Preparing for FAFSA: Parent Edition

October 28, 2019

If you plan on sending your child to college, you’ve probably given some thought to financial aid. When you think of financial aid, the FAFSA may come to mind first.

Already know what FAFSA is? Skip ahead to the next paragraph.

The FAFSA, or Free Application for Federal Student Aid, must be submitted for your child to apply for federal and state financial aid for college, such as federal grants, work-study programs, and student loans. This application must be submitted each year that your child will require financial assistance. College admissions officers recommend that you complete the FAFSA application even if your child may not need financial aid. Some private scholarships at certain colleges even require the submission of the FAFSA application. Each school that you have listed on the FAFSA will receive your financial information after you’ve completed the form.

When it comes to preparing your child for college, it’s important to understand the FAFSA process and the steps you should take when submitting it. Here are the things you should keep in mind when submitting the FAFSA with your child.

Submit the FAFSA Early

While this isn’t common knowledge, financial aid is awarded on a first-come, first-served basis in some states, specifically when it comes to Federal Supplemental Educational Opportunity Grants (FSEOG grants) and federal work-study programs. Because of this, it’s important to find out your prospective or current college’s priority deadline and submit your FAFSA application before it.

While filing after the priority deadline won’t impact your child’s eligibility to receive federal student loans, they may end up taking out more in student loans due to missing out on other federal aid and even money from the institution. You can start the FAFSA application here. Find out some other important reasons why completing the FAFSA early is critical.

Create Your Federal Student Aid (FSA) ID

The U.S Department of Education replaced the Federal Student Aid PIN with the FSA ID in 2015. Your FSA ID will be the username and password you will use to access certain federal student aid websites, including fafsa.gov, studentloans.gov, and even the myStudentAid mobile app.

If your child is a dependent student and submits the FAFSA online, both you and your child will need to create an FSA ID. An FSA ID is required to sign the online FAFSA application, and you and your child cannot share an FSA ID since it serves as a signature and must be unique to each person. You can create your FSA ID here.

Use the FAFSA on the Web Worksheet

Before your child files the FAFSA online, it’s smart to check out the FAFSA on the Web Worksheet. This worksheet consists of the questions you’ll see on the FAFSA so you can know the information your child will need when filling it out.

Keep in mind that the FAFSA on the web worksheet is not part of the FAFSA application and will not be submitted – it’s simply a helpful guide for knowing what to expect on the FAFSA so you can organize your information. The questions are listed in the same order as they appear on the website and the app.

Gather Your Documents

When filling out the FAFSA, your child will be asked for basic personal information as well as information about your family’s financial situation. Depending on your situation, you and your child may need the following documents while filling out the application:

Your child’s driver’s license and Social Security card
Income tax returns from the prior-prior year
W-2 forms and other records of money earned
Current bank statements
Records and documentation of other untaxed income received such as welfare benefits, Social Security income, veteran’s benefits, AFDC, or military or clergy allowances
Records of stocks, bonds, mutual funds, and other investments
Current mortgage information
Business or farm records (if applicable)

Most of the above-mentioned steps can be completed before October 1st, which is the earliest your child can submit the FAFSA for the following academic year. By being prepared, you can help ensure that your child’s FAFSA will be filed on time so he can get as much aid as possible for your family’s financial situation. For more information on the FAFSA, check out our blog, “What is FAFSA? And Why You Should Care,” and watch our quick video, “FAFSA 101: What You Need to Know About Paying for College.”

While financial aid and grants are certainly helpful methods of paying for college, sometimes they don’t cover the complete cost of school, meaning that additional expenses will need to be covered out-of-pocket or through student loans. When considering applying for federal or private student loans, it’s important to look at the details to determine which type of student loan will be best for you and your child’s future.

If you need assistance in working through your options, contact ELFI. We have years of experience devoted to helping students realize their college dreams, so don’t wait – give us a call today.*

*Subject to credit approval. Terms and conditions apply.

Tuition

Average Cost: $10,440 (public) | $36,880 (private)*

Tuition is the amount you pay your university to enroll in classes. The total changes based on the number of credit hours you take and if you take courses with additional charges like science labs or residential academic programs that let you attend smaller classes in your dorm. Offers like the Western Undergraduate Exchange (WUE) can help students save money by providing in-state tuition to out-of-state students. Despite programs like this, the average cost of college is always rising because tuition increases each year based on inflation, school budgets, and a variety of other factors. Mandatory fees are lumped into tuition and include contributions toward campus construction and access to things like:

Student rec center
Athletic events
Career services
Student activities
Computer labs
Bus passes
Etc.

Room and Board

Average Cost: $11,510 (public) | $12,000 (private)*

Many colleges require you to live on-campus for at least your first year of attendance. The benefit of this requirement is that you’re close to classes and resources, including dining halls and bodegas that can be paid for with your room and board fees. These costs aren’t typically part of the bill for community colleges or schools with a high population of daily commuters. However, students will still need to cover living expenses like rent, utilities, and groceries if they chose not to live at home with their parents and amounts vary based on eating habits and geographic locations. For example, rent in California is higher than in Tennessee and the general cost of living in an urban setting is higher than it is at a rural school.

Books

Average Cost: $1,240 (public and private)*

Books can be a secret killer when it comes to college expenses. No one ever anticipates the sticker shock associated with their first $300 textbook. These costs also include necessary technology like tablets or laptops for note-taking and essay writing. It also can include special supplies like graphite pencils and drawing paper for art majors or scrubs or stethoscopes for nursing majors. These semesterly shopping trips can do real damage to your checking account and add to the average cost of college.

Transportation

Average Cost: $1,230 (public) | $1,060 (private)*

So far, we’ve focused on what you’ll need to pay to get by on campus, but we haven’t talked about the expenses associated with getting to campus. These costs impact resident and commuter students and range from airplane tickets and bus fare to parking passes and tanks of gas.

Financial Aid

When factoring the average cost of college, the other side of the ledger is represented by financial aid in the form of scholarships and need-based grants. With these awards, that don’t have to be repaid, the cost of tuition is reduced. In addition to scholarships and grants, federal and private loans are available to help cover the cost of college. Private lenders offer student loan options for undergraduate students, graduate students, and even parents. Loans cover everything from tuition to personal expenses that you’ll occur during your college years, like cell phone bills, clothes, laundry, or even a bed for your apartment. The biggest thing to keep in mind when taking out loans is to borrow only what you’ll need. It’s necessary to have money to pay bills while you’re a full-time student, but borrowing too much can put you in a bind when it comes time to pay back those loans.

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2019-11-12

What is Early Decision for College?

If you, or your son or daughter, are currently applying for colleges, you live in a world of deadlines. There are ACT registration dates, SAT prep dates, application deadlines, and scholarship due dates. When you live by the calendar, it can feel like torture waiting to hear back from schools, especially your top choice. Some colleges have early decision options that help push the application and admissions process along. What is early decision? Students can elect to apply early decision to (typically) one school as early as November, and can subsequently hear back from that school in just a few weeks. There’s more to the agreement though… Let’s dig into the details to see if this application option is right for you.

What is Early Decision?

Early decision is available at many private colleges and universities, and some public schools also offer this option. Certain highly selective programs like Ivy League schools can limit students to only one early application. Through this option, prospective students submit applications in early- to mid-November and hear back as early as late-November. This notification rolls in months before you might hear back from other colleges. In a typical application timeline, students submit applications in early winter for decisions by mid- to late spring. There are two different early application windows. Early Decision I is typically in November while Early Decision II is in December or even January. If you don’t get into your Early Decision I school, you can still apply to another school’s Early Decision II deadline. Early decision can also give you an edge when it comes to acceptance rate. In 2018, colleges with early decision had an average regular acceptance rate of 50.7%, while the early decision acceptance rate was 62.3%. Colleges appear to weigh early decision applications differently since these potential students demonstrate a strong interest in their programs.

What Are the Drawbacks of Early Decision?

If you apply to a binding arrangement like early decision, you lose the opportunity to compare financial aid packages from multiple colleges. This might also impact a college’s incentive to offer you merit-based financial aid. If you already expressed excitement and interest, why would the school need to convince you to attend by offering scholarship discounts? You might even have to accept the offer before hearing from third-party scholarship organizations, affecting your ability to accurately determine if you’ll be able to afford that dream school. You can only typically reject an early decision offer if the school’s financial aid package isn’t realistic for your financial situation or if your financial situation has changed. However, if the school truly is your first choice, you can still apply for scholarships or private student loans to help bridge the gap. Finally, if you’re going to hit early decision deadlines, you need to be very organized. Submitting applications four to six months early means you also need to have application materials ready early. It’s recommended that you leave time to take the ACT and/or SAT at least twice, in case you need to boost your score. Without planning ahead, you might find yourself up against early decision deadlines. If early decision seems like an intimidating commitment, many schools also offer early action. This option allows students to apply and receive an admission decision earlier than typical decisions. But the main difference is that the option isn’t binding.

What’s The Right Choice?

Now that we’ve answered the question, “What is early decision?” the next question is whether this option is right for you. It can be tempting to want to hear back from your dream school before the holiday break hits. However, you have to consider if you’re prepared to submit your best application at such an early date. You also have to do your research regarding financial aid. There are many choices to make when applying for college. Be sure you’re aware of what your choices mean for your college career and the loans that will help you get through those four years.

2019-11-11

Avoiding Identity Theft: Student Loans Edition

Identity theft seems like something that will never happen to you, that is, until it does. And when it hits, it can cause a lot of trouble—impacting your bank accounts, credit report, taking out loans and requiring a lot of time and effort to correct. When a thief has access to your personal information, there’s no limit to the havoc they can wreak. While charges on credit cards and unauthorized bank account withdrawals are more commonly associated with identity theft, student loan fraud can happen as well. Most people know to take necessary precautions, like shredding important documents and having facial ID or passcode set on their phone, but it seems like these steps are never enough. Identity thieves can get to your information through data breaches, stolen mail, stolen wallets, email scams, and even though your internet connection. Without altogether avoiding technology or living in a vault, how cautious do you need to be? Very cautious, as it turns out. Let’s look at how to avoid identity theft, then what to do if the theft involves unauthorized student loans.

Avoiding Student Loan Identity Theft

Use Safe Internet Connections When you Cyber Monday shop in a cafe or buy Wi-Fi at 30,000 feet, you put yourself at risk for identity theft. Public Wi-Fi connections are full of fellow internet surfers, and they don’t all have good intentions. Though convenient, public Wi-Fi may not have the proper security and encryption measures in place. When a fraudster gains access to your personal information via public Wi-Fi, it’s known as a man-in-the-middle (MITM) attack. Once they’ve gained access, thieves can spy on your internet behavior and steal usernames, passwords, credit card numbers, etc. Needless to say, it’s best to avoid anything on a public network that requires you to log into accounts or make purchases. This includes applying for colleges and student loans. Be sure you’re always working from a safe, trusted internet connection and make sure your device or computer has the latest software installed. Don’t Keep Your Social Security Card in Your Wallet At some point, you’ll likely be asked to share your Social Security number at the doctor’s office, your bank, the Department of Motor Vehicles, or even your job. And because of that, it’s tempting to keep your Social Security card in your purse or wallet for easy access, but doing so can open the door to identity theft. When your SSN lives next to your credit cards and driver’s license, you give thieves everything they need to steal your identity. Instead, keep your Social Security card with other important documents in a personal safe at your house or in a rented safe deposit box at a bank or credit union. Read more about when you should and shouldn’t give out your Social Security number. Be Weary About Who You Share Information With When applying for student loans, work directly through fafsa.gov for federal loans or through reputable financial institutions for private loans. How can you tell if a site is reputable? You should be able to easily find contact information on their website and speak to a real person when you call. Reputable websites also work through encrypted connections, helping reduce the risk of identity theft by sending your data across the internet with additional layers of protection. You can tell if a website is encrypted by its web address: “HTTP” sites are not encrypted while “HTTPS” sites are. If you do find that your identity has been used to take out unauthorized student loans, the below tips can help you get back on track. Recovering from Student Loan Identity Theft If you received a call or letter from a loan servicer warning that your account is past due, despite not having a student loan with that institution, you might be the victim of identity theft. Student loan identity theft might also be discovered during a routine credit check or by a credit monitoring service. Regardless of how you find out, once you do, here’s who to contact:

Contact the lenders that opened the accounts. Their fraud departments can freeze the accounts to prevent any further damage.
Contact the Federal Trade Commission (FTC) to complete an Identity Theft Report. This report will provide a detailed recovery plan and layout the appropriate steps. It will also pre-fill forms and letters you’ll need, saving you precious time.
Contact the police and file a police report. A police report may be needed to help clear things up with lenders, credit agencies or the Department of Education.
Contact the school where the fraudulent account was opened, notify them of your incident and ask for a letter stating that the account is closed.
Contact the three major credit reporting agencies (Equifax®, Experian®, and TransUnion®) and have them place a free fraud alert on your credit report. Doing so lets each one know to take extra precaution before approving new lines of credit. You may also consider a credit freeze, which prevents any new lines of credit from opening until you have it lifted.

Keep An Eye On Things If you haven’t signed up for a credit monitoring service, now is the time. The big three reporting agencies offer these services, as do third-party platforms like Credit Karma®. You can set up alerts to be notified of any new activity tied to your personal information. If you don’t want to sign up for a service, at least do your due diligence by checking your credit frequently. You can get your credit report at no cost every 12 months from each of the main credit bureaus (Equifax, Experian, and TransUnion). Request your report at AnnualCreditReport.com. Remember, fraudsters will stop at nothing to access your personal information, and they’re good at what they do! It’s troublesome to have any aspect of life tampered with, but especially so when it comes to student loan identity theft. It pays to know ways to help protect yourself, and if the unfortunate does happen, how to begin the rebuilding process.