I don’t think I qualify for aid. Should I apply anyway?
Yes. Many families mistakenly think they do not qualify for aid and they are prevented from receiving financial aid by failing to apply for it. In addition, there are a few sources of aid such as unsubsidized Stafford and PLUS loans that are available regardless of need. The FAFSA form is free.
Do I need to be admitted before I can apply for financial aid at a particular college or university?
No. You can apply for financial aid any time after January 1. To actually receive funds, however, you must be admitted and enrolled at the college.
Why can I not submit my financial aid application before January 1?
The need analysis process for financial aid uses the family’s income and tax information from the most recent tax year (the base year) to judge your eligibility for need-based financial aid during the upcoming academic year (the award year). Since the base year ends December 31, you cannot submit a financial aid application until January 1. If you submit the financial aid application before January 1, it will be rejected.
Do I have to reapply for financial aid every year?
Yes. Most financial aid offices require that you apply for financial aid every year. If your financial circumstances change, you may get more or less aid. After your first year you will receive a “Renewal Application” which contains preprinted information from the previous year’s FAFSA. Note that your eligibility for financial aid may change significantly, especially if you have a different number of family members in college. Renewal of your financial aid package also depends on your satisfactory academic progress toward a degree, such as earning a minimum number of credits and achieving a minimum GPA.
How do I apply for a Pell Grant and other types of need-based aid?
Submit a FAFSA. To indicate interest in student employment, student loans and parent loans, you should check the appropriate boxes. Checking these boxes does not commit you to accepting these types of aid. You will have the opportunity to accept or decline each part of your aid package later. Leaving these boxes unchecked will not increase the amount of grants you receive.
Are my parents responsible for my educational loans?
No. Parents are, however, responsible for the Federal PLUS loans. Parents will only be responsible for your educational loans if they co-sign your loan. In general you and you alone are responsible for repaying your educational loans.
You do not need to get your parents to cosign your federal student loans, even if you are under age 18, as the ‘defense of infancy’ does not apply to federal student loans.
(The defense of infancy presumes that a minor is not able to enter into contracts, and considers any such contract to be void. There is an explicit exemption to this principle in the Higher Education Act with regard to federal student loans.) However, lenders may require a cosigner on private student loans if your credit history is insufficient or if you are underage. In fact, many private student loan programs are not available to students under age 18 because of the defense of infancy.
If your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments.
Why is the family contribution listed on the SAR different from the family contribution expected by the college or university?
The federal formula for computing the expected family contribution is different from those used by many college or universities. In particular, the federal formula does not consider home equity as part of the assets.
If I take a leave of absence, do I have to start repaying my loans?
Not immediately. The subsidized Stafford loan has a grace period of 6 months and the Perkins loan a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period expires. If your grace period expires in the middle of your leave of absence, you will have to start making payments on your student loans.
Where can I get information about Federal Student Financial Aid?
Call the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243) or 1-800-730-8913 (if hearing impaired) and ask for a free copy of The Student Guide: Financial Aid from the US Department of Education. This toll free hotline is run by the US Department of Education and can answer questions about federal and state student aid programs and applications. You can also write to:
Federal Student Aid Information Center
PO Box 84
Washington, DC 20044
Are work-study earnings taxable?
The money you earn from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full time and work less than half-time).
Federal Work-Study earnings during the calendar year should be included in the totals for AGI and Worksheet C on the FAFSA. Work-study earnings should only be included in Worksheet C when they represent financial aid to the student, since the answer to this question is used as an exclusion from taxed income. The student should also be careful to report amounts based on the calendar year, not the school year.
Is it legal for a 17-year-old student to sign a promissory note for a student loan, even though the student has not yet reached the age of majority?
Normally, a minor cannot be held liable for a contract that they sign. However, in 1992 the Higher Education Act was amended to permit eligible students, defined as per Title IV regulations, to sign promissory notes for their own Federal student loans. As such, student loans represent one of the few exceptions to the so-called “defense of infancy”. The specific citation is section 484A(b)(2) of the Higher Education Act of 1965 (20 USC 1091a(b)(2)), and applies to Stafford, PLUS and Consolidation Loans. It does not appear to apply to Perkins and Direct Loans, although it was clearly the intent of Congress that it should.
Several states have also passed similar laws that consider minors to be competent to enter into a contract for an education loan. This extends similar protection to private and non-federal loans. All private education loans require a cosigner when the student is under the age of majority, just to be safe.
Where can I get a copy of the FAFSA?
You can ask your guidance counselor for a copy. You can also get the FAFSA from the financial aid office at a local college, your local public library, or by calling 1-800-4-FED-AID. The online version of the form is available at http://www.fafsa.ed.gov.
Are photocopies of the FAFSA acceptable?
No. Only the original FAFSA form produced by the US Department of Education is acceptable. Photocopies, reproductions, facsimiles and electronic versions are all not acceptable. (See DCL GEN-95-21.)
How soon after January 1 should the FAFSA form be sent in? Is it better to wait until the income tax forms have been completed?
Send in the form as soon as possible after January 1. Do not wait until your taxes are done. Although it is better to do your taxes early, it is acceptable to use estimates of your income, so long as they are not very far off from the actual values. You will have an opportunity to correct any errors later. If you wait too long, you might miss the deadline for state aid. Most states require the FAFSA to be submitted by March 1, and some even as early as early or mid-February. Criswell college requires a student to submit the FAFSA and application for institutional aid by April 15.
I sent in my FAFSA over four weeks ago but I have not heard anything. What should I do?
If you have not received a Student Aid Report (SAR), call the Federal Student Aid Information Center at 1-800-4-FED-AID (toll free) or 1-319-337-5665. You must provide them with your Social Security number and date of birth as verification.
You can also write to:
Federal Student Aid Programs
PO Box 4038
Washington, DC 52243-4038
What do those acronyms on the Student Aid Report (SAR) mean?
The acronyms on the bottom of the SAR represent intermediate results in the need analysis. To fully understand their meaning, you will need to be familiar with the federal need analysis methodology, such as is used by the EFC Estimator. The meanings of the acronyms are as follows:
- EFC – Expected Family Contribution
- TI – Total Income
- ATI – Allowances Against Total Income
- STX – State and Other Tax Allowance
- EA – Employment Allowance
- IPA – Income Protection Allowance
- AICAI – Contribution from Available Income (Independent Student)
- DNW – Discretionary Net Worth
- APA – Education Savings and Asset Protection Allowance
- PCA – Parents’ Contribution from Assets
- AAI – Adjusted Available Income
- TPC – Total Parents’ Contribution
- TSC – Total Student’s Contribution
- PC – Parents’ Contribution
- SIC – Dependent Student’s Income Contribution
- SCA – Dependent Student’s Contribution from Assets
If an asterisk appears next to the EFC figure, the student has been selected for verification. The asterisk is followed by a code that explains the reason why the student was selected for verification. The letter explains the reason for selection, and the number indicates the priority, with code 1 the highest priority and code 25 the lowest priority (although there are higher codes).
For additional details about SARs and ISIRs, please see the Guide to 2014-2015 SARs and ISIRs.
I qualify for the simplified needs test. Should I fill out Section G anyway?
Yes. Some states and most private colleges require the asset information in Section G to compute their own financial aid awards. Including this information will not affect your eligibility for federal financial aid (it is disregarded by the Federal Need Analysis Methodology if you qualify for the Simplified Needs Test). Even if none of the schools require the information, you should include it anyway, just in case.
What about Divorce and Financial Aid?
An entire section of FinAid is devoted to the topic of Divorce and Financial Aid. It discusses which parent is responsible for completing the FAFSA, the obligations of non-custodial parents to pay for college, college support agreements, the obligations of step-parents, and the ability of non-custodial parents to take advantage of the various tax benefits for education.
What about Bankruptcy and Financial Aid?
An entire section of FinAid is devoted to the topic of Bankruptcy and Financial Aid. It discusses both whether student loans can be discharged by bankruptcy, as well as the impact of a bankruptcy on eligibility for student aid.
Where can the student find financial aid for college?
Students searching for financial aid should begin by filling out a FAFSA and by applying for scholarships. FAFSA submissions can help needy students find thousands in aid. Even if students are ineligible for free grants, they may receive aid in the form of federal student loans—these usually offer lower interest rates. Scholarships are another great funding option. There are countless scholarships out there, and many are not merit based. Conducting a free scholarship search at Scholarships.com will help students find scholarships for the average, the exceptional, and the kooky. With over 2.7 million scholarships and grants, students are bound to find something.
I got an outside scholarship. Should I report it to the Financial Aid Office?
Yes. If you are receiving any kind of financial aid from university or government sources, you must report the scholarship to the financial aid office. Unfortunately, the university will adjust your financial aid package to compensate. Nevertheless, the outside scholarship will have some beneficial effects. At some universities outside scholarships are used to reduce the self-help level. For example, at other colleges and universities the outside scholarship is first applied to reducing the self-help level, and only when the scholarship exceeds self-help does it replace institutional grants. At Criswell College outside scholarships are used to replace loans instead of grants.
Are scholarship searches reliable?
Some of them are. Scholarships.com, for example is a member of the BBB, TrustE, NACAC, NSPA, etc., and is a proven, legitimate scholarship search website with dozens of success stories available for you to check out and millions of students assisted over more than a decade of service. However, students should be wary of services that ask for money. They should also stay away from those that claim to do all the work. Most scholarships require students to submit personal information, information that only students will know. Any site that suggests otherwise may be attempting to scam you.
Will scholarships affect my eligibility for financial aid?
They may. The government takes student awards into consideration when offering aid. However, students should not be deterred by this. The effects are not likely to be great. Many schools use student money to offset loan eligibility, not grant awards. Students who receive little aid can benefit greatly from scholarships.
Are graduate students eligible for government financial aid?
Yes, but not all of it. Graduate students may be eligible to receive money in the form of loans and Federal Work Study (FWS), but they are not eligible for free government Pell Grants. However, plenty of non-government aid is available for graduates. Myriad scholarship, grant, and fellowship opportunities may be found at Scholarships.com. Searching college financial aid sites should also produce some results.
My parents have saved for my education. Will this affect my eligibility for aid?
Yes. However, this should not discourage parents and students from saving. Assuming that students will receive the full amount — many do not — they may still be lacking. It is best to set up an account in a guardian’s name. Less than 6 percent of parent assets are taken into account when determining need. Student assets are weighed more heavily. Parents might want to consider using student money to buy college necessities before submitting their FAFSA.
I did not receive enough government aid. What can I do?
You have options. Students who did not receive sufficient aid can speak with the financial aid administrators. The financial aid administrator may be willing to help if a students’ financial situation has recently changed (e.g. job loss or new medical bills). Students may also apply for scholarships and grants, year round. As a last resort, students may apply for loans.
What is the difference between loans, grants, and scholarships?
Grants and scholarships are free monetary awards: they do not need to be repaid. Grants may be offered without service requirements (e.g., Pell Grants) or with research requirements (this is typically the case with graduate students.) Scholarships are awards that may be awarded based on merit, talent, major, ethnicity etc. They are not restricted to top students. Loans need to be repaid, with interest.
How can I increase my chance of landing scholarships?
Students can increase their chances of winning by decreasing their competition. Applying for awards restricted to those within a city or major, for example, should help. Scholarships.com will help students find specific scholarships by showing you awards available to you based on your personal profile, a good many of which. It is also important to pay attention to all regulations. Students should only apply for scholarships they are eligible to win and should always remember to proofread their work. Have a question not addressed here? Email the Financial Aid Office.