Archive for January, 2010

Thinking about going back to school, but don’t know where to start? Amanda Ly, a freshman at East Los Angeles College, wrote a gripping and informative LA Youth article about her initial experience with choosing and paying for college:

Hit with the real cost of college

Although her college plans didn’t turn exactly as she had hoped, Amanda’s financial situation will feel familiar to many students and her description of her experience in navigating student loans, and her hard-won advice, will benefit all readers—whether you’re a new high school graduate or a nontraditional student returning to school. For an introduction on college planning, take a look at this student’s thoughts about what she learned during her college selection and application process.

Top tips: What to find out from the school(s) you’re considering and how early to start planning how you’ll pay for college.

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Yesterday, one of our companion sites received a helpful email from an administrator in the Financial Aid Office of University of the Sciences in Philadelphia, PA. Ms. Pamela Ramanathan pointed out that when it comes to dependent student vs. independent student status on the FAFSA, “Students must provide parent information on the FAFSA unless they meet the qualification for independent student. Not being claimed on your parents’ tax return does NOT make a student independent. Even if students are not claimed on their parents’ tax returns, they usually still have to provide parent information.”

This is the kind of insight that is valuable for having come straight from an expert working with real people in real situations. Thanks, Ms. Ramanathan! The clarification prompted a curiosity to know more about this FAFSA issue.

What’s the difference between Dependent Student and Independent Student status on the FAFSA?

Essentially, dependent students must report their parents’ income and assets on the FAFSA in addition to their own. Independent students report their own income and assets (and those of their spouse, if they’re married). Generally, they do not have to report their parents’ income or assets.

In fact, it’s easier to define independent student status first, because dependent student status, well, depends on whether or not you fit independent student status.

Reminder: If you’re planning to enroll in a higher education program that starts between now and June 30, 2010, you must file a 2009-2010 FAFSA. If your education program doesn’t start until after July 1st, you’ll submit the 2010-2011 FAFSA.

Definition of “Independent Student

For federal financial aid eligibility, you are an independent student IF AT LEAST ONE of these criteria applies to you:

  • You are 24 years old or older (Born before Jan. 1, 1986 for the 2009-2010 FAFSA; born before Jan. 1, 1987 for the 2010-2011 FAFSA).
  • You’re married on the day you apply for financial aid (even if you are separated but not divorced).
  • You are or will be enrolled in a master’s or doctoral degree program (beyond a bachelor’s degree) at the beginning of the academic year* your FAFSA is for, 2009-2010 or 2010-2011.
  • You’re currently serving on active duty in the U.S. Armed Forces for purposes other than training.
  • You’re a veteran of the U.S. Armed Forces. (A “veteran” includes students who attended a U.S. service academy and were released under a condition other than dishonorable.)
  • You have children who will receive more than half their support from you during the FAFSA academic year*.
  • You have legal dependents (other than your children or spouse) who live with you and who receive more than half their support from you now and through June 30, 2010 for a 2009-2010 FAFSA or June 30, 2011 if you’re filing a 2010-2011 FAFSA.
  • When you were age 13 or older, both your parents were deceased and you were you in foster care or a dependent or ward of the court.
  • As of the day you apply for aid, you are an emancipated minor as determined by a court in your state of legal residence.
  • As of the day you apply for aid, you are in legal guardianship as determined by a court in your state of legal residence.
  • At any time on or after the July before you file your FAFSA, your high school or school district homeless liaison determined that you were an unaccompanied youth who was homeless.
  • At any time on or after the July before you file your FAFSA, the director of an emergency shelter program funded by the U.S. Department of Housing and Urban Development determined that you were an unaccompanied youth who was homeless.
  • At any time on or after the July before you file your FAFSA, the director of a runaway or homeless youth basic center or transitional living program determined that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless.

These are the standard criteria for defining an independent student on the FAFSA. If none of them applies to you, you are considered a dependent student.

You can find additional details and downloadable tip sheets on dependent student vs. independent student status, parents and stepparents, and dependent students in special circumstances at Student Aid on the Web Publications, Forms, and Brochures.

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* A number of “independent student” criteria are restricted to specific academic years. For the purpose of federal financial aid and the FAFSA, relevant academic years are defined as:

  • 2009-2010: July 1, 2009 to June 30, 2010
  • 2010-2011: July 1, 2010 to June 30, 2011

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Have you ever felt like you watched a paycheck come in one door and go out another before you could say “savings account”? Well, the beginning of the new year is an excellent time for advice on saying “hello” to more money and saying “goodbye” to burdensome debt. So, we looked around for just that kind of advice. Here’s what we found:

In the Boston Globe, personal finance guru Suze Orman listed her Top Money Tips for 2010. Check out this advice on saving money, paying cash for purchases, understanding mortgages, preparing for being laid off, and finding career paths for prosperity.

Favorite quote from this article, re: finding a job:

“You should go into a field where you really want to spend the rest of your life. If you can just do what you want to do and you can be the best at what you want to do, better than anybody else out there, you will create a job for yourself. Just because there’s a job market out there this month or next year in an area, it doesn’t mean it will be there a few years from now—look at the car industry.”

And at Bankrate.com, Steve Bucci provided 10 Ways to Dump Your Debt in 2010. Considering that the Class of 2008 carries an average of $23,200 in student loan debt (and often far more than that), any practical and effective advice on how college students and graduates can start eliminating their student loan and credit card debt is a step toward a brighter future.

Welcome to the last year of the first decade of the new millennium!

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