Every year, about 1/3 of FAFSAs filed are selected for validation, which could be described as FAFSA’s version of an audit. Some FAFSAs are chosen at random for verification, whereas some schools– especially those funding need-based aid out of an endowment– will verify every application. Because verification goes through the school, it’s not unusual for students to first learn about their verification status when they receive an acceptance and financial aid award. Being selected for verification does not typically mean that you’ve done anything wrong, just that you need to provide additional information.
If you are selected for verification, you’ll either see note on your SAR requesting additional documents, or you’ll be contacted by your school, or both. Because some documentation requires time to gather, it’s important to get on this right away if it applies to you. For example, you may be required to submit an IRS transcript of your tax return.
One big issue with verification is that it places a disproportionate burden on lower-income students, since about half of Pell Grant-eligible students will be selected for verification, and this burden has been shown to reduce college attendance– a recent study showed that more than 20% of these students do not complete the verification process, thus denying them access to the Pell Grant (and any other Title VI financial aid). At the same time, a study by the National Association of Student Financial Aid Administrators showed that verification wasn’t effective at rooting out cheaters and in fact served primarily as a deterrent to students: 84% of verified students overall had no change to their EFC or a change too insignificant to impact their Pell Grant award; among students attending two-year schools that increased to 91%.
What to do if you’re selected? Get on it, ASAP. Sometimes the schools simply request documents that you’ll have on hand, but often they want to see your tax return transcript. Here are the Department of Education’s instructions on verification, as well as more details on how IRS DRT and tax return transcripts are handled.
Many financial aid awards include work study. Typically work study is awarded in a dollar amount per academic term, for example $1,000 per quarter. Which leaves a lot of people wondering what it means and how you get it. Continue reading What is Work Study?
Students who are waitlisted at their top-choice school should understand how waitlists work, because they can a little bit like Lloyd in Dumb and Dumber: “So you’re telling me there’s a chance!”
Here is a great article explaining how waitlists work. The key takeaway from a money perspective: Waitlists tend to be “need-aware” so waitlisted students who require financial aid to attend should instead focus on the schools at which they’re already accepted. Remember that in addition to the likely lower aid package, you will have to pay a nonrefundable deposit– typically in the $500-$1000 range– at your backup school to retain your spot there since waitlisted students typically are not notified of their acceptance until after May 1.
Many people asked, after my last post, how EFC gets calculated or divided with multiple children in college. It’s not a strict 50/50 division; some adjustments get made first. Continue reading EFC for Multiple Children
A friend whose son is my twins’ age was surprised recently when I told her some of the colleges my daughter was applying to. She thought they seemed unlikely choices given my constant messaging of finding affordable schools. Her son was interested in some of the same ones and the net prices they found were quite high. The answer: we have the benefit of two children in college all four years. That means our EFC gets divided between then and in many cases, this yielded lower likely net costs. Good news for my Continue reading Planning for All Four (or More) Years
If you’re still smarting from your year-end 401k statement, you might not want to read this. The 2018 NACUBO-TIAA Study of Endowments showed that even institutional investors were not immune to market performance, with endowment returns down almost 1/3 from 2017 to 2018. Endowments still managed an average return of 8.2%, though the 10-year average annual return came in at 5.8%, short of the 7.2% 10-year return target. Continue reading College Endowment Returns
When comparing the two schools my son is considering, we noticed an interesting data point: one school estimated books and supplies to cost $800 annually; the other $1,146. One of the schools my daughter applied to estimates $1,800. While I can certainly understand that different meal plans or living options might be more or less expensive at different schools, it’s hard to understand why books would cost 50% or 100% more from school to school. Continue reading Budgeting for Books and Supplies
(Or: Why You Should Talk to Your Kids About Money Before Applying)
My son applied to two schools: In-State-U and an Out-Of-State-U-With-A-Scholarship. I’m fairly certain that a big reason for applying to OOSU was that his sister is applying to a number of schools and he felt like maybe he’d be doing something wrong if he didn’t. He wants to attend a big school; he loves sports and wants a D-1 sports program to be part of his college experience. His GPA isn’t fabulous but he did really well on the ACT, so he did some research and discovered that OOSU has a big scholarship for out of state students that’s based solely on test scores. Continue reading A Tale of Two Acceptances
I gave a financial aid talk to college and career center volunteers at our high school recently. One question stood out: “This is a lot of information to absorb at once. Can you break it down into some specific suggestions by grade?” Two ideas are important here: College planning is a process that should start well before senior year, and there are things that can be done at any point to make things go more smoothly when the time comes to start applying. So here goes. Continue reading College Prep by Grade
Pell Grants are one of the largest federal gift aid programs, with over $28 billion going to students with high financial need in the 2017-2018 school year. While that is certainly a lot of money, the program is in fact fairly limited. Continue reading Pell Grants