Federal Financial Aid

What I Need to Know About Federal Financial Aid

How do I file the FAFSA? www.studentaid.gov

• Both the student and one parent will need an FSA ID and password to file the FAFSA electronically.

  • Apply for both FSA ID’s and password at studentaid.gov prior to completing the FAFSA.

  • We recommend that you choose a security question that will never change such as your mother’s maiden name or the city you were born in, etc.

  • Both parents and students will use their 2023 tax information. 

• The FAFSA will determine what your EFC is

  • Expected Family Contribution (EFC): The amount a student and his or her family is expected to contribute toward the student’s cost of attendance. The EFC is used to determine a student’s eligibility for the student financial assistance programs.

• What will I qualify for by completing the FAFSA?

  • Federal Pell Grant – Awarded based on financial need and low EFC calculated from the FAFSA – 2020-2021-$6345

• • FSEOG – Awarded based on financial need and funds available to the institution from the federal government.
  • Federal Work Study - Awarded based on financial need and funds available to the institution from the federal government. Basically part time employment for students
  • Federal Direct Subsidized Loan – Interest is covered by the federal government while the student is in school. Maximum award for a first year student is $3,500.
    • 73 % interest rate
  • Federal Direct Unsubsidized Loan – Interest begins to accrue as soon as funds are disbursed. Minimum award for a first year student is $2,000. If a student does not qualify for the Federal Direct Subsidized Loan, then the student will receive $5,500 in this loan.
    • 73% interest rate
  • Federal Direct Parent PLUS Loan – Loan in one parent’s name and is based off of credit-worthiness to assist in paying for uncovered cost of education. If the parent is denied this loan, the student is automatically eligible for an additional $4,000 in Federal Direct Unsubsidized Loan.
    • 28% interest rate 

• The FAFSA has an IRS Data Retrieval Tool (DRT) that can pull your tax information into the FAFSA. Just make sure that when using this tool you enter your address exactly how it appears on your tax form.

What happens next?

• Central Processing System (CPS) notifies student of FAFSA processing by email
• ISIR sent to colleges listed on the FAFSA approximately 10 to 14 days after FAFSA is filed
• College will review the ISIR
  • Verification – randomly selected by Dept. of Ed
    • School will request additional information and check for any errors - taxes must be uploaded
    • If DRT cannot be used, families will be required to get tax transcripts from IRS or provide a signed copy of the 1040 form.
    • Selected for all colleges listed on the FAFSA

 Do I need to provide parent information for my child?

• Yes, as long as the student is under the age of 24 the Federal Government requires that the student provide parent information.
• Exceptions to this rule are as follows:
  • The student is an orphan or ward of the court
  • Is an orphan, in foster care, or a ward of the court any time when the student was 13 yrs. of age or older (documentation is required)
  • Emancipated minor or in legal guardianship (documentation is required)
  • Youth that is homeless or at risk of being homeless and is documented during the school year (documentation is required)
  • Is a veteran or serving in the Armed Forces for purposes other than training
  • Is married or has legal dependents other than a spouse
  • Has dependent children
  • Presents documentation of other unusual circumstances demonstrating independence to the financial aid administrator

Which parent provides the financial information?

• If the biological or adoptive parents are married and living in the same home, then both parents information is required.
• If the biological or adoptive parents are NOT married BUT living in the same home, both parents are required to provide the information.
• If the biological or adoptive parents are divorced or separated and NOT remarried, then the parent that provided more than 50% support to the student is to provide the information.
• If the biological or adoptive parents are divorced or separated and are now remarried, then the parent that provided more than 50% support to the student is to provide the information along with their current spouse.
• If the biological or adoptive parent is widowed, then report the income of the living parent.
• If the biological or adoptive parent is widowed and now remarried, then report the income of the living parent and their current spouse.
• If the biological or adoptive parents are in a same sex marriage, BOTH parents are required to provide information.

What do I include on the FAFSA as assets?

• You will be required to provide current balances of cash on hand, savings, and checking accounts.
• The value of a 529 college savings plan is reported as an asset to the parent if it is both the parent and student’s name. If the 529 college savings plan in in someone other than the student and parent’s name (such as a grandparent) then it is reported in the student investment information.
• Your primary home is NOT reported as an asset. However, any rental property or additional homes that you own are reported as an asset.
• A family owned business with fewer than 100 full-time employees is NOT
  • As long as the family owns and controls more than 50% of the business.
• A family farm AND the equipment used to operate the farm are NOT reported if you actively work the farm as your full-time job.
  • However, if you rent out the land for cash rent, you will be required to report that. The value of the land will be considered an asset. Money that you earn from the rent will be included in the income portion of your taxes and is not required to be reported elsewhere on the FAFSA.
• Your 401(k) accounts or pension plans through your employer is NOT reported as assets.
• Do NOT include life insurance value as an asset.
• Educational IRA are NOT included as assets.
• Keogh plans are NOT included in assets.
  • Any stocks, bonds, mutual funds, CDs, money market accounts, or other securities outside your 401(k) or pension account IS

Special Circumstance – Professional Judgements

• Each school has their own guidelines on how they handle these situations
  • Change of income
  • Change in employment status
  • Unusual medical expenses
  • Change of partial marital status
  • Death of spouse or parent