BE PREPARED
THE 7 SECTIONS
• Social Security numbers of
Student Demographics
School Selection
Dependency Status
Parent Demographics
Financial Information
Sign & Submit
Confirmation
WHAT YOU NEED TO FILL
OUT THE ONLINE FORM:
parents, step-parents and student
• Student federal income tax
returns, W-2s and other records
of money earned
• Parents’ federal income tax
returns, W-2s and other records
of money earned
• Bank statements and untaxed
income
ADD UP?
EFC DOES
WHAT IF THE
T
TELY REFLEC
NOT ACCURA
L
T’S FINANCIA
THE STUDEN
SITUATION?
B
$
GET
MORE
DOESN’T
U
O NO AT
ALSW THINGS THTE!
FE
A
SURPRISED US:
Takes about 30-45 minutes to complete
Asks your son if he’s registered for
Selective Service & allows him to register
Requires Social Security numbers of
parents and stepparents
Asks for dates of parent marriages and/or
divorce
ALL SCHOOLS SHOULD HAVE A PROCESS CALLED PROFESSIONAL
JUDGMENT/EXCEPTIONAL CIRCUMSTANCES THAT ALLOWS A STUDENT
TO EXPLAIN THE CHANGES IN THEIR HOUSEHOLD CIRCUMSTANCES.
-ANGELA M. JOHNSON, J.D. DIRECTOR OF FINANCIAL AID TROY UNIVERSITY
Maximize
your financial
aid options
Use a 529 College Savings Plan. FAFSA
puts less weight on these funds. An even better
idea is to have a grandparent own the 529 plan,
because it will not be used in the FAFSA analysis
formula at all.
FAFSA is based on your prior tax year. If
you are going to make a big purchase like a new
roof, do it the year before so that money is not
counted as an asset.
When spending asset money for
college, spend your student’s assets first since
they are assessed at a higher percentage than
parents’. Also, keep in mind that the assets of a
sibling are not calculated in the FAFSA equation.
Holding certain types of assets will
reduce your eligibility for aid. Keep in mind
that adding consumer debt will not help, but
increasing your investment spending or business
debt can mean more aid.
1
TRUE OR FALSE?
Saving for college under my child’s name will increase the amount of
financial aid we can get.
FALSE / In calculating financial aid for a dependent student, the formula counts 20
percent of the student’s assets (after deducting allowances). The formula only counts 12
percent of a parent’s assets.
2 The ages of the parents are irrelevant in calculating financial aid.
FALSE / Under current rules, a significant portion of a parent’s assets is deemed
“protected” from being used to pay for college. The amount protected is based on the age
of the older parent, with the benefit increasing with age.
3 A student’s income is so small that it is practically irrelevant in calculating
financial aid while a parent’s income is the big factor.
TRUE with a CAVEAT / A student’s income is calculated at 50 percent, while the
parents income is not factored, but is reduced for the calculations based on allowances
for taxes and family size. If the student decides to work before attending college, it will
have more of an impact.
4 Lower-income families and older parents are expected to pay less; higherincome families with younger parents are expected to pay more.
TRUE / The percentage contributions for parents vary depending on their economic
status and age.
Be sure to consult a tax adviser before using any of these strategies.
The information contained in this article is not given with the intent to
offer legal or tax advice since the situation of each individual is different.
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