529s are a source of a bit of confusion when it comes to filling out the FAFSA. Here are some common issues:
529s for multiple children: All of the parents’ 529s get reported on the FAFSA as parent assets. Let’s say you have 3 children, ages 17 (the one whose FAFSA you’re completing), 15, and 12, and you have a 529 account for each with balances of $12,000, $10,000 and $7,000. You would report $29,000 in 529 assets. Continue reading 529s and the FAFSA
The Department of Ed lists common FAFSA errors in a recent blog post. Here’s a cheat sheet on the ones that seem to generate the most confusion: Continue reading Common FAFSA Mistakes
Now that everyone is excited about the FAFSA, it’s nowhere to be found. Not last year’s, not this year’s. If you want a head start on collecting info, here is last year’s FAFSA Worksheet. Swap 2017 for 2016 and 2018 for 2017 and you’ll see exactly what documents and other information are needed.
And of course, the concrete step you can take today to prepare for the FAFSA is to get an FSA ID. Parents and students each need one. For married parents, only one parent needs to create an FSA ID.
529s really started to gain popularity after 2001, when qualified distributions became tax-free. Up until then, UTMA accounts were a more popular option to save on behalf of a child, and they have remained widely used. However, as financial aid calculations and rules have become more codified, the UTMA has become far less beneficial as a college savings tool. That’s because an UTMA is treated as a student asset, meaning it gets no Continue reading UTMA to 529 Conversions
It’s the busy season for insurance and annuities hucksters who tell parents of college-bound students that spending their assets to buy an insurance policy will yield all manner of financial aid benefits. Before you start making expensive moves that end up costing more in the long run, you should figure out what will really benefit you. Continue reading FAFSA Asset Do’s and Don’t’s
This is a quick refresher on how the FAFSA works. The most important part of how it works is this: The FAFSA calculates your Expected Family Contribution. It is not the tooth fairy. The schools to which you apply use your EFC to determine your aid package. The FAFSA does not obligate them to meet your need; however, for purposes of Title IV funds (federal student aid), it does obligate schools to use standard criteria in packaging aid awards. The second most important part is this: much like preparing your taxes, you Continue reading FAFSA Basics
Next year’s FAFSA will be available on Oct. 1. That doesn’t mean you need to rush online and complete it on Oct. 1. Here are a few things that should factor into your timeline for completing it. Continue reading Preparing for the FAFSA
The Department of Education has released the EFC Formula Guide for this fall’s FAFSA. The Formula Guide is the detailed calculation behind Expected Family Contribution, FAFSA version. Families who will be completing the FAFSA this fall should take a look. Continue reading FAFSA Formula 2019-2020
Step 1 in figuring out how to pay for college is estimating your EFC. You can use the FAFSA4caster, or the more detailed EFC Formula Guide (note that’s for 2018-2019; the 2019-2020 version should be released this month). But EFC is just a starting point: schools aren’t required to meet your need, and they certainly aren’t required to meet it through gift aid. That’s why net cost and aid packaging are important concepts to understand. Continue reading EFC, Net Cost and Aid Packaging