“How do I file as an independent on the FAFSA?” or “How do I qualify as an independent student?” are some of the most common questions asked this time of year.  Once students and parents start digging into the FAFSA form, they quickly realize that independent students have lower EFC’s and therefore have a much better opportunity for financial aid than dependent students.  When this realization is coupled with the common position that “College is my student’s responsibility, not mine…” families quickly look to find out what does it take for a student to file as an independent on the FAFSA form.  It’s difficult… very difficult.

It is not as simple as not claiming your child as a dependent on your tax forms.  That is only a very small, if even insignificant aspect of student dependency status.  Below are the questions that the FAFSA form uses to determine dependency.

1. Are you older or will you be older than 23 during the award year?
2. Are you married?
3. Are you working on a graduate level degree?
4. Are you currently serving in the US Armed Forces other than training?
5. Are you a veteran?
6. Do you have children you support more than 50%?
7. Do you have other dependents you support more than 50%?
8. At any time since you were 13 regardless of present condition… are your parents deceased, or in foster care, or a ward of the court?
9. Are you or were you an emancipated minor as determined by a court?
10. Are you or were you in legal guardianship as determined by a court?
11. At any time on or after July 1, 2008, did your high school or district determine you to be an unaccompanied youth who was homeless?
12. At any time on or after July 1, 2008, did the director of an emergency shelter or federally funded transitional housing program determine you were a unaccompanied, homeless youth?
13. At any time on or after July 1,2008, did the director of a runaway or homeless youth center determine you to be an unaccompanied youth who was homeless or were self-supporting at risk of being homeless?

Questions 1 through 8 were the standard dependency questions for years.  Not until last year have the questions been expanded.

These questions are pretty straight forward.  If the student can answer “yes” to any of the above questions, then they can file “independent” status.  If they cannot answer “yes” to any of the above questions, then the student will be considered a dependent student.  In some very unusual circumstances, students can get a waiver from the financial aid office at the college which they are enrolled.  But a parent’s desire for a student to take care of their own college expenses is far from likely to merit a waiver from a financial aid officer.

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The FAFSA is the standardized financial information form used by all colleges and universities across the country.  For 2010, sweeping changes have come to the FAFSA form.  This 60 minute webinar will orient you to the FAFSA in its new form.  We will be covering:

• FAFSA on the web
• The PIN website
• Financial Aid Priority Deadlines
• The FAFSA worksheet
• EFC and how it impacts you

The webinar will be at 7pm (central time) on Wednesday, January 20th.  Register below.

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The 2010-2011 FAFSA Worksheet has been out for a while now.  You can get a PDF copy here. Frankly, it’s simplicity concerns me.  Let me explain.

For years, most colleges and universities have relied upon the FAFSA for the needed information to determine not only a student’s eligibility for federal financial aid sources, but the state’s, and the college’s own money as well.  The feds in their attempts to make the financial aid system simpler have stripped the FAFSA down to such little information that it will be useless for the colleges and states.  What families can expect to see in response to the stripped down FAFSA are far more complex institutional forms, more state forms, and more colleges being forced to subscribe to the CSS Profile.

What we are about to see is another great example of the law of unintended consequences.

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College Finances 101: Introduction to college funding and financial aid is now available for review.  This recording was made on the evening of December 8th, 2009 and covers the following:

• The college funding environment
• The college financial aid system
• Expected Family Contribution (EFC)
• FAFSA
• CSS Profile
• Financial Aid Priority Deadlines
• College Financial Track Records
• College Application Strategies
• College Financing
• Strategies and Tactics to Minimize College Costs and Increase College Financial Offers
• Negotiating the College Financial Award

This overview runs about 71 minutes. After you have finished watching, click the link below the video to request a PDF of the presentation be emailed to you.

Should you have any problems viewing the video, you may need to update your computer’s flash player.  You can do that at the Adobe website.

Webinar Response Form

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When is a student supposed to file their FAFSA and other financial aid forms?  This is a question families are asking all across the country right now.  Their admission applications are pretty well done.  Now it’s on to the financial paperwork… but hold on a minute.  Many parents and students are jumping the gun.

The CSS Profile has been available to file for the coming school year since October.  This gives families plenty of time to complete what is arguably the most complex of all financial aid forms.  Only about 350 colleges want the Profile filed, so the large majority of families have nothing to do with this form.  But you better be sure and double check with the schools to which you have applied to make certain you haven’t overlooked it.

The 2010-11 FAFSA will not be available until January 2010 however, and this creates some confusion.  In their zeal to get on top of all the details, many students and families have completed the already available 2009-10 FAFSA thinking they were completing the right paperwork for the next college year.  I hate to tell you this, but you just wasted a good chunk of time and energy on a form that is useless to you.

If you are one of the unfortunate students or families that were confused by the FAFSA forms, you will have to wait until January 2010 and redo the new FAFSA.  There is no way for the schools to hold over or transfer your information.  A new FAFSA must be completed.

The good news is you will be much better prepared to complete the FAFSA than your neighbors will.

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People often ask “what is the annual FAFSA or CSS Profile income limit that still allows my student to get college financial aid?”  This is a logical question, right?  The IRS uses all kinds of income limits for taxes.  Loan companies have income limits for borrowing money.  Colleges have grade point, ACT, or SAT limits for awarding money.  So what’s the income limit for getting college financial aid?

There is none.  There are no income limits for college financial aid.

College financial aid is a very complex calculation which utilizes student and parent income and assets, number of students in college, the cost of the college, amount of taxes paid, and a whole host of other information to determine what a student is eligible for.  There are no hard and fast rules that says one family will get $5,000, but the family making X number of dollars more will get nothing.  In fact, I have seen situations where a family with income around $70,000 per year received no financial help from a college, while a family making $200,000 received a pretty good chunk of money.  The money the student is awarded is dependent upon the unique factors of that student’s individual family.

Now there are some pieces of financial aid which have EFC (expected family contribution) limits attached to them such as Pell Grants, SEOG grants, and certain subsidized loans.  But EFC and income are not directly correlated.  There are also some individual colleges and universities which will have their own internal policies keyed to specific income levels, but these individual policies are not universal by any means.  For example, Harvard University will cover the total cost of college for student’s whose families make less than $60,000 per year.  But again, this is specific to Harvard.  Also, students whose families make more than $60,000 will be eligible for substantial amounts of financial help specific to their unique circumstances.

Do not get hung up on any kind of income limits.  Always complete the financial aid paperwork.  If you have heard about some income limit above which students don’t get any help, then your listening to useless rumor and inuendo.

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Next Webinar is…

Tuesday, December 8th, 2009 at 7pm Central Time

Register Below

College Finances 101 has now come to the web. Attendees have been praising this ground breaking presentation for years; now you can participate in the comfort of your own home or at work.

In 90 minutes, I will cover the most important aspects of minimizing your students’ costs for college. You will learn…

• How parents can often send their children to expensive private colleges for less money than a state school.
• How to fix lost money caused by popular college savings plans.
• How to identify schools that give you more free money.
• The great myths and misconceptions about college funding that can cost you thousands of dollars.
• What assets are penalized 4 times higher than others when applying for help.
• Why waiting one year can cost you as much as $5,000.

“The information Mr. Anderson shared was
incredibly eye opening.” — Tricia Christiansen, Guidance Counselor,
Hampton-Dumont HS, Hampton, Iowa

“What an eye opener! We wish we had
attended this seminar sooner. This seminar has given us ideas and
information but also hope…” — Dave & Maria Sullivan, Rock
Island, Illinois

“He has provided our families with
invaluable information. Scott does an excellent job…” — Linda
Cutler, Guidance Counselor, Rockridge High School, Taylor Ridge,
Illinois

“Listening to all the options available
to pay for college encouraged us that we don’t have to sacrifice a
quality education because of a lack of money.” Pastor Scott & Tonya
Culley, Silvis, Illinois

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In July of this year, I published an article titled The Mythical Ivy Impact.  I discussed the evidence which suggests striving to get into prestigous colleges like Harvard, Stanford, or Yale may not be worth it if you have to take on substantial debt to do so.  Now it’s the fall, and discussions about college selection are flying all over forums on the Internet.  And I am still surprised how quickly the knives come out when you suggest it may be better to take the money and go to a so called “second tier” school, as opposed to mortgaging your future to pay for an Ivy or near-Ivy college.

I invite you to read my full article at the link above.  Also, here are the links to the supporting articles from USA Today and the Brookings Institute:

USA Today: Wanted: CEO, No Ivy Required PDF

Brookings Institute: Who Needs Harvard PDF

In a nutshell, don’t get hung up chasing prestigious named schools.  If you get in and it’s reasonably affordable, great!  But there is no reason to put yourself under a mountain of debt.

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I’ve often said it’s important for students to stay in contact with the decision makers at college.  In the fall, that would be the admissions office.  But there is a balancing act you need to walk when asking for the time of college reps.  You want them to know you are serious about their school, but you do not want to be… well… a pest.

Chapman University’s admission office helps provide a little perspective on this…

Thanks to Mark Montgomery at GreatCollegeAdvice.com for pointing this video out.

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I just finished reading Financing Your Future by Linda Abraham and Rebecca Blustein.  I’ve been following Linda Abraham (founder of Accepted.com) for some time now.  Her specialty is in helping students get admitted into graduate level college programs, but this is the first of her books that I have read.  For obvious reasons, college financing will always rise immediately to the top of my interest list.

There are some significant differences between funding for undergraduate college and graduate level college.  The Secrets to Real College Savings will not cover all the intricacies of graduate level finances.  Linda and Rebecca do a good job of providing an overview of graduate level college funding in their book.  I appreciate their writing style which is not populated with a lot of fluff to fill pages.  Thankfully, they apparently do not believe that the value of a college financial guide is determined by its thickness.  Their guide is also populated with dozens of hyper-links to more online resources helpful to grad students.

If you are an aspiring graduate student, I recommend you check out Financing Your Future.

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