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Final 2010 – 2011 FAFSA Issues Resolved

FAFSA_iconThe online and paper FAFSA is an ever evolving process/document. Since it is created by humans at the Department of Education, it is only natural that a mistake here and there will pop-up to try and throw you off-track with your FAFSA filing.
Jennifer Douglas is the General Manager for Student Aid Awareness and the Federal Student Aid Program. She recently released a report citing a couple of mistakes on the online FAFSA that have now been corrected. (Paper forms will not be corrected but a PDF of the new FAFSA is available here.) The issues shouldn’t be anything that would have caused you great problems but take a look at the information below and be sure to double check your FAFSA if you think you completed something inaccurately.

Issue One
Recent legislation created the American Opportunity Credit in addition to the current Hope and Lifetime education credits. Many tax payers will be claiming this credit instead of Hope/Lifetime; so we have updated the FAFSA to reflect this change. This change is reflected in 44a and 92a.

Previous Wording — Education credits (Hope and Lifetime Learning tax credits) from IRS Form 1040 — line 49 or 1040A — line 31.

Corrected Wording — Education credits (American Opportunity, Hope and Lifetime Learning tax credits) from IRS Form 1040 — line 49 or 1040A — line 31.


Issue Two
Combat pay should not be included in other untaxed income not reported elsewhere, whether or not the person was a tax filer; so we have removed the reference “if you are not a tax filer” This change is reflected in 45i and 93i.

Previous Wording — Other untaxed income not reported in items 45a through 45h, such as workers’ compensation, disability, etc. Don’t include student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military housing or a military housing allowance, combat pay (if you are not a tax filer), benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels.

Corrected Wording — Other untaxed income not reported in items 93a through 93h, such as workers’ compensation, disability, etc. Don’t include student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels. Armed forces families can further clarify student aide tax questions with online software when they file taxes.

Hope this information helps our families as you work through the FAFSA and try to maximize your student financial aid!

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