Compare Colleges Find Scholarships Financial Literacy College Pulse

Tag Archive | "Fafsa"

The FAFSA Song (video)


Posted in VideosComments (1)

Get A Sneak Peek At The 2013-2014 FAFSA Form!


The FAFSA is the single most important instrument that a student/family should utilize to access funds for college. The FAFSA (Free Application for Federal Student Aid) is responsible for gathering information related to the assets and income of families and their students, churning it through a lengthy calculation (you can download a copy of the 36 page formula here), and spitting out an EFC (Estimated Family Contribution).

That EFC figure is then sent to all the colleges and universities designated by the student during the FAFSA application process. This is where the magic happens! 😉 Those colleges and universities will take that information and start going to work on putting together a comprehensive financial aid package for you that includes need-based and merit-based awards, a work-study component, and usually a federal direct student loan option.

Officially, you can not file your FAFSA until January 1st of 2013. You can submit the paper option (access a draft of 2013-2014 FAFSA here) but I recommend that everyone complete their FAFSA online at www.FAFSA.gov. You may be tempted to go to FAFSA.com, however, even though they will gladly file your FAFSA, they will also charge you about $80 for their services. Remember, the first “F” in FAFSA stands for FREE.

Submitting your FAFSA online provides you the ability to save any work that you completed and return to it later. In addition, the Department of Education has implemented skip-logic technology to make sure that you only answer the questions that are applicable to your situation. Lastly, the online FAFSA has a new IRS Data Retrieval Tool (DRT) that gives families the option of importing their IRS tax information directly into their FAFSA. This has been a great resource for FAFSA filers but it has not come without its glitches (see articles below):

As you are starting to gather your information together to prepare for filing your FAFSA, please don’t hesitate to utilize the resources here on CheapScholar.org to help you along the way. Here are a few articles that may prove to be helpful (and one that is a little humorous):

Posted in Financial AidComments (1)

Financial Aid – Should I Fill Out The FAFSA?


If you’re considering going to college—undergraduate or graduate—you’ve probably heard a variety of educators, teachers, administrators, and fellow students discussing the FAFSA, or the Free Application for Federal Student Aid, as though it were the most important form in the world. For many students who have aspirations of climbing the ladder from higher education into lucrative careers in life sciences, financial consulting, or any number of highly specialized fields, the FAFSA may very well be one of the most important documents out there.

So, if you’ve found yourself asking ‘do I really need to fill this thing out,’ the short answer is: if you’re planning on receiving some kind of financial aid for school, then yes. Here is a breakdown of the more specific forms of financial aid the FAFSA makes you eligible for:

Pell Grant—Pell Grants, named after U.S. Senator Claiborne Pell, are sponsored by the Department of Education and covered by federal legislation dating back to the mid sixties. The Pell Grant allocates up to $5,500 for enrollment at over 5,400 educational institutions across the nation. This grant is specifically tailored for students with low EFCs (estimated family contribution).

Stafford Loans—Stafford loans are available to students enrolled in higher education institutions. Available as both subsidized and unsubsidized loans, interest rates for the Stafford awards are currently at 6.80%.

Perkins Loans—Perkins loans are similar to Stafford loans, but are given directly from schools that are Title IV eligible. There is a fixed interest rate of 5% that is sustained over the ten years the recipient has to repay the loan. Graduates can earn a lifetime amount of $60,000 from a Perkins.

Federal Work-Study Program—This is a federal program set up to help students pay for their educations while also earning an income. Students usually work at an on-campus facility, such as a library or dining hall,  and apply their earnings toward tuition costs or other miscellaneous living expenses. This is one of the most common forms of financial assistance in the American educational system and is open to all students in need.

All four of the preceding financial assistance programs require the proper filing of a FAFSA, underscoring the importance of the form. All in total, the FAFSA is your portal to applying for nine federal student-aid programs, over 600 state aid programs, and most other forms of grants, scholarships and institutional aid offered for education.

So in other words, yes, you definitely need to fill out a FAFSA.

Today’s guest article was provided by Amanda Green.

Posted in Financial AidComments (0)

Good News! – Short Reprieve For Data Retrieval Tool Requirement


Over the course of the past few weeks, CheapScholar.org has been covering the implementation of the new IRS Data Retrieval Tool that has been incorporated into the FAFSA filing process. The concept of making the information gathering process easier is a noble one but there has certainly been some challenges along the way.

Here are some of the informative DRT articles graciously provided by Mr. Randy Green, Financial Aid Director at Wittenberg University:

Digging up “DRT” on the New FAFSA IRS Linking Tool

Unearthing More “DRT” on IRS FAFSA Data Retrieval Tool

Based upon the amount of traffic we have seen and the number of comments and emails that have been received, the IRS Data Retrieval Tool has certainly been a hot topic for families and students.

In an effort to keep our readers up-to-speed with information related to the DRT, I wanted to share with you the most recent announcement provided by the Department of Education. It appears that a temporary reprieve from the DRT requirement is being provided through July 15th.

Below are some excerpts from the announcement letter. However, you can click here to see the entire document. Hope this helps!

As the April tax deadline approaches, we are aware that some students and families may not be able to immediately use the FAFSA-IRS Data Retrieval Tool or to obtain IRS Tax Return Transcripts needed to complete the verification process primarily because of the large volume of tax returns coming in at this time of year.

In the limited set of cases where an aid applicant, who has filed a tax return and attempted unsuccessfully to use the IRS Data Retrieval Tool or to obtain IRS Tax Return transcripts, needs a timely alternative for meeting the 2012-2013 verification requirements, institutions may, until July 15, 2012, use a signed copy of the relevant (i.e., applicant, spouse, or parent) 2011 IRS Tax Return (Form 1040, 1040A, or 1040EZ, as appropriate) as acceptable verification documentation for the 2012-2013 award year.

After July 15, 2012, institutions must comply with the acceptable documentation requirements included in the July 13, 2011 Federal Register notice and in DCL GEN-11-13.

The Department will require some institutions to obtain verification documentation in compliance with the current acceptable documentation requirements for a sample of the institution’s students whose information was verified using a paper copy of a tax return.

Posted in Financial AidComments (0)

Unearthing More “DRT” on IRS FAFSA Data Retrieval Tool


Today’s guest article is provided by Mr. Randy Green, Director of Financial Aid at Wittenberg University.

Last week, I received this email from the mother of one of our college sophomores.

“This has been a very frustrating time with the new policy on obtaining IRS transcripts for financial institutions.  I have been calling for the past month to obtain this document for financial aid and as of today this document is still unavailable.

This creates such a discomfort in award distribution, not only for the institution, but the recipients.  My son, [name removed], felt very uneasy, as well as we as parents, about this as he is a presidential scholarship recipient.  He is working so hard at the university and finds this discouraging.

According to the IRS this document may not be available until late April early May 2012.  We had to pay taxes again this year and although the check was cashed by the IRS about 4 weeks ago the document is not available until the time indicated.  Please somehow assure students of their scholarships because this is discouraging.”

To be clear: tax filers who received a refund are having their returns processed first; tax filers who had to pay on their taxes had their checks cashed, but have returns that will not be processed until late April or May – a delay of twelve weeks or more.

I responded to the mother that the delay caused by the IRS Data Retrieval Process would not affect her son’s financial aid package here, but that the package would not be final until the verification process is completed; it appears likely that this will happen in May at the earliest.

We perform a quick review of every ISIR (the school side of the FAFSA results) we receive, but when I received her email I pulled her son’s record and looked it over closely.  There is nothing obviously wrong with the data (the taxes paid are in a “normal” range, the wages earned are close to the Adjusted Gross Income, and so on), but the most reassurance I could give them is that everything appeared to be in order.  The final aid package must wait for a completed verification.

March and April can be anxious, frustrating times for families even if everything goes smoothly.  Requiring that families use the Data Retrieval Tool or IRS tax transcripts to complete verification adds to that frustration.  The fact that they will not be available – due to IRS policy decisions on processing tax returns – until May takes that frustration to a whole new level.

The powers-that-be should note two items that may make this issue explode in the next four weeks:

1) In mid-April the Department of Education is going to send out a reminder to families that they should use the DRT process,  i.e. to people who have already tried to use it and were told they cannot use it until May;

2) May 1 is the national deposit deadline for most colleges – some families are going to be asked to commit before their financial aid packages are final.

We have always had those families who miss deadlines, who don’t file taxes properly, who don’t respond to instructions on verification.  And there have been those who have situations that require a delay due to tax filing extensions.

The difference this year is that families who do everything right – those who file their FAFSA and tax returns on time and accurately, who respond quickly to requests for information – are barred from getting their financial aid in a timely fashion solely because of federal policies.

Posted in Financial AidComments (2)

The FAFSA In 7 Easy Steps (video)


Posted in VideosComments (0)

Email Message Sent In Error To FAFSA Filers Nationwide


Completing the FAFSA is the single most important step a family can take when trying to access funds to help cover educational expenses. Quite a bit of emphasis is put on families to complete the FAFSA as soon as possible. As a matter of fact, the FAFSA process allows for estimated tax information to be submitted if a family has not yet filed their taxes with the IRS.

Families that choose to submit estimated tax figures are required, utilizing information from their tax forms or via the IRS Data Retrieval Tool,  to go back into the FAFSA portal later and submit actual figures. The Department of Education sends reminders out to these families but for some odd reason they decided to send that notification out yesterday.

So, if you got that notification/email (see below), don’t worry, don’t despair, don’t call your financial aid office…you are fine. Just don’t forget to submit your actual figures after you file your taxes.

Email below has been graciously provided by one of our regular contributors, Mr. Randy Green.

************************************************

Subject: Important – Updates Needed for Your FAFSA

Dear JONATHAN,

When you completed your 2012-2013 Free Application for Federal Student Aid (FAFSA), you indicated that you were going to file your taxes and were providing estimated 2011 tax information.  Now that the federal tax filing deadline has passed and you have probably filed your 2011 tax returns, it is time for you to update your FAFSA.

You can update your FAFSA at www.fafsa.gov.  You should change your answer on the FAFSA (question 32) to reflect that you have “already completed” your tax return.  Once you’ve made this change, you will need to update the information you initially reported on the FAFSA to reflect the actual information from the 2011 tax return you filed.  If you filed a federal tax return with the IRS, when you access your FAFSA online, you may be eligible to use the IRS Data Retrieval Tool, which is the best and easiest way to provide accurate tax information.  With just a few simple steps, you can view information from your IRS tax return and transfer that information directly into your FAFSA.

If you are unable to use the IRS Data Retrieval Tool, you are still required to update the income information on your FAFSA so that it reflects the information on the 2011 tax return you filed.  The tax-related questions you should review on your FAFSA include adjusted gross income, income tax paid, number of exemptions, and income earned from work.  You should also ensure that your FAFSA correctly identifies the type of tax return that was filed (IRS 1040, 1040A, 1040EZ, foreign tax return, etc.) and that you have entered the correct amounts for Additional Financial Information (questions 43a-f) and Other Untaxed Income (questions 44a-j).

It is important that you make the necessary changes to the tax information so that your FAFSA includes the same information that was included on your tax return.  However, when making corrections based on your completed federal tax returns, do not update other information that was correct at the time you filed your FAFSA.  For example, do not change your answer for household size (question 93) or for number in college (question 94); unless your answer was incorrect as of the date your FAFSA was originally signed.

Your ability to receive federal student aid can be impacted if you do not make the necessary updates or corrections.

Thank you for your attention to this important matter.  If you have additional questions regarding the IRS Data Retrieval Tool, online help is available.  Visit www.fafsa.gov and click the “Browse Help” feature on the FAFSA home page for information on the tool and the FAFSA process.

U.S. Department of Education

Federal Student Aid

Posted in Financial AidComments (1)

2012-2013 FAFSA On The Web Demo (video)


Related Posts with Thumbnails

Posted in Financial Aid, VideosComments (0)

Advert