General Question

lilikoi's avatar

FAFSA questions?

Asked by lilikoi (10028 points ) January 15th, 2010

1. My former employer has not sent me a W-2 yet. They are postmarking it by Jan 31. I want to maximize my chances of getting aid. Is it better to wait for the W-2 or submit now using the calculations I have done myself and revise later, if necessary, once I receive my W-2? Or will a couple of weeks not make much of a difference?

2. I have some money in a savings account. I am planning on moving some of it into the stock market. Is it more beneficial to report the money as liquid assets (cash in a savings acct) or as a mix of cash and investments?

3. I have a much higher income from 2009 due to working full-time than I will have in 2010–2011 when I will be a full-time student and probably not working at all. Does the FAFSA take this into account at all? (I don’t think it does)

4. Does anyone know exactly how they calculate your “expected family contribution”?

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11 Answers

Haleth's avatar

I don’t know the answers to all of your questions. In general, when the government calculates your aid, your own assets can make more of a difference than your parents’ assets. Their line of reasoning is that as the student, more of your income will be available to spend on school, but most of your parents’ money will be spoken for by their other expenses. If you want to get more money, you could put your savings in your parents’ names. Once you’re in grad school, 24, in the military, or married, you don’t need to include your parents’ information any more.

casheroo's avatar

1— You can enter whatever numbers you want, but you need to enter the accurate numbers for income once you find it out. I thought FAFSA had until May?? A couple weeks really won’t make a huge difference. I haven’t received any tax return info at all, neither has my husband…we’re just waiting.

2-I have never had to report my assets. Is this common?

3-No. It goes for the prior year.

4— I have no clue how they get the EFC. They just take your income, how many dependents there are (if you are married, and have children…it helps you have a lower EFC) I think they just go by income and people.

lilikoi's avatar

@Haleth – Thanks for the reply. I am 24 and will not be reporting my parent’s finances on this FAFSA… I suppose “hiding” assets may still be beneficial although I don’t know if I trust anyone else w/ my cash.

@casheroo – I think you may even have beyond May to file, but it is first come first serve. I am thinking of doing a 2nd bachelor’s degree so that probably disqualifies me from the really good deals so I want to file ASAP. I haven’t filed a FAFSA in years so I’m not sure if it has changed but they ask for “cash, savings, and checking” and “net worth of investments” and “net worth of businesses / investment farms”.

casheroo's avatar

@lilikoi Ohh, yeah. I’m exempt from filling out that part (about my cash and savings) because we’re low income. I forgot about that.

PandoraBoxx's avatar

You might find this FAFSA helpful.

There are three filing deadlines, and you need to file for the earliest: school aid deadline, state aid deadline and federal aid deadline. Schools use the FAFSA to allocate work-study opportunities as well as loan information, and work-study is counted as part of your aid. State deadlines vary by state, but the earliest is March 1st.

You will need to complete your 2009 tax return in order to fill out the FAFSA. You don’t have to show poverty level in order to get aid.

In order to be an independent student (parent contribution not expected), you must meet one of the following:
* You were born before January 1, 1986.
* You will be enrolled in a master’s or doctorate program (beyond a bachelor’s degree) at the beginning of the 2010–2011 school year.
* You’re married as of the day you apply (or you’re separated but not divorced).
* You have children who receive more than half their support from you.
* You have dependents (other than your children or spouse) who live with you and who receive more than half their support from you at the time you apply and through June 30, 2009.
* Both your parents are deceased, or you are (or were until age 18) a ward or dependent of the court.
* You’re currently serving on active duty in the U.S. Armed Forces for purposes other than training OR you’re a veteran of the U.S. Armed Forces

lilikoi's avatar

@casheroo – How do they define low income? Is there a website where they talk about this (and maybe other) exemptions? My income has been zero since October…. but for the year it is not.

casheroo's avatar

Here’s a link: http://www.ed.gov/finaid/info/apply/simplification.html

More Improvements in January: A series of additional improvements will be implemented in January. Students with low incomes will no longer be asked for asset information, which is not used to determine their aid eligibility. Only returning students will be asked about prior drug convictions because the question does not affect first-year students. And the Education Department will work with state agencies to make it easier to answer questions that the states need but the federal government does not.

I’m not sure how they determine low income. They do ask if you ever receive any aid from the state, and my son is on state funded medical insurance..so that automatically makes us “low income”, thus I don’t have to enter any of my asset information. Or any information about my parents, even though I’m younger than 24, because I’m married.

lilikoi's avatar

I found the FAFSA4caster, govt software program that estimates your EFC and loan amounts. From this, I think being eligible to file a 1040A or 1040EZ is also a trigger for not having to provide asset information.

Charliegiffin's avatar

My son and I have both applied for FASFA, but my son’s EFC is about double of mine. How can that be, and what does that mean??? Mine is 2575, and his is 5864. He is still a minor, and my dependent.

Thanks in advance!!!!!!!

moon_under_water's avatar

@Charliegiffin: That’s because as a minor and a dependent, his family is expected to help him out – hence he has a larger estimated family contribution than you, who are applying as an adult. The form takes into account your age and doesn’t expect your parents/guardians to help you pay for school, maybe just your spouse if you have one.

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