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Here is a collection of questions we frequently get that may be helpful to you. |
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FAQs about Financial Aid
Here are some of the most commonly asked questions about financial aid.
Topics:
General Questions about Eligibility and Applying
1. I probably don't qualify for aid. Should I apply for aid anyway?
Yes. Many families mistakenly think they don't qualify for aid, and prevent themselves 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. There is no good excuse for not applying.
2. Do I need to be admitted before I can apply for financial aid at a particular 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 university.
3. Why can't I 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. After all, your parents might earn a year-end bonus or realize capital gains from selling stocks on December 31. If you submit the financial aid application before January 1, it will be rejected.
4. 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 making satisfactory academic progress toward a degree, such as earning a minimum number of credits and achieving a minimum GPA.
5. 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.
6. 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 you are under 18 and they co-sign your loan. In general you and you alone are responsible for repaying your educational loans.
On the other hand, 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, not them.
7. Why is the family contribution listed on the SAR different from the family contribution expected by the university?
The federal formula for computing the expected family contribution is different from those used by many universities. In particular, the federal formula does not consider home equity as part of the assets.
8. 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 absense 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 is used up.
If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.
9. 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 MIT 40% of the scholarship amount is applied toward the self-help level, and the rest replaces institutional funds. At other universities outside scholarships are used to replace loans instead of grants.
10. What are GATE loans, and why doesn't my university participate?
GATE loans is a nonprofit private loan program (Guaranteed Access to Education) offered through participating schools in conjunction with Bank of America, Bank of Boston, and the National Collegiate Trust (NCT). There is a minimal credit check and schools can recommend whatever loan amount they'd like the student to receive. The interest rate is also rather low.
Students and parents should call 1-617-639-2000 for more information about the program (in New York, 1-212-551-3650). See also their entry in the lenders area of the Financial Aid Information Page.
If this program is so wonderful -- no loan limit, no credit check, low interest rate -- why don't more schools participate? There are several reasons why a university might not want to participate in this program:
There is some risk-sharing by the schools. As a result, the program will be most attractive to schools with a low default rate.
The schools receive less than the full face value of the loans immediately, with the up-front amount depending on the school's default rate and the interest rate. In effect, the schools are providing part of the loan capital.
There are no federal guidelines or regulations governing this loan program.
Membership is not open to two-year colleges.
Universities that are interested in participating in the GATE loan program should call 1-800-895-GATE (4283) and ask to speak to Kevin Walker or Thatcher Fields.
11. 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
12. 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 (question 55), income earned from work (question 57) and the totals from Worksheet #3 (question 64) on the FAFSA. Work-study earnings should only be included in the answer to question 64 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.
1. Where can I gat a copy of the FAFSA?
You can ask your guidance counselor for a copy, or download the PDF version of the form from this site (instructions for filling out the form appear on this site, too). 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.
2. 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.)
3. 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 ok to use estimates of your income, so long as they aren't 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.
4. I sent in my FAFSA over four weeks ago, but haven't heard anything. What should I do?
If you haven't received a Student Aid Report (SAR), call the Federal processor at 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
to find out whether your FAFSA has been processed or to request a duplicate copy of your SAR.
5. My parents are separated or divorced. Which parent is responsible for filling out the FAFSA?
If your parents are separated or divorced, the custodial parent is responsible for filling out the FAFSA. The custodial parent is the parent with whom you lived the most during the past 12 months. Note that this is not necessarily the same as the parent who has legal custody. If you did not live with one parent more than the other, the parent who provided you with the most financial support should fill out the FAFSA. This is probably the parent who claimed you as a dependent on their tax return. If you have not received any support from either parent during the past 12 months, use the most recent calendar year for which you received some support from a parent or lived with either parent.
Note, however, that any child support and/or alimony received from the non-custodial parent must be included on the FAFSA.
Financial aid applications can be somewhat confusing because there are several different criteria applied for different kinds of parenthood:
2.The parent who provided the most financial support to the child during the past 12 months.
3. The parent who provided more than half the child's support (and will continue to do so).
4. The parent who has legal custody.
5. The parent who claimed the child as a dependent on their tax return.
For determining household size (the number of family members), criteria 3 is the most important. However, the student's custodial parent gets to list him or her even if the custodial parent does not provide more than half of the student's support. This leads to the anomalous situation where a student can be counted as belonging to two different households. For example, suppose the non-custodial parent remarries and has college-aged children of his own. If the non-custodial parent provides more than half of the student's support, he gets to list the student as a member of his household even though the custodial parent has also listed the student as a member of her household. (The IRS tax return instructions prevent this kind of double dipping on tax returns, but the FAFSA instructions apparently don't.)
Criteria 3 is also used to determine whether the student has one or more dependents, in the rules for specifying whether the student is an independent student with dependents.
Criteria 4 and 5 are not used in the financial aid formulas, but are sometimes used to give an indication of the right choice when the other criteria are insufficient. Criteria 5 is also sometimes used to substantiate claims made under criteria 3. For example, a financial aid administrator may ask a parent for a copy of their tax return, to see whether they claimed the child as a dependent. Criteria 5 usually implies criteria 3, because the IRS definition of a dependent includes a 50% support test. There IRS definition includes a few exceptions where the parent isn't required to provide more than half the child's support in order to claim the child as a dependent, but in almost every case, if the parent could not claim the child as a dependent (criteria 5), they did not provide more than half the child's support (criteria 3).
6. My parents are divorced, and the parent I'm living with has remarried. Does my step-parent have to report his or her income and assets on the FAFSA?
Yes, provided that the parent you're living with is the one filling out the FAFSA (your custodial parent). If your step-parent is married to them at the time you fill out the FAFSA, they must report their income and assets even if they weren't married to them in the previous year.
7. My custodial parent remarried and signed a pre-nuptual agreement that absolves the step-parent from financial repsonsbility for my education. Why does my step-parent have to provide financial information on the FAFSA?
Prenuptual agreements are ignored by the federal need analysis process. After all, two individuals (parent and step-parent) cannot make an agreement between them that is binding on a third party (the federal government). The federal government considers the step-parent a source of support regardless of any prenuptual agreements to the contrary. If a step-parent marries the parent, he or she is considered responsible for supporting the parent and children even if he or she is unwilling to do so.
8. I was born on January 1, when I will be 24 years old. Can I check Yes in the answer to the FAFSA question "Were you born before January 1, ..." to qualify as an independent student?
The official answer is no. If you check yes, your SAR will be flagged for verification. However, most financial aid administrators would use professional judgment to override the default dependency determination for a student born on January 1 who also demonstrates financial self-sufficiency.
9. 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:
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 1997-98 SARs and ISIRs.
10. 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.
Home Schooling and Financial Aid
1. Are there any programs that provide financial assistance to families who are home schooling their children?
The US Department of Education's Office of Elementary and Secondary Education does not currently provide any funding for home schools.
Many states require that home schooled children take the GED to be eligible for state aid for college. To be eligible for federal student aid, the student must pass an independently administered test that is used to determine the student's ability to benefit from postsecondary education. Tests approved by the US Department of Education include the ACT, ASVAB, ASSET, BEST, ETS TALS forms A and B, GED, PSAT, SAT, SLEP, TABE, TOEFL, and several others. Call 1-800-4-FED-AID for a full list of approved tests.
Try calling the National Home Study Council at 1-202-234-5100 or writing to Michael Lambert, Executive Director, National Home Study Council, 1601 18th Street, NW, Washington, DC 20009. Also try calling Michelle Boyle in the Office of the Secretary of the US Department of Education at 1-202-401-1365. See also the Homefires web page
1. I have heard about a scholarship for left-handed students. Can you tell me more information about it?
This question comes up frequently, because the popular press and scholarship matching services like to use it as an example of unusual scholarships.
The only scholarship for left-handed students is the Frederick and Mary F. Beckly Scholarship of up to $1,000. This scholarship is awarded to left-handed students who will be attending Juniata College. This scholarship is not available to students who aren't enrolled at Juniata College. For more information, write to Office of Student Financial Planning, Juniata College, 1700 Moore Street, Huntington, PA 16652. |