Tag: FAFSA

Here’s a treat for a Monday: a chance to share good news about the challenging FAFSA. This month and next, volunteers are standing by to help you fill out a FAFSA, in person, so you can get federal financial aid for college.

Kim Clark, who is always on top of financial aid news at U.S. News & World Report, just alerted her readers about the free FAFSA assistance in her article, Applying for Financial Aid Will Be Easier in 2010. Apparently, some of the volunteers will be tax professionals who will help students with both the FAFSA and their tax returns.

Since the FAFSA is the application you have to fill out in order to get a Pell Grant (and maybe other federal grants for college), getting free help with both the FAFSA and the 1040 sounds like a well-spent afternoon.

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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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After a year of daunting news about student loan debt and broken state financial aid budgets, EducationGrant.com is happy to share this positive assessment of Santa Claus’s readiness for his big night, from his personal physician at University of North Carolina School of Medicine:

Although a bit conservative (they would like him to lose weight), the rest of Santa’s UNC medical team nevertheless appears optimistic about his continued employment. (Santa’s endocrinologist needs a little gender sensitivity training, however.)

For students in need of financial aid to attend college, North Carolina has a substantial collection of scholarship programs and sources. The Carolina Covenant program, for example, provides a debt-free education to qualified low-income students.

UNC Chapel Hill was the nation’s first state university (1795) and the only public university to award degrees in the 18th century. If you are or plan to be a UNC student, check the university’s Office of Scholarships and Student Aid for instructions on how to get started. The UNC Office of Adult Services and Evening Services has scholarship resources for single moms and other nontraditional students, and for North Carolina residents, the College Foundation of North Carolina has a long list of providers of both need-based and merit-based scholarships.

And check back here next week for information on the 2010 FAFSA. January 1, 2010 is the first day you can start filling out a FAFSA for a college program that starts after June 30th. The first step: applying for a FAFSA PIN (Personal Identification Number) and filling out a FAFSA practice worksheet to familiarize yourself with the official form.

Until then, EducationGrant wishes all its readers, and college students everywhere, safe and happy holidays!

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Each year, the U.S. government provides more than $100 billion in federal financial aid to help students pay for higher education. “I’m Going,” the Federal Student Aid website, shares the stories of a few of these students. In one video, Delia describes how she got help with the financial aid application, then turned around and helped her single mom to go to college, too:

“My mom learned from me! She went back to school and got her GED. Then I helped her fill out the Free Application! In two years, she became a nurse.”

As of 2007, there were 10.4 million single moms living with children under age 18 in the U.S., and it’s probably a safe bet to say that many, if not most, are heroes to their children. Being a mom is not easy; being single mom is even tougher. You’ll find stories all over the Internet about both single and married parents who inspired their children to pursue dreams and goals never accessible to the parents themselves. Delia’s story is a treat.

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New FAFSA: Latest Update

One enhancement of the new FAFSA that we’ve heard a lot about is the ability to electronically import your latest tax return data directly from the IRS website into your online FAFSA, replacing tax questions you would have had to fill in by hand. The electronic retrieval of IRS information is scheduled to begin in January 2010, but Stuart, an EducationGrant reader, pointed out that I was incorrect in some important details, and he was right. A little more research led me to information from the National Association of Student Financial Aid Administrators about how this new technology is going to work. For starters, it’s going to be rolled out in stages (which seems like a sensible plan).

At first, the new IRS information retrieval feature will only work for importing 2008 tax return data into a 2009-2010 online FAFSA, and the retrieval technology itself will not be available until late January 2010, rather than January 1st.

Once the IRS info retrieval function is fully tested and proves to work successfully, then importing 2009 tax return data into a 2010-2011 FAFSA may begin sometime in the summer of 2010.

The NASFAA stated that the IRS Data Retrieval process will be available to dependent and independent student who are 2009-2010 FAFSA-on-the-Web applicants, and the parents of dependent applicants, who meet all of these criteria:

  • You must be filing an initial or renewal 2009-2010 FAFSA (IRS Data Retrieval will not be available for corrections entry for 2009-2010)
  • You must have a PIN, which is required to access tax information on the IRS database, as well as to sign and submit the FAFSA online. (Any student or parent who does not have a PIN will get the opportunity to apply for a PIN and use it immediately to both transfer IRS data and submit the FAFSA, but to prevent glitches, it’s faster to get your PIN ahead of time.)
  • You must have a valid Social Security Number (SSN)
  • You must have filed a 2008 federal tax return
  • Your marital status has not changed since December 31, 2008

Other changes to the FAFSA, such as a streamlined form, the ability to skip questions that don’t apply to you, and instant estimates of Pell Grant eligibility, should be available even in the 2009-2010 FAFSA in January.

Here’s a quick look at the current (2009-2010) and new (2010-2011) online FAFSA forms, from the U.S. Department of Education’s Federal Student Aid Annual Report (FY 2009):
2010-2011 fafsa sm3

Stay tuned to EducationGrant for more updates on the new FAFSA over the next several months, and in the meantime, thanks to Stuart for the IRS retrieval clarification.

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Kristi, an EducationGrant reader, wrote in with an excellent question: what’s the secret to getting more financial aid when your personal finances get hit by the recession? More specifically: since the FAFSA bases your ability to pay for college on the previous year’s tax return — the one before you lost your job and your income — how can it help you get the amount of financial aid you actually need?

FAFSA OnlineWell, it’s true, the FAFSA seems a little screwy in the way it calculates your ability to contribute to your college education from your prior year’s tax return rather than on your current financial circumstances. Believe it or not, there is a reason for this, but unfortunately, it only holds true in a stable, prosperous economy. When students try to make the most out of their job loss by returning to school, however, their need for any financial aid at all is probably because they don’t have an income any more. In 2009, many students are in this boat.

The secret to getting a more realistic amount of financial aid

Is there a way to overcome your FAFSA’s inaccuracy? How do you tell schools that you don’t really have the income that your earlier tax return says you do?

Karen Stabiner, author of The College Insider column at The Huffington Post, says:

“So here’s a secret right up front, from a long-time financial aid officer: The letter of special circumstance. When you’re done with bubble grids, write a letter that says whatever you think a college needs to know: That the money you have is earmarked for seven dependent relatives, that the money you don’t have is due to altruism and not misguided greed, that you’re willing to sell your second car but you’re too young to cash in the IRA without a penalty.

“It is your one opportunity to be a human being and not a set of numbers. If you need money, don’t be shy. Write the letter.”

What’s a letter of special circumstance?

Another name for the “letter of special circumstance” is “letter of appeal.” By either name, it’s an opportunity for you to explain to the school(s) you’re applying to how your personal finances have changed since the tax return information reflected on your FAFSA, and the reasons you need more financial aid than your FAFSA indicates.

A financial aid appeal is a letter of special circumstance plus a little more, including:

  • Call the school financial aid office first to see if there’s an appeal form they require in addition to your letter of special circumstance.
  • You’ll need to provide proof of your current circumstances— a copy of an unemployment benefits stub, for example.
  • Be as thorough and detailed as you can about any sources of income you have and all the expenditures in your budget, such as a mortgage, rent, and car payments.
  • If you’re a custodial parent or a parent paying child support, say so.
  • Share the education goal you hope to achieve and why you think their school’s program can help you meet it.
  • If additional financial aid will make or break your ability to enroll, say that, too (but be careful to sound grateful for their consideration, not demanding!).

Where do you send your letter of special circumstance?

You don’t send your letter of special circumstance in with your FAFSA. You send it to the school you’re applying to because it’s your school’s financial aid office that will handle your request for more aid. Your school may have its own grants for students who experience a change in circumstances, or it will work with the Department of Education to get you more federal financial aid. Your financial aid office may recommend that you take out a subsidized or unsubsidized federal Stafford loan if there is no more grant money available.

Filing a FAFSA is still Step One

With regard to the FAFSA, Ms. Stabiner recommends: “Get your finances in order as though the IRS deadline were January 15 instead of April, because you can download the FAFSA forms at 12:01 a.m. on January first — and in this economy, there’s something to be said for the sooner the better.”

If the education program you want to enroll in begins between now and June 30th, 2010 (spring 2010 semester and early summer), you’ll use the 2009-2010 FAFSA, which is available now. If the program you want to enroll in begins AFTER June 30th, 2010, you’ll need to use the 2010-2011 FAFSA, which will not be available until January 1, 2010. Either way, plan to file online, which is much faster.

One thing to look forward to with the 2010-2011 FAFSA: no more filling in all your tax return information yourself. With the click of a button, you’ll be able to transfer it over electronically from the IRS. The 2010-2011 FAFSA, of course, will use your 2009 tax return, which may be a more accurate reflection of your current circumstances.

But for the years when your FAFSA doesn’t tell the whole story, there’s the secret to getting the financial aid you really need: a letter of special circumstance that supplies the latest chapters.

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iStock_000005608156XSM_momgirlEducationGrant often hears from single moms who are looking for ideas about going back to school and the financial aid that can help them accomplish this goal. It’s inspiring to see how many single moms are determined to get the higher education they need to create a better quality of life for their families!

Single moms have many factors to balance when it comes to going back to school: scheduling, child care, transportation, time management, college tuition and fees, money for schoolbooks, and keeping children fed, clean, and rested while mothers work, study, or both. (Not sure how they do it all!) It won’t come as a surprise to any single mother that money, or the lack of it, is the biggest worry that most single moms deal with every day. So going back to school can feel like a Catch-22. To earn more money and make your family financially stable, it helps to have a quality college degree. But to get the college degree, you need money.

Even still, finding financial aid isn’t always the first necessity in ideas for single moms going back to school. Another important goal, especially in this bleak economy, is to NOT end up with a lifelong mountain of student loan debt after you’ve graduated.

Are you determined to get your college degree? Here are some ideas on how to get started:

1) Choose a realistic education goal. Are you going back to school so you can qualify for a particular job or change your career? What’s the average pay for the new career? (How about the pay for an entry-level worker?!) Will this industry still need workers once you’ve graduated?

2) Comparison-shop for the best accredited school and program for your needs. When considering schools, keep these factors in mind:

  • Where is the school? Can you get to its campus easily by public transportation if you don’t have a car? How long is your commute?
  • How much time on campus will the program require? Will you be able to get child care to cover the time you want to devote to your classes and schoolwork? (Besides federal financial aid, look for grants and scholarships that provide funding for child care and other living expenses.)
  • Would an accredited online program work better for you?
  • Is there an admissions representative at the school that can tell you about the program and what it will require from you?
  • How much does the program cost? What fees are there in addition to tuition?
  • Is there a financial aid officer who can walk you through the financial aid process? Does the school have education grants for single moms? (If not, maybe consider a different school.)

3) Fill out the Free Application for Federal Student Aid (FAFSA).

  • This application opens the door to all federal financial aid, such as Pell Grants and low-cost student loans, as well as single mom education grants from individual schools and states.
  • Federal and state financial aid can be used for any accredited higher education program registered with the U.S. Department of Education as a “Title IV” school. These include community colleges, state universities, and online programs in addition to traditional 4-year schools.
  • You don’t need to be accepted or enrolled in a school before you submit your FAFSA. All you have to do is list the school(s) you’ve applied to. You’ll get a report back that tells you how much money you’ll be expected to contribute to your degree costs, and the school(s) will use that number to determine how much financial aid they can offer you. If you qualify for a Pell Grant, you’ll get one automatically.

4) Consider choosing the school that will allow you to graduate with the least amount of debt.

Single mothers do it all, and both the news and personal family histories are filled with countless stories of single moms whose children remember and honor them as role models and heroes. A college degree may be your ticket to the quality of life you want your children to have, but only if it doesn’t leave you worse off financially than you were before.

For more college planning details, see the earlier blog-post, How to Prepare for the FAFSA: 3 Pre-FAFSA Steps. You can also find more information about the FAFSA, scholarships for single moms, scholarships for women, adult learning scholarships, and low-cost student loans in earlier blog posts and the grants, loans, and scholarship pages in this site.

And if you have other tips and ideas for single moms going back to school, please share them here in the comments. The very best advisors for single moms are… other single moms!

Check out Grants for Single Mothers too!

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4 Financial Aid Myths

Here’s an excellent quick overview of financial aid from yesterday’s Tampa Bay Informer (”The Good News Newspaper”). Written by María Corral, “College and Financial Aid: Myths and Facts” distills the longwinded complexity of college funding down to 4 financial aid myths and myth-busters. Once these facts are clear, the details are easier to grasp.

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How to Check Your FAFSA Loan Status

NSLDS2The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s online mega-database of federal financial aid accounts. This database keeps track of all federal student grants and loans (Title IV financial aid) awarded to students through the FAFSA program, including FFELP and Direct Lending student loans.

The information about all these student loans comes from the institutions that loaned or manage the money awarded to borrowers via the FAFSA, including banks, financial institutions, loan guaranty agencies, individual schools, and the U.S. Department of Education (Direct Loans).

The National Student Loan Data System provides you with a convenient way to check on the status of your FAFSA loan yourself, without having to go to a physical location or wait in line or on hold to speak to a bank teller or customer service rep. By logging in to the National Student Loan online database, you can see what your loan status is 24/7 and find information such as:

  • the FAFSA grant and loan amounts you were awarded
  • how much money was paid out to you or your school, and when
  • what your FAFSA loan’s outstanding balance is
  • whether you are up-to-date or falling behind on any required interest payments or loan repayments

You’ll need a FAFSA PIN (Personal Identification Number) to check your FAFSA loan status at the National Student Loan Data System site. If you filed your FAFSA online, you already have a PIN. If you mailed in a paper FAFSA, you’ll need to get a PIN before you can check your account status.

You can find more information about getting a FAFSA PIN and checking your FAFSA loan status on the Frequently Asked Questions (FAQ) page of the federal Student Aid website.

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Sometimes the hard part about embarking on a new goal is knowing where to begin. Going back to school is a worthy goal, but with today’s high college tuition and complicated financial aid system, it can require more planning than it seems. For instance: the FAFSA. Understanding how to prepare for the FAFSA seems like a good place to start your back-to-school plan, but actually, the real beginning is a couple of steps before that.

Here are 3 pre-FAFSA steps to prepare you for financial aid applications.

1) Define your education objective.

  • Are you interested in a career-focused education program that will prepare or certify you for a specific career or job? (Examples of these include a professional diploma in culinary arts or paralegal studies, an associate degree in nursing or medical assistance, and a bachelor’s degree in accounting.)
  • Or are you looking forward to obtaining a 4-year university degree to enhance your life or advance the career you’re settled in? These objectives are equally worthy—it just helps to have an objective clearly defined at the start, even if you revise your plan down the road.

Courseadvisor Articles & Resources2) If your education objective is earning a certificate or degree for a new career, do a little research on the salary and working environment you can expect in that job.

  • Look for the career or job you’re considering on CourseAdvisor.com or the Bureau of Labor Statistics Occupation Handbook website. These sites can give you information on how much you’re likely to earn, the typical work-hours, typical tasks, what kind of education and training is required, and how much demand there will be for that job over the next 10 years.
  • These details are important because they can help you decide how much it makes sense to pay for the education and training the job requires (how much bang you’ll get for your buck).
  • If demand for the job is dropping, you may change your mind about going to school for it unless you live in an area where there is still a need for that occupation.
  • Or, if the career’s average pay is low, you’ll have that in mind when you start considering the price of education programs.

3) Do a little comparison-shopping between education programs.

  • Now that you know what kind of education program you’ll need to achieve your objective and how much you’re likely to earn in the job you’ll qualify for after you graduate for, you can get an idea of a reasonable amount to spend on college tuition.
  • You may get financial aid to cover most of the cost, but if you have to take out loans, most financial aid experts say you should base how much you borrow on how much you’ll earn after graduation, so you don’t drown in debt. (Here’s where the research on average salary is helpful.)
  • Liz Pulliam Weston at MSNBC Money recommends that you limit your student loan(s) to an amount that will cost you no more than 10% of your expected monthly gross income after you graduate.

The goal of these 3 pre-FAFSA steps is to define what you want to accomplish in school and get an idea of what your chosen program is likely to cost. Having this information will help you prepare for how much financial aid you’ll need after your FAFSA is processed.

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