for grants or even qualify for scholarships.

If she cannot afford it, she can work her way through school like me and DP did.