Your Student Aid Index– the amount that the FAFSA says your family can pay for college– gets a lot of air time. But there’s another number that’s more important: Net Cost. Your Net Cost is your actual cost to attend a college. Net cost matters because colleges are under no obligation to meet your financial need. That means that just…
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UTMAs– custodial investment accounts for minors– are great for a lot of things. Parents or grandparents can open them for minor children, choose or let them choose investments, and growth and earnings are the child’s (though potentially taxed at the parents’ rate) and subject to the lower capital gains tax rates. One thing UTMAs are not good for is financial…
It’s here: the Department of Education has published its Student Aid Index and Pell Grant Eligibility Guide for the 2025-26 school year. This is the FAFSA formula, aka how the sausage gets made. The Guide is available for download below, but first a little context and explanation. About a week ago the Department of Education announced that this year’s FAFSA…
The FAFSA is still a few months away, so now is a good time to familiarize yourself with it. I’ll go into more details on each element in the coming weeks; for now let’s get started with the big picture of how the FAFSA calculates your Student Aid Index. First and foremost, the FAFSA is not the tooth fairy. The…
The FAFSA now uses income from your tax return only. But “income” isn’t just your wages or your Adjusted Gross Income. It’s all the income on your tax return, whether you pay taxes on it or not. Good news: starting with the 2024-25 school year, the FAFSA no longer considers income that isn’t on your tax return, such as payroll…