Pell Grant Eligibility | Part 5: Answers On The Fafsa, The Free Application For Federal Student Aid
In this fifth round of responses to reader questions about financial aid, Mark Kantrowitz, founder of the Web sites finaid.org and fastweb.com , addresses privacy issues, when to file and the rules concerning tuition assistance from grandparents and other relatives.
Mr. Kantrowitz is no longer accepting questions. His answers will conclude Saturday. (Questions may have been edited).
– Jacques Steinberg
If a student is applying to multiple colleges, will listing all of the colleges on the Fafsa and submitting it once allow the admissions or financial offices of those colleges to “see” where else a student has applied? – mary r
If an applicant lists a college on his or her Fafsa, the financial aid administrators at that college can see the other colleges listed on the Fafsa. Colleges often use this information to identify the colleges with which they compete for students. It sometimes leads to sophisticated leveraging policies, where a college might offer more grants than loans to a desirable student based on the colleges listed on the Fafsa.
Financial aid administrators generally do not share the list of competing colleges for a specific student with college admissions staff. Nothing, however, would preclude them from doing this. But college admissions staff generally base admissions decisions on the student’s application, test scores, transcripts, recommendations and interviews, and not on the colleges the student is considering. College admissions staff would be more likely to use such data for estimating the college’s yield – the percentage of accepted students, who in turn, agree to matriculate – than to tweak individual admissions decisions. But such statistics are unlikely to be reliable, since the colleges to which a student applies are not necessarily the same as the colleges that have accepted the student.
I am filing financial aid for the first time – does everyone file the Fafsa and the CSS/Profile and then correct in mid to late February when taxes are completed? How does this affect the tax verification with the I.R.S.? Does the college deadline mean filing with estimates? – Kate
I am a first time filer and am not sure if we should file now with good estimates or wait two weeks and file after we file our income taxes. – Lee
Because of early college and state deadlines some families file their federal income tax returns early to satisfy the Fafsa and others file the Fafsa with early estimates and then correct the figures after filing their federal income tax returns. deadlines. If you are not able to file your federal income tax returns early enough to satisfy all the Fafsa deadlines, you should file the Fafsa first based on estimated income and tax information.
This may preclude using the I.R.S. data retrieval process to simplify completion of the Fafsa. Fafsa verification occurs after the April 15 federal income tax deadline. (Special rules apply to people who obtain a six-month extension from the I.R.S.).
As a parent we applied for financial aid and received about $1,000 subsidized and $5,000 unsubsidized. With the 6.8 percent interest rate it doesn’t seem worth it for now to apply. Is there a problem if we do not apply for aid in 2012-13 but need to do it again the following year? – Sarah Lincoln
Failing to apply for financial aid one year won’t prejudice the family’s eligibility for financial aid in a subsequent year. (The main exception is when a student is admitted off the waiting list after stating that the student will not apply for financial aid. Some colleges will refuse to award those student grants from the college’s own funds in a subsequent year unless the family demonstrates that there has been a significant change in the family’s financial circumstances.)
However, it is best to apply for financial aid every year, even if the family thinks it will not qualify for need-based financial aid. The financial aid formulas are complicated enough that it is difficult to predict whether or not the family will qualify for need-based aid. The family can always turn down the loans and other forms of financial aid.
The 6.8 percent interest rate on the Stafford loan is a fixed interest rate. It will not change. Variable rates on private student loans might be lower for a family with excellent credit, but these interest rates are likely to increase over the life of the loan, ultimately costing more than the federal student loans.
Also, the government pays the interest on the subsidized Stafford loan while the student is in school, and nothing prevents the family from paying off the loan after the student graduates.
My son lives with me. I have saved for his education. His father has saved nothing. He wants to get loans and insists I have to fill out the Fafsa with my financial information (not his) so he can get Parent loans . Is this correct? I am very concerned about privacy of the data. Will my ex-husband learn what my income and assets are if I fill out the Fafsa and he uses it to get loans? – Maureen M
When the student’s parents are divorced, only one parent is responsible for completing the Fafsa. This is usually the parent with whom the student lived the most during the 12 months ending on the Fafsa application date.
The Fafsa is also a prerequisite for Stafford and Parent PLUS loans.
Both parents are eligible to borrow through the Parent PLUS loan program to pay for the child’s college costs.
So a noncustodial parent can borrow through the Parent PLUS loan program only if the custodial parent cooperates by filing the Fafsa.
The Family Education Rights and Privacy Act protects the privacy of educational records, which include the information on financial aid application forms. Colleges are sensitive to the concerns of divorced parents and will only release financial information to the parent that provided the information. Also, the parent’s financial information may not be released to the student.
My son’s schools require both Fafsa and CSS/Profile to be filed by Feb. 1. Some of our 1099s from investments are not required to be sent out until Feb. 15. What are we supposed to do?
If you do not yet have your W-2 and 1099 statements, use the last pay stub of the year and a copy of the most recent brokerage and bank account statements to estimate the figures for the Fafsa and C.S.S. Profile. Compare the information with the previous year’s federal income tax returns to make sure you don’t accidentally omit a source of income or an exclusion from income. Try to estimate the income as closely as possible. You will have an opportunity to correct any errors after you file your federal income tax returns.
Please explain C.S.S. Profile and N.C.P. Profile and why they’re needed in addition to Fafsa and how the College Board gets away charging for each one for every college that requires them for admission.
After seeing all the fees the College Board received just from our
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