That festive FAFSA season

That festive FAFSA season

As we gather for turkey this week, let us all give thanks that we’ve made it past the Nov. 1 college early application deadline.

Yes, as the parent of a high school senior, I have experienced firsthand the season of ACT-taking, essay-writing and transcript-gathering — and one scary Halloween night watching that senior race to finish an online application by midnight that had somehow disappeared in a computer crash (only to find out the deadline was really the next night).

But the real horror came a week or so earlier, when I filled out the dreaded FAFSA.

For the uninitiated among you, FAFSA is short for Free Application for Federal Student Aid. It’s the successor to the FAF (Financial Aid Form) filled out by my parents years ago.

It’s a good thing, in theory, telling families how much they can expect to contribute to their child’s Blog Photoeducation (more than I expected) and how much help they may qualify for.

I am a higher education reporter, and I’ve written plenty of articles about college costs, financial aid and FAFSA. But filling out the 108-question form is another story.

“It’s different when you’re a parent doing this,” said Dana Kelly, chief training officer at the National Association of Financial Aid Administrators.

I should have suspected something when a colleague gave me a pep talk in advance. “It’s not that bad. It only took me about two hours. Just pour yourself a glass of wine.”

She gave me some good tips, including the fact that both parent and student need a Federal Student Aid ID before you can log in to the FAFSA website.

We dutifully created them one night in early October, and after gathering our tax returns, bank statements and other key documents we started filling out the FAFSA — checking first to make sure we could save it and finish it later.

I proudly reported this progress to my co-worker and the next weekend logged back in to complete the FAFSA — only to find no record of it.

I called the FAFSA help line. A customer service representative patiently explained that I had logged in as the parent but we had started the application under the student’s ID, as required. I quickly switched over to my son’s account and was relieved to see a prompt asking if we wanted to finish our previous application or start over.

You know where this is going.

As I was thanking the customer service rep, my hand somehow brushed the computer’s mouse pad and hit the “start over” button.

Thankfully it didn’t take too long to recreate our application, and I managed to finish it with only two more calls to the help line.

But there are a few things I wish I’d known beforehand — specifically, what counts toward your “expected family contribution” and what doesn’t.

Home mortgages
The value of the home you live in is not included in the assets you can spend on your child’s education (although vacation homes or other real estate assets are). Likewise, your mortgage and other debts are not considered in the debit column.

So if you happen to have cash sitting in a bank account or other liquid investment, or you come into a sum of money, you may want to think about paying down a large mortgage so that money isn’t counted as an asset, Kelly said — though it depends greatly on your overall financial situation.
“It really is a conversation you should have with your financial planner,” she stressed.

Retirement vs. other savings
The value of your 401(K) or 403(B) retirement savings plan isn’t counted toward your college assets; neither are annuities, pensions or life insurance.

What does count? Cash in a savings or checking account, income from any business you own, investment farms and other real estate holdings, such as a rental property or vacation home. Also: stocks, bonds, certificates of deposits, even savings bonds.

People with young children should start thinking about this now, Kelly said.

“Knowing that a mortgage doesn’t count against you, I think, is helpful information, and probably many people don’t realize that,” she said. “And it’s not a bad idea for you to put money away for retirement early on because those funds are not going to get hit hard vs. putting it into stocks and bonds that may grow very well for you, but will count when you’re trying to deal with college education.”

College savings plans
The state of Illinois’ Bright Start program and other 529 college savings plans count as parental assets. But that’s preferable to keeping the money in the student’s name, experts say.

Every dollar of savings in the student’s name reduces need-based aid by about 20 cents, while money in a parent’s account reduces aid by a maximum of 5.64 percent, according to a recent piece in Money. So it may make sense to move money from a student’s savings account into a 529 college savings plan.

It’s not too late
While experts advise filling out the FAFSA as soon after Oct. 1 as possible, to give you the best access to limited state and federal need-based grants, there’s still time and good reason to do it, Kelly said.

Most colleges use the information on the FAFSA to determine their own financial aid packages for applicants.

Some schools — higher-cost private colleges but also selective publics like Michigan and North Carolina — require a supplemental form called the CSS Profile to determine institutional need. It takes into account factors such as a home mortgage or how much debt a student’s family has, which could make a significant difference in your expected contribution, she said.

Kelly recommends that every applicant complete the FAFSA, whether or not you think you might qualify for any aid.

“Number one, you might surprise yourself. If an institution is extremely expensive, you may actually show need,” she said.

Best-case, you might qualify for grants, scholarships or subsidized loans (where the interest is paid by the government while you are in college), depending on the college, she said.

At the very least you will likely qualify for unsubsidized federal loans, which are available even to students with zero need, she said. You aren’t required to use them, but “you never know what might happen, and it’s good to have everything done in case you change your mind,” she said.


Julie Wurth blogs about kids and families and covers the University of Illinois for The-News-Gazette. Leave a comment below, or contact her at 217-351-5226, or

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