College Goal Sunday

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Updated: Sunday, 12 Feb 2012, 10:13 PM EST
Published : Sunday, 12 Feb 2012, 10:13 PM EST

Fort Wayne, Ind. (WANE) – The government gives out billions of dollars for students to go to college. That even includes student loans.
Dian Suarez and his mother came to College Goal Sunday. This program is to help families fill out their Free Application for Federal Student Aid form, or FAFSA form online. Suarez is a freshman at I.P.F.W. He found out he didn’t have to take out any loans.
“I got lucky and I was able to get enough to pay for what I needed,” he said.
Many students need and rely on student loans to pay for their education. Suarez said if he’s faced with taking out a loan, he hopes to have a job waiting on him before he graduates.
“I’ll have to make sure I have a job and be able to pay it back eventually,” Suarez said.
Martin Murphy with I.P.F.W. said in this economy, finding a job isn’t so easy, which makes it harder on graduates to pay back loans.
“They’re graduating here out of college and they’re looking six to 12 months looking for a job and see, those students loans start kicking in,” Murphy said.
That’s why he stresses students should use their loans responsibly, such as on tuition and room and board, instead on a new car or new furniture for an apartment.
Murphy said it usually takes graduates between 10 to 15 years to completely pay back their loans, that’s if there’s no stop in payment. Usually, if you can’t find a job within the six month grace period or don’t make enough money to pay back your student loans, for federal loans, you can postpone payment. Sometimes, without penalty.
The deadline for completing the FAFSA form is March 10th. The deadline to make any changes to your FAFSA is May 15th.

Maximize financial aid by filling out FAFSA

As of Jan. 1, the Free Application for Federal Student Aid, or FAFSA, became available for the 2012-13 school year. The FAFSA qualifies students for federal grants, loans and work-study jobs, and serves as the basis for determining aid eligibility for many private awards. In light of other 2012 financial aid changes that will make it tougher for some students to pay for college, maximizing your federal aid eligibility is more crucial than ever. Here’s how to get an A in FAFSA 101.

Understand the basics

The sole purpose of the FAFSA is to determine your expected family contribution, or EFC — the amount the government believes your family can chip in for college that year. Based primarily on your family’s income and assets, the EFC qualifies students for federal grants, loans and work-study programs. It’s also one of the main factors used by colleges to determine how much your family can pay relative to the cost of that school and how much the college will contribute to your total aid package.
“Everyone should fill out the FAFSA,” says Beth V. Walker, founder of College Funding Coaches, a college finance planning firm headquartered in Las Vegas. “There are a lot of parents who think they make too much money and that they’re not going to qualify for anything, but I think it’s a surprise to many people to know that the merit-based aid is handed out many times through the need-based door.”
All undergrads, regardless of their family’s income, can qualify for a total of $27,000 in unsubsidized Stafford loans over four years, reports the Department of Education, while families with adjusted gross incomes of $60,000 or less can also usually expect some federal grant aid, says Walker. Unlike student loans, grants need not be repaid, though certain conditions may apply. Before filing, families can get an estimate of their EFC by using the FAFSA4Caster tool at Fafsa.ed.gov.

The loopholes

Understanding the federal aid methodology is especially important in light of 2012 financial aid changes. This year, the interest rate on subsidized Stafford loans for undergrads will increase, subsidized Stafford loans for grad students will be eliminated and students will have fewer semesters to qualify for a Pell Grant. It will also become harder to qualify for the full Pell Grant award. As of last year, families with adjusted gross incomes of $30,000 or less automatically qualified for a full Pell. This year, that threshold will decrease to $23,000, reports the Department of Education.
“Generally, need-based financial aid is going to be harder to get next year than it was last year,” says Jay Murray, president of Solutions for Tuition, a college planning firm in Lone Tree, Colo.
Families can take action. While most families can’t change their income, they can maximize their federal aid eligibility by filing the FAFSA as close to Jan. 1 as possible and by shifting or spending assets held in the student’s name.
“Student assets are assessed at 20 percent,” says Murray, meaning for every dollar in an account in a student’s name, the government will subtract 20 cents from the student’s aid package. This starts with need-based grants. “Parental assets are assessed at (up to) 5.6 percent.” The exception, Murray says, is 529 plans. These are assessed at the parental rate regardless of whether they’re held in a parent’s or student’s name.
Gary Carpenter, executive director of the National College Advocacy Group, a nonprofit organization in Syracuse, N.Y., says families can also increase their aid eligibility by knowing which investment vehicles the government doesn’t take into consideration.
“The FAFSA form does not assess the family home. It does not assess retirement accounts. It does not assess life insurance policies or annuities,” says Carpenter. “Also, they do not assess personal assets like automobiles, clothing, furniture — none of that is assessed.”
Families looking to shift assets from assessable accounts to sheltered ones can do so by maxing out their retirement accounts, paying down the mortgage on their primary home and purchasing personal items the student will need before filing the FAFSA. These personal items can include a computer or dorm supplies. Families who need those assets to be available for college costs can simply move funds from an account in the student’s name to a 529 plan or one held in the parent’s name.
Sandy Baum, a senior fellow at the George Washington University Graduate School of Education, adds that students should also alert their school’s financial aid office about expenses that aren’t considered on the FAFSA.
“For example, if you fill out (the FAFSA) and your parents made a reasonable income last year and then they lose their jobs, you want to be sure you go to the financial aid office,” she says. “Tell them this because they can adjust your aid award to account for those unfortunate new circumstances. That’s terrifically important.”
By letting your aid office know about factors that aren’t included on the FAFSA, such as medical expenses, death in the family, divorce or parental job loss, and by providing documentation, families can keep aid officers abreast of their current financial situation and increase their chances of landing college aid.
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Volunteers will help college bound students with financial aid applications on College Goal Sunday

GRAND RAPIDS – College bound students seeking free assistance with filling out the federal financial aid application, known as the FAFSA, should plan on attending the College Goal Sunday event in their area on Feb. 12.
“For many students and their families, college seems like an unachievable and unaffordable dream,” said state Superintendent of Public Instruction Mike Flanagan, about the statewide event. “College Goal Sunday locations have financial aid experts who can help families complete these complex applications and maximize financial assistance for students wanting to go to college.”
Last year, more than 1,600 students received assistance at College Goal Sunday events from volunteers. According to the state, statistics show that students who complete and submit FAFSA forms are more likely to go on to college.
The annual event is a collaborative effort of the state Department of Education, the Michigan Student Financial Aid Association, and EduGuide. The program was created to increase the number of students who continue education beyond high school and earn post-secondary degrees. The FAFSA is required of any student seeking financial aid including grants, loans, and many scholarships.
“It is critical that high school seniors and their parents are aware of these College Goal Sunday events,” said Bryan Taylor, president of EduGuide. “Students must complete and file a FAFSA in order to secure financial aid and should file by the March 1st priority date to ensure eligibility for federal and state programs.”
On Sunday, Feb. 12, student financial aid experts will be available to guide students and their parents through each step of completing and filing the free FAFSA. Students under age 23 are encouraged to attend with a parent or guardian. Parents and students should bring their completed 2011 Federal tax return (1040) if possible, or their W-2 and 1099 forms.
Dozens of sites across Michigan will be hosting College Goal Sunday from 2 to 4 p.m.including: Grand Valley State University Pew Campus Building A, located at 401 Fulton St.; Davenport University-Holland campus, 643 South Waverly Rd. and Newaygo County Regional Educational Service Agency, 4747 West 48th St. in Fremont; Loutit District Library, 407 Columbus Drive in Grand Haven and Western Michigan University
Schneider Hall – Business Court, 1903 W Michigan Ave. in Kalamazoo.
For a complete list of locations and additional information visit the website.
Prizes will be awarded during events, including a $1,000 scholarship, two $500 scholarships, and three $250 scholarships. Additional support for College Goal Sunday was provided by the C.S. Mott Foundation, the Lumina Foundation for Education, and the DTE Energy Foundation.
Email: mscott@grpress.com and follow her on Twitter at Twitter.com/GRPScotty.
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Families of College Bound Students: Tips on Financial Aid Forms

For parents of college students and prospective college students (Fall of 2012), financial aid forms need to be submitted soon. Typically financial aid forms for prospective students are due in January or February, while forms for returning students are due in March or April. Be sure to check the deadlines for each school where the student is applying and/or attending. Depending on the school there may be multiple forms to fill out. The first step is to determine which forms are needed:

• Free Application for Federal Student Aid (FAFSA) Form: This is the basic form required for financial aid at all colleges including all federal student loans, such as Stafford Loans and PLUS loans. The FAFSA form asks for information such as student and parent income and assets, but does not take into consideration retirement assets or the equity in the primary residence. The FAFSA will determine the family’s “Expected Family Contribution”, which is the amount that the family is thought to be able to pay – often a higher number than the parent thinks they can afford! Information and forms can be found at www.fafsa.ed.gov . Even if the family does not think they are eligible for need-based aid, but wants to access Stafford loans and PLUS loans, the FAFSA must be filled out. Certain merit scholarships may also require completion of the FAFSA forms.
  
  • Stafford Loans: Most students who fill out a FAFSA form are eligible for unsubsidized Stafford loans. First year students can borrow up to $5,500. The interest rate on unsubsidized loans is currently 6.8 percent and is not based on the applicant’s credit score. Need-based subsidized Stafford loans now have an interest rate of 3.4 percent in 2011-12 and the interest does not accrue while the student is in school.
  • Federal Direct PLUS Loan: Parents can also borrow through the Direct PLUS program. Parents can borrow up to the cost of attendance less any other financial aid received. The interest rate is presently 7.9 percent and is charged beginning with the disbursement of the loan. Please note that certain fees apply to these lending programs, so read the details carefully.
• CSS PROFILE Form: Some private colleges use a different methodology for calculating financial aid and require the College Board’s CSS PROFILE form. A list of schools requiring the CSS PROFILE form can be found on the College Board website . The CSS PROFILE form asks more detailed and broader financial questions than the FAFSA and takes into account other factors such as the equity in your house. Some schools may also request a copy of a tax return, so if possible, try to get your taxes done early.
• Additional Forms: Occasionally a college may require supplemental information, so be sure to check with the school.

For divorced parents and parents who never married, the rules may vary as to what is required, so check with the school as well as FAFSA and CSS Profile.
For prospective students, beginning in the Fall of 2011 all colleges are required to post a “net price calculator” on their websites that help families figure out what freshman year will cost. The calculations are designed to be an estimate; the financial aid office will have the final say on the actual financial aid award. It is based on the “Expected Family Contribution” computed based on information on the FAFSA form.
The process of financial aid should also involve investigating grant opportunities from sources other than the college. There are numerous opportunities for scholarship and grants and many have a separate application process. School guidance offices are often the best place to start the investigation.
In addition to financial aid, there are several tax advantages for the families of college students. The American Opportunity Credit replaces the Hope Credit through 2012. The American Opportunity Credit is a maximum tax credit of $2,500 and has a higher income limit qualification than other tax benefits. Read IRS Publication 970, “Tax Benefits for Education” to determine if you are eligible. Other tax benefits may be available to you depending on your circumstances.
FPA Member Jeanne Gibson Sullivan, CFP®, is a financial planner and principal of Financially in Tune in Wakefield, MA and a parent of two sons – a freshman in college and a high school junior.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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Web chat focus was financial aid

BY CATHY JETT
Michael Farris fielded a variety of financial aid questions during the monthly Money Talk$ webchat Tuesday on fredericksburg.com.
Below is a sampling of the inquiries and the answers provided by Germanna Community College’s coordinator and director of financial aid. A complete transcript of the webchat is archived at fredericksburg.com/News/chat3/Archive?chat_id=140.
;”>My daughter is headed to Virginia Tech next year, and financing it will be a stretch for us. Our FAFSA [Free Application for Federal Student Aid] indicates that our EFC [Expected Family Contribution] is well beyond what we will pay, but we don’t have anywhere near that much money set aside.
Are there any good ‘tricks of the trade’ you can offer? Should she get her own apartment next summer to get the aid based off her own income vs. her parents?
–TS in Spotsylvania
Unfortunately, there are no “tricks” to gaining eligibility that way. Her dependency status is not associated with her place of residence or whether or not she earns an income of her own. It is based on her age, primarily. It is very difficult for a student under the age of 24 to gain independency for aid eligibility purposes.
I would recommend her possibly pursuing on-campus student employment for her first year, and maybe balancing that with a low-interest student loan. There are also parent-specific student loans that are available to folks in your situation.
This is a great opportunity to reach out to the folks in the financial aid office at Virginia Tech for more detailed information about what types of aid they have to offer.
Tip: There is no substitute for engaging the financial aid office at the school that the FAFSA is being sent to. Having worked in several different financial aid offices, at schools on both the East and West coasts, I know how critical the conversation between student and family and the college or university is. Plus, each school awards its financial aid differently. As soon as the FAFSA has been completed, call the school.
;”>Do parents’ financial obligations and credit histories have a significant impact on what financial aid is available to their children?
–KD in Fredericksburg
As a rule, no. The FAFSA examines income and assets as opposed to credit scores and familial expenses. The exception would possibly be if a parent is trying to borrow a parent-specific student loan on behalf his or her son or daughter. Federal parent loans require a credit check.
;”>What about students with disabilities does the state work with the college to fund someone that is physically disabled and has no income? Does the college offer funding for disabled students?
–BA in Stafford
Great question. In short, yes. The Federal Application for Aid takes this into account, and is able to identify and assist students with documented disabilities and supplement any existing federal or state disability benefits with additional federal funds for eligible students.
Cathy Jett: 540/374-5407
Email: cjett@freelancestar.com

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