Frequently Asked Questions

An alternate method of calculating the Expected Family Contribution for families with adjusted gross incomes of less than $50,000, who have filed, or are eligible to file, an IRS Form 1040A or 1040EZ or are not required to file an income tax return. All assets are excluded from consideration.

A student may qualify for either an auto-zero EFC or Simplified Needs Test (SNT) EFC if, in addition to meeting the relevant income criteria, the student or the dependent student's parent(s) received benefits from a means-tested Federal benefit program (e.g. SSI, food-stamp program, or free & reduced price school-lunch program).

Only the parent's tax return is considered for auto-zero EFC and Simplified Needs Test EFC determinations. Please note that the maximum Adjusted Gross Income (AGI) of the parents was raised to $20,000 (from $16,000) for an applicant to be eligible for auto-zero EFC.

If you have shifted significant resources into your children's names to lessen your federal income tax burden, this could reduce your children's financial aid eligibility. As of July 1, 2006 this includes prepaid tuition and the proceeds of 529 tuition savings plans.

In the calculations for financial aid eligibility, the student's savings are taxed at a much higher rate than those savings reports for parents. If you or your child has set aside funds for college expenses, consider using those savings to pay for necessary college expenses — perhaps a new vehicle or prepayment of tuition and fees — prior to filling out the needs analysis form. It might make a significant difference, particularly if those expenditures reduce the student's savings.

TIP: Under a little-noticed loophole in a new federal law, money set aside in college-savings plans will not be counted in determining a dependent student's eligibility for need-based financial aid if the account is in the student's name, according to guidance released in early June 2006 by the U.S. Department of Education. Please be advised that this could be rescinded at any time.

No. As a matter of fact, families that have made a concerted effort to save money for college are in a much better position than those that have not. For example, a student from a family that has saved money may not have to borrow as much. Furthermore, the "taxing rate" on savings is quite low — only about 5 percent of the parents' assets are assessed and neither the home equity nor retirement savings are included. For example, a single 40-year-old parent who saved $40,000 for college expenses will have about $1,900 counted as a part of the parental contribution. In a two-parent family, if the older parent is 40 years old (a parent's age factors into the formulation), about $300 would be counted. (Note: The "taxing rate" for student assets is much higher - 35 percent - compared to 5 percent for parents.)

Parents should consider completing a FAFSA on the Web practice worksheet when the student becomes a junior in high school. This will give you an idea of what your Expected Family Contribution (EFC) will be. The results can assist you in selecting affordable colleges.

Send in the forms as soon as possible after January 1. Even if you haven't nailed down your taxes, you can use estimates of your income - as long as they aren't far from the actual numbers. You will have opportunities to provide the corrected numbers later. To fill out the financial aid forms, you will need a copy of your latest federal income tax return plus all pertinent related documents, such as W-2s, 1099s and bank, brokerage, and mortgage statements. You'll also need the student's Social Security and driver's license numbers, among other things.

Yes, it's a mistake to self-determine. Let the financial aid officer analyze your aid application. There are a few sources of aid, such as Unsubsidized Stafford and PLUS loans, that are available regardless of need but still require the FAFSA.

Pay attention to deadlines. All schools have grant aid available to those students who qualify, but many have limited funds. Students who pay attention to deadlines have an advantage over those who don't. Even if you have to estimate figures on your FAFSA or institutional applications, you should get them in on time. The sooner you file your application, the better your chances of receiving aid. Also, you should file your income tax return as early in the year as possible.

Some institutions have scholarship dates that are earlier than the FAFSA deadline. Many students think that they should apply for scholarships at the same time they are completing the FAFSA, but that is incorrect. Students can lose out on these lucrative awards if they don't realize that there may be separate scholarship and FAFSA filing dates.

The majority of students file the FAFSA online. We strongly recommend electronic filing over the paper application to save time and prevent errors.

When filling out the FAFSA, make sure you check off the correct academic year, which would be 2007-08 for those receiving aid for a school term after July 1, 2007. Legal names, not nicknames, should always be used, and if you are not filing online, legibility is important. A financial aid officer at just about any school can answer any questions you have about the FAFSA. And remember to make a copy of your completed forms before sending them in.

In their rush to complete the FAFSA, families often make costly errors. Here are three of the biggest errors and ways to prevent them:

• Filling out the FAFSA incompletely or inaccurately. Incomplete or inaccurate information can cause delays in processing. Errors can also result in a reduction of the total aid offered to your child.
• Not submitting all of the required applications for all possible sources of aid. For example, many schools require a supplemental application for institutional aid. Confirm, and reconfirm if necessary, that you have submitted all required forms and that the appropriate individual or organization has received them.
• Not submitting application forms by the published priority filing dates. Most schools require you to submit the FAFSA and other financial aid application documents by a priority filing date. Families that miss this date are frequently offered less financial aid or less desirable financial aid than they would have been offered otherwise

TIP: Never leave a question with a dollar sign blank. If it does not apply, enter a zero.

A school that generally does not offer aid until a certain date or until you have completed your financial aid file may still be willing to give a preliminary estimate of the aid you are likely to receive. If you have not yet received an offer of aid from a school in which your child is seriously interested, do not be afraid to contact the school for information. Ask for an early estimate.

Check on your schools' Web sites to see if they have their own calculator. Some institutions, e.g. John Hopkins and Princeton University, have their own financial aid calculators on their site to assist students with early estimates.

This report is sent to you after you have filed your FAFSA (Free Application for Federal Student Aid) for verification of information. If corrections are necessary or additional information is required, please update and return the form. If there are no corrections that need to be made, please keep this form for your records.

Should a family determine that the offered financial aid package is inadequate - especially in the case of a parent's or spouse's death or unemployment or other factors that seriously alter a family's financial status - the family can appeal the circumstances that contributed to the EFC. The appeal should be submitted as soon as possible, preferably in-person. A financial aid officer will review the components of the EFC and determine whether or not the family's special circumstances warrant a revision of one or more of the EFC components.

Should the financial aid officer decide that the original EFC is not realistic due to the special circumstances, he or she may make adjustments that result in a lower EFC and then revise the offered financial aid package accordingly. Another reason for filing an appeal is that some private colleges have an appeal policy that states that they will meet or match any award offer from a similar college. Have copies of all your documents on hand when you do talk with the financial aid officer. If you have updated information, such as a more recent tax return, have that available as well.

The renewal FAFSA is a tremendous timesaver because responses from the prior FAFSA are displayed and you must only answer questions that are likely to have changed from the previous year. All renewal-eligible applicants will now use the Web to reapply for aid because paper renewal FAFSAs will no longer be printed and mailed. Each aid applicant who meets the eligibility requirements for a renewal FAFSA will receive a Renewal Reminder e-mail from the Department of Education. If the renewal-eligible student has not applied for aid by the end of the first week in February, a second reminder e-mail will be sent.