CollegeAdvisor Masterclass: College Financial Aid Overview
Financial Aid expert Frank Ranieri gives the inside scoop on how financial aid works and how to apply for the most money possible.
2022-01-16 CollegeAdvisor Masterclass: College Financial Aid Overview
[00:00:00] Hi, everyone. Welcome to CollegeAdvisor’s Master Class on college financial aid. Uh, to orient everyone with the webinar timing, we’ll start off with a presentation and then answer your questions. You can download the slides and you can start submitting your questions in the Q and a tab. Now let’s meet her.
You can introduce yourself. Hi everyone. My name is Frank Ranieri. I’m a financial aid specialist here at, uh, CollegeAdvisor. Um, I’ve been in higher education for over 10 years, um, and excited to give you guys some great information.
So now we’re going to do a quick poll just to get us started. So where, um, what step are you [00:01:00] at in the financial aid process? So having started, um, researching your options, uh, gathering your documents for your, um, paperwork, filing your.
Documents or, um, understand your offers. And while we wait for those answers to roll in, um, Frank, can you tell us a little bit about, um, some of the, um, the most important things in financial aid? Just like a quick little run through, um, number one is just getting things in on time. Um, that would be, that would be the biggest thing because sometimes with financial aid, some schools you can lose potential funding.
By submitting information late. Um, each school is going to have their own separate lists of documents that may be needed to be submitted. So it’s not always the exact same thing for every school. Um, so like for those schools, students really want to go to, it’s very important to follow up with those schools and make sure you’re logging into [00:02:00] their portal and checking the deadlines and all, all of the documents to get in because I’m dependent more than just the fast food.
So. That was not a fun process two years ago, for me, especially the CSS. Uh, so it’s looking like 47% haven’t started 33% are researching their options. 7% are doing the actual filing and 13%, the lucky ones, uh, have completed and are trying to understand. And now you can take control of this. Awesome.
Awesome. Thank you. All right. So, uh, just another breakdown of what we’ll be going over today. Um, we’re going to start talking about the federal form, the. Um, the CSS profile, which is more for institutional funding. Um, and what’s the difference between the two. Um, and then we’ll go over some questions on, cause it’s kind of a lot of information, the top portion.
And then secondly, we’ll go over some other ways of which to pay for the school, [00:03:00] um, loans, scholarships, and, and what’s an appeal and who can appeal. Um, and then we’ll wrap up with some more questions.
All right. So the FASFA itself is the federal financial aid form. This is the form that is free, and this is the form that pretty much every college is going to require. If you want to be reviewed for financial. Um, anyone who is a citizen or eligible non-citizen can fill out a FASFA, um, the eligible non-citizen or either if you carry an or a green card or permanent resident card.
Um, and that’s regardless of your parents, um, citizenship status, that’s solely based on the students. Um, you have to set up the FSA ID, which gets linked to, um, So there’s social security, um, database to say that it is your child, um, through date of birth, spelling, the name [00:04:00] correctly, and the social, um, for those families that are applying for aid for fall 2022, um, you will be submitting with your 2020 taxes.
So for example, if a student’s going to be a freshmen for fall 2022, Uh, spring 2023, you would need the 2020 taxes for sophomore year 2021. And so on. Um, it’s, what’s called prior, prior year. Um, you can link your taxes directly to the FASFA through the IRS data retrieval tool. So when you’re filling out the FASFA, there’s a link on there where you can click and go and pull your tax information directly from your federal taxes into the form.
It makes filling out the FASFA a lot more easy. Um, and it also makes verification easier, which is the last thing I have written here. Verification is a random selection where you’ll fill out your financial aid and the you’ll be selected for a process called verification in [00:05:00] which you’ll have to submit additional documents.
Typically it’s showing that your taxes were filed correctly, um, and filling out a form, breaking down the household income. Um, you know, for example, you said there was four in your household, but there was really five. You thought it was called the verification worksheet and you list everyone who is in the house, whether that’s, um, you know, mom, dad, grandfather, other children, adult children, or children who are younger than the student going to school.
Um, the next slide is the CSS program. So the CSS profile is the form that is much more in detailed. It’s a much longer form. And because they’re asking for a couple of years of information, they’re asking about more, um, asset questions. This one’s a little harder for a student to fill out on their own. Um, if a student [00:06:00] has the FASFA information and has the data retrieval and makes the Fs.
ID for a parent, they can probably get through the FASFA, but this one really needs parents supervision because it will ask things like, uh, What are, what are your retirement? Um, what’s the value of other property that you own? What’s the value of all of the assets you have as well? Um, so it’s a much more in detailed form.
Um, and the college board, um, is not for every school in the country. Most of the major private institutions will require the CSS profile. Um, as I said, it is not free. Um, it’s a $25 fee and then $16 for every school thereafter. Um, And then at the very bottom here, I have the process, uh, called the eye doc IDLC and that’s where families will upload your taxes directly to the college board’s website.
Now it does seem, sometimes it seems like [00:07:00] you’re sending in your taxes so many different times, but you have to upload the FASFA taxes through the eye doc through the data retrieval. And you have to do the eye doc for the college. Um, if a school is asking for both of those forms, um, and like I said, the eye doc has a, um, portal where you can just upload those documents, or if you have them saved as a PDF file, you can just upload, uh, taxes W2’s um, the full schedule.
So typically schools need to see the entire federal return, you know, schedule one to. Uh, if you have a schedule C schedule a, um, it’s the entire federal return. Most schools don’t require the state returns, but some, some will. Um, and that’s going back to my initial point. That’s why you want to check in on every school because some schools will have their own verification worksheet and some schools just let you use the college boards, basically.[00:08:00]
Um, and that’s again, where do you want to keep in mind that you’re getting all of your documents in a, in a timely matter, um, and the profile, once you submit it, you can’t go back and change it the fast way you can go back and update the profile. You can’t, um, same idea as, um, the FASFA. Um, you put in the schools that you’re applying to.
Um, again, if you’re put in 10 schools, you’re going to have to pay for each one of those, for the CSS profile, um,
And then, yeah, like I said, I’m getting everything submitted on time is going to be key. Um, this next page here is I just want to kind of talk about the difference between the two. Um, so the federal methodology is based on the FASFA cause that’s the federal government. It’s it’s. It’s more, um, kind of black and white, where they’re just [00:09:00] looking at income and some assets and it’s, and they come up with the estimated family contribution or the EFC.
It’s how you determine if you’re a Pell grant recipient. That’s how schools determine, um, what level of loans you can get as well. Because even though there are loans from the federal government, um, we’ll get into those later. Um, there is a need based loan and a non need-based loan. Now for the institutional methodology, that’s why the profile is required.
So a lot of schools will require the FASFA for federal regulations, but then they’re going to look at the, um, college board. Uh, profile to determine their institutional funding, meaning regardless of what the FAFSA says, when schools want to determine how they’re going to spend their money, they want to use the profile because it’s the more detailed form.
Um, if your school is not a CSS profile school, then their school will just be requiring the FASFA and it will [00:10:00] be, it will be a lot less. Um, and then that’s what the schools do internally is they’re reviewing, they’re doing their needs analysis based on again, FASFA profile, income and assets. Um, so that’s why, you know, sometimes financial aid counselors will reach out and say, Hey, we need more information on this, or can you explain why on the fence?
There’s five in the household on the profile. There’s six. Um, you know, on the FASFA, you said your savings was this amount on the profile. You said it was this. Can you give us a bit more information? Um, typically, um, the profile itself, like you can’t go back in and change it, which is what I was saying before.
So if you do make a change or if you do fill up something incorrectly and you hit submit, you’d have to reach out to each individual school and then tell that associated. Counselor or advisor, what change you made and what’s their process to update it? Because some schools I’ve worked at have said, [00:11:00] um, screenshot the page type in or hand, write in what the changes, get it to us and we’ll write.
Um, some schools will be, well, we need to see the documentation. Why did you put your savings was at a hundred thousand if it’s really time? Um, for example, um, so it’s going to be dependent on the school about how they take their changes. Um, and as far as the, when to complete the form, that’s going to be again, based on the requirements of the school, typically for regular decision, uh, applicants, the FASFA is due on February 1st.
Um, But again, schools are going to have different deadlines. Um, and when I, when you a question, families have a lot, excuse me, is why do we have to fill out the financial aid if we’re not accepted? Um, so the way schools operate is they want to have all the documentation. And so if, and when you get accepted, you can get the award package, right?
Um, again, some schools will run out of fund [00:12:00] or can potentially run out of funding if you’re late. So rather you get your documents in three months in advance or two weeks in advance. As long as you hit the deadline, you should be reviewed for the maximum amount they have based on your financial need by handing in documents late, you could, again, some schools run out of funding, so it might not be a needs analysis.
It could be. Um, your documents relate. We have to see what our budget looks like, uh, et cetera. So you can always go back. And like I said, update the FASFA. You can have conversations with the financial aid office. Don’t be afraid to reach out to them. Um, get further details, get further explanation. Um, you can reach out to us.
Uh, again, I’m a financial aid specialist here, or you can reach out to your CollegeAdvisor here. Um, About how to go about reaching out to the school and the financial aid and what questions to ask. Um, but checking in on those, especially the top five [00:13:00] schools, top six schools, a student wants to go to, you definitely want to keep in contact with that financial aid office, um, to make sure that everything that is required is.
Okay, so we’re going to take a quick pause to answer any questions you may have about the, uh, current topics that Frank has brought up. So if you have any questions, please do submit them in the Q and a tab. And while we wait for those to roll in Frank, did you want to add anything to any points that you brought up earlier?
Um, no, not necessarily. Just, um, You know, in my experience, families get quite nervous filling out the financial aid forms. Um, a lot of the verbiage, especially on the FASFA can be really scary where it’s like, you know, your penalty by law and making sure everything is correct. And it’s a federal back form.
You know, if you mess up, if you put an extra zero or a decimal in the wrong place, you can go back and up. Um, [00:14:00] you know, there’s no, you’re not going to be penalized by filling out something wrong. It just creates more paperwork. So, um, you know, just take your time when you fill them out. Both forms have a save and exit button where like, you know, if it’s too much for one night, you know, hit save.
Sleep on it and go back in the next day. Um, even with the FA the FASFA allows you to choose up to 10 schools, but once you submit it and it’s saved, you can then take schools out and put other schools in. So you’re not, you’re not allocated to just 10 applications for your FASFA. So, um, that’s, that’s a good point to remember too, because if there’s other schools you want to apply to by all means do so.
But the biggest thing is just. Take your time. You’re not going to, no, one’s going to be panelized by filling out forms wrong. Um, the schools will make sure everything is accurate, um, as, as, as, as you will do as well. So one students asking will applying to financial aid [00:15:00] affect, uh, your admissions chances.
So again, that’s, I know I sound like a bit of a broken record here, but sometimes that a lot of times that’s based on the school. So, um, some of the keywords you want to look at at your schools is a school need-blind are need aware if they are need aware. That means they may be looking at your financials at the time of admissions.
Um, uh, most schools promote trying to be need-blind. Um, as I had said before, schools become more need away. Later in the process. So if you’re filling out forms later, or if you are a wait-listed student, a lot of schools then tend to go to need aware versus need blind. Um, but that is a school by school basis.
Another student is asking which documents do we have to submit via IDRC? Is it only the. The ones that colleges request or are we supposed to just submit [00:16:00] as many as we can? So the, the eye doc has a, or the IDRC has a breakdown of the actual forms you need. Um, typically it’s the entire federal return. Um, And the W2’s and then if you have any businesses, those, those documents as well.
Um, and then, you know, sometimes, uh, a family, you know, sometimes has, uh, made very low income on like a schedule C and then a school asks for a business and then parents will reach out to say, we don’t have a business. Um, so if you look at schedule one, which is typically the third page of the 10. It’s going to have a breakdown of everything else that you may have.
And if you’re lying where it says, schedule C is blank, then there is no schedule C. So that’s kind of a good way to kind of check and balance. But the, um, once you upload documents, the eye doc will, after like three to five business days will update and say what you still need to do. Um, but [00:17:00] that’s where it’s comes in handy to go to the specific school, like a week or two after logging into your portal and see exactly what they’re saying.
Um, because again, it’s a very, um, it’s a very internal form and it’s very automated. So, you know, the automation sometimes gets things wrong or puts things in the wrong place. So that’s why you just want to make sure that you’re staying up on it. But again, typically it’s the entire federal return and W2’s, so another student is asking.
What is the criteria for aid and its amount. So I’m guessing they mean like, um, how do you determine how much aid you get? So there’s no real tear breakdown. I know some schools that are fast fall only will have a breakdown, um, where it’s like, you know, if your income is this, then maybe you get this much in institutional funding.
[00:18:00] Um, typically your state schools are going to be fast-forward. Um, but when, when, whenever I reviewed a CSS profile at the three different schools that I worked at, it was always, um, making sure the forms were accurate. And correct. And then the CSS, because it’s a third party site, they’re going to kind of punch out what your family contribution is as well as the fast with us.
Um, and those family contributions should be listed on the shopping sheet when you’re accepted. So you can actually see what the family contribution is. Sometimes if families are, you know, Working, W2’s pretty kind of straightforward Texas info like that. A lot of times the FASFA can look a lot like the profile as far as the family contribution.
Um, the profile sometimes will, um, you know, it’s, it’s more in detail. So it’s going to ask more about assets and more about, um, stocks and retirement and things [00:19:00] like that. And, um, not all schools going to look at how much you have in return. Um, but some schools actually do look at that. So, um, basically the profile is going to do its own calculation the way, the way the fast food does too.
Um, and again, schools have different ranges where if your income is above, um, like if your income’s above 300,000, then you’re probably not getting aid at even any of the Ivy league schools. And the Ivy leagues are very expensive, but they do have good institutional need packages, but once you hit certain income, uh, You know, you, you unfortunately don’t reach the need-based level of funding.
Um, but again, every school you apply to is going to have some sort of verbiage on how they, again, are. They need aware they need line. Um, you know, is there an income where if you’re below a certain amount, then you’re going to get maximum gift funding. Um, I know some of the Ivy leagues, if you’re under 60 or 65,000 as a family, you’re going to get [00:20:00] fully backed all need-based aid, filling.
You’re going to get, find your financial need failed by their funding. Um, but again, unfortunately, um, it’s going to be a school by school basis. And then our last question, before we get back into the slides and you’ll have another opportunity to, um, to get your questions answered. Um, so the students asking what kind of family income is eligible for financial.
So, um, I advise families unless, unless you know that your parents or your income is, is way out of the range of financial aid, I advise families to apply for the forms. Um, fill out the FASFA, fill out the profile. See if you were close to getting aid, have that conversation with your financial aid counselor, and then maybe year after year, you don’t fill it out, but sometimes it’s good to get the forms done.
Give them. And so that way it’s like, You know, I’ve had, I’ve had parents call me and say, well, [00:21:00] we close to getting aid. And, you know, as a counselor, I would be try and be as real as I can. And it’s like, you know, based on your income, you weren’t close. Um, but if you are on that threshold, a good thing about the profile is it does try and take into account your cost of.
Again, it doesn’t always get into the truest depiction of that, but it does take it into account where the fast doesn’t, it does protect your home as an asset. So it asks about your home value, but they’re not taking that heavily when determining. Um, because it’s considered a protected asset. If you have a real estate outside of the home that you’re living in, then that can be, that can be graded heavier for lack of a better term, um, as far as your, your assets.
Um, so there is no, there is no, if you, if, if you make this, you’re getting this amount of grant funding because every school is different. But if you are, as a family is above 300, a thousand for income, it is going to be tough to get any need based. [00:22:00] And even with, um, from what I’ve seen with my clients in applying, um, HBCUs tend to use FAFSA and some other, um, merit based, um, financial aid schools.
Um, and even though they’re merit based, they still look at your FAFSA just to see how much the government is going to give you before, determining how much they’re actually going to give you. And some schools want to see the FASFA before. Just in general before they review for merit. It’s not, it might not, it might not hinder your acceptance, but they, some schools will look at it as well.
If they aren’t applying for the FAFSA, do they not need the extra funding? So sometimes it’s good to get the FASFA and if, if nothing else, because again, it is free, but yeah. Good point. Good point there. Yes. And that was the last question. So you go back. All right. All right. I’m back up. All right. All right.
So now I just have some information on loans. Um, the top portion of the [00:23:00] federal loans can be found right on the same website where the FASFA is it’s student aid.gov. And these are the interest rates for the current academic year. Typically these get updated every like June or July. Um, they haven’t changed in a couple of years.
I’m sure it had some to do with the pandemic as well. Um, But, uh, to my point earlier, um, a subsidized loan, there is no interest accumulating while the student is in school and un-subsidized is going to be gaining interest at all times. So technically the subsidized loan is based on your financial need, because if your FASFA, if their family contribution is greater than the cost of a school, then you would not be eligible for a subsidized loan.
Um, every, every student. Regardless of finances will be eligible for an unsubsidized loan because that’s the interest bearing loan.
[00:24:00] Um, and there is no additional application to fill out a. To get the federal loans by doing the fast fund, being a citizen or an eligible non-citizen, you’re automatically eligible for loans. It’s just a matter of again, are you going to, are you eligible for the subsidize or will they be the un-subsidized?
Um, their interest rates are fixed. So the interest rate they, you sign up for them will be the interest rate the entire time you’re paying them back. Um, The next portion on here is the federal parent loans, um, where this is going to be based on an actual application and credit check from your parents who would then be the, um, the line of credit holders for the parent loan.
Um, this long can never be changed into the student’s name, nor can the direct loans be switched into the parent’s name. Um, if a parent does not have the ability to. [00:25:00] Get approved for a plus loan. Um, students actually are eligible for an additional un-subsidized loan or a parent can look for a co-signer to get a loan.
Um, again, these are both federally backed loans and then the other option is a private loan when a private loan, 99 times out of a hundred for incoming freshmen, they’re going to need a co-signer because typically freshmen in college don’t have. Uh, established credit. So it doesn’t need to be a parent who is the co-signer, but it does have to be someone with established credit.
Who’s willing to, you know, back the loan, uh, for you. Um, the better the person, the co-signer inter uh, credit is the better their interest rate will be. Um, private loans can be taken out from a number of different avenues, you know, there’s. There’s your major lenders and I’m sure everyone’s heard of in the past, or, you know, your Sallie Mae is Wells Fargo and [00:26:00] beyond great lakes.
Um, in addition to those, you know, you may want to check out a local credit union, um, or local banks that you’ve done you or your parents have done business with. Again, that’s if you go down the private loan. Way to pay, um, uh, the preferred lender lists that I have questioned they’re at the bottom. A lot of schools will have some sort of lender list, um, on there.
So it’s a good starting spot where you can say, okay, so they’ve used this lender before. They’ll sometimes do a breakdown of. What the potential interest rates can be. Um, you definitely want to pay attention to a fixed versus a variable interest rate, a fixed rate, uh, similar to the federal is going to be the same interest day.
One is while you pay on it, a variable industry. Changes over time and kind of moves with the market. So the, a variable interest rate can have really low interest rates, but it can also spike up. So, uh, I [00:27:00] advise trying to look for a fixed interest rate, um, and less and less, it’s a really high number. Um, but the private loans are going to be a much higher, uh, uh, interest rate than any of the.
Um, scholarships. So applying for scholarships, um, really the responsibility falls on the student for outside scholarships. Rather, they’re going to be. Reviewing you based on your merit or extracurricular or your study, your field of study, um, the student needs to look for them and apply for them. Um, some websites that we’ve, that we’ve found good scholarship information on are the three I’ve put here.
Um, it’s a lot to kind of decipher through because there is a lot of scholarships out there, but there’s also some bad information out there. [00:28:00] Um, and scholarships have to be applied for, you have to write an essay and it’s a lot of, kind of waiting around to hear, and it can get discouraging, but you know, any small, even a smaller scholarship is okay.
Um, again, you want it based on your own background or gender accomplishment, are you a first generation, um, you know, applying for scholarships within your field of study, if you volunteered anywhere. Um, you’ve worked for a nonprofit, um, speak to those avenues because sometimes these nonprofits will have scholarships that they’re looking to give away.
You just have to apply for it. Um, you definitely don’t want to just stop after your freshman year. Students should always be paying attention to scholarships and always be applying. Um, there are a number of outside scholarships that will say, you know, once you’ve completed 24 credits. And on X, Y, and Z, then you can apply for those scholarships.[00:29:00]
Um, so the more you apply for the better chance you have of getting them in my experience, I’ve seen a lot of students get scholarships, but they’re, they tend to be. Smaller. Now, when I say smaller, I say, you know, it’s to get an outside scholarship that covers 20 to $40,000 is very rare. They are out there, but what I’ve seen a number of students do is maybe they get six or seven scholarships that are between $505,000.
And all that little bit adds up, even if it’s just covering books, um, covers a meal plan for a semester, um, you know, Puts extra, extra time for you to find a job. If you have the tuition paid and you can use your work study job to kind of for your own personal expenses versus paying back the school tuition.
So, um, the more scholarship you apply to the better, a lot of times, um, these scholarships or [00:30:00] scholarships companies will also have internships that you can apply for too. So by looking for these scholarships within your field is a good starting spot for that.
All right appeal. So this is after you get accepted and you get your award letter again for regular decisions. Typically schools are notifying families and like late March. Um, and then you have until May 1st to make it. So when you get those number of acceptance letters with the financial aid package, you really want to, you know, I am envisioned laying them all out or, you know, pulling them all up on your desktop.
And here are the schools. Here’s what it costs. Here’s what it’s worth for me to go to this school. Um, every school is going to have some sort of appeal, process or appeal form, um, the easiest way to get an appeal approved or at least get a review is if income went down. [00:31:00] So. The forms for this year are based on 2020.
Now the 2021 year just ended, um, 20, 21, excuse me, just ended, you know, 16 days ago. So if you file your 2021 Texas, and the income is down 10, 20,000, it’s worth it to reach out to that financial aid office, let them know and find out what their process is to appeal. Um, April is a very busy time in financial aid world and the financial aid offices, and they get very busy.
But still, if you can get someone on the phone, if you can appeal, especially if it’s an income change, you that’s the time to do it. Um, because basically that’s what April is for the financial aid office. They’re answering calls, they’re explaining award letters and they’re reviewing appeals. Um, and again, most schools are gonna have an appeal letter on, on file.
Whereas those here are some appealable circumstances. Here are some that are. Um, you know, if [00:32:00] there was a natural disaster, um, that’s a reason for appeal. If there was, you know, your parents have a very old roof on their house and they had to get it fixed and their savings was the. That’s a reason to appeal again, it doesn’t mean you’ll get approved, but you can say, Hey, we had 50,000 in savings that went to our brand, our, our new, um, we had to redo the basement because of flooding.
Um, they should be able to take that amount out or at least lower it because financial aid officers can. Update the forms by what’s called a professional judgment. They just have to have the backing in order to do so. Sometimes it’s writing a letter explaining your situation. Sometimes it’s getting in the, uh, the newest year’s taxes, um, you know, medical bills.
Um, the profile does ask for, um, what medical bills you have. And if you have medical bills after insurance, that you didn’t put on the profile up front, you want to reach out to schools and say, [00:33:00] What, whatever the situation is, you let them know, Hey, my 2021 income was lower than 2020. Um, you know, I, I hurt myself and was in the hospital for two weeks and I couldn’t work.
Um, after insurance, I ended up paying $10,000 in hospital bills. These are all things that they should be able to take into account. Um, a lot of them, a lot of financial aid offices will have like appeal, review or appeal committees where it’s essentially the financial aid office is looking at your situation on a case-by-case basis to see if you’re, if you should get more funding.
Um, again, the schools I’ve worked for most schools out there they’re going to, as long as you can back up this, this situation that you’re going through, they should be willing to help you. Because again, Something’s changed in your life that made your finances not be where they were the year prior. Um, and again, you know, [00:34:00] loss of job is a big one.
Like, um, if you lost your job in 2021, but you’ve got like a severance package and your 2021 income is higher than you’re used to. Um, you can give them a breakdown of. What your estimated earnings are going to be for like 20, 22. So even though, even if you lost your job tomorrow, you can still appeal based on losing that job.
Um, schools will collect things like your last pay stub, document, termination documentation. Um, are you on unemployment? And this is where schools will have different rules. Some schools will say you have to wait 90 days after you lost your job. Some will say, get us this information, right. Um, some schools will kind of take you at your word that year and you know, they re review it the next year.
Some schools will, if you’re reviewing telling a school, Hey, my 2022 income is going to be 50,000. By the time 20, 22 ends, some schools will require you to send in your [00:35:00] taxes and say, well, it looks like it was only 30,000 last or, or what have you. So each school is going to have their own individual basis on how they do appeals.
Again, some schools just simply don’t have the funding to offer more, uh, based on budget constraints and things like that. Again, for schools that are trying to meet your full financial need or meet, most of it are going to take into account your appeals. Um, and April is crazy in financial aid offices for appeals and reviewing the award letters and things like that.
Um, and again, going back to one of my very first points. If you get accepted in late March and you don’t have an award letter, that means you still need to get documents. And so instead of appealing your financial aid or getting a true estimate, what’s going to cost you. You’re still waiting for your financial aid.
Would the May 1st deadline looming. So very important to get the documents and by the deadlines that they are, that they require.
And then my [00:36:00] last point on this slide was the, had the new year. Taxes filed ASAP. Right? So 2021 just came to a close here. The sooner you can get those taxes filed in case there’s an appeal basis, or you want to get ahead of the game for sophomore year while your students are in college. It’s a good thing to file your taxes right away.
If you have. Cause sometimes there’ll be some schools won’t do appeals. If your taxes aren’t filed where it’s like, well, my 20, 21 I’m on extension, but it’s like, Hey, if you, if your 2021 income is that much lower, we need to see those actual returns. So some schools will process the appeal until the taxes are.
Okay. So now we’re going back into the Q and a, and the rest of the webinar is going to be a Q and a. And remember that you can download the slides from the handouts tab, and you can also watch this webinar. Um, if you go to CollegeAdvisor.com and go to the webinars page, or if [00:37:00] you have an account under the CollegeAdvisor’s, um, new portal, Um, you can also watch it there once it’s uploaded in case you want it to get back into, um, review this information later.
Um, so yeah, now just start submitting your questions in the Q and a tab and we will get to them as soon as possible. And so our first question is asking, um, should a parent do a home equity loan instead of another type of loan? So the home equity loan. Is is, is a valid option, in my opinion. Um, I would do that before.
If you pull out of retirement, you have to claim it as income. Um, And a lot of times schools will like, that’s an, that’s an appeal basis too. Like I pulled money out of my retirement. It made my income higher than it actually is. Here’s what my actual income usually is. So typically schools will be [00:38:00] good about, um, doing an appeal for that, but not always, um, again, my role when I was, when I’m in a financial aid office or here talking to you all, it’s about kind of getting.
All the options. And then the families kind of make the best decision for them. The home equity loan, uh, line home equity loan is a good option because, um, you know, you, you already have the credit there and it can even make it look like the, you have less equity in your home because on the profile they’re going to ask for what’s the value and what your debt on the home.
So if you take out a line of credit, it’s actually going to. You’re going to have less equity in your, um, in your house at that time. So that actually could bode well for your, um, needs analysis. Um, but again, you definitely want to look into the interest rates because typically right now, a home equity line would be a [00:39:00] lower interest rate, but.
No, it’s definitely something to look into all, all options. So look into that, look into the private loans, um, look into the parent loan and whatever interest rate is best and whatever works best for you as a family. Um, go with that. And I just wanted to clear up something that I typed in the chat earlier.
Um, biological males no longer needs to sign up or register for the selective service in order to get, um, federal aid anymore. They can’t, they stopped doing that last year. I believe it said. Um, so now, um, you can just, um, opt out of it. It will still pop up on FAFSA, but you can just opt out, so it’s no longer required.
And so, yeah, going back to the Q and a. When should one start filing forms, uh, during the student’s senior year or, um, can you do it earlier or later? So I believe the FASFA each year is available on October 1st. And the profile I think is November 1st. So, um, [00:40:00] regardless of what year the student is rather it’s a senior in high school or, you know, a returning junior in college.
You know, after November 1st, you can get both forms done that early and just get them out of the way we used to advise and remind our families to do them over winter break. Uh, this is more for like continuing students, cause it’s like, Hey, your forms are available. Now you’re going to be home. You’re going to see your parents get the forms done.
So that way, um, you know, you’re not missing anything at the schools I worked for. We usually had deadlines like May 1st or June 1st or even mid April for. Continuing students aid. Um, but yeah, as early as October 1st for the FASFA, and then depending on the deadlines for your schools, when you want to get them submitted, Yes.
And having to resubmit the forms every year is the biggest catch a financial aid. I’m having to do it this week before I go back up to school. Um, and then some schools [00:41:00] require you just to resubmit FAFSA, like Cornell other schools. You have to redo FAFSA and CSS profile. And I’m so glad I don’t have to do that again.
Um, So another student’s asking, um, which savings account is better for the EFC Custodio or the five to nine.
So the 5 29 is going to be reported as an asset. Um, it’s going to say something like investments in the student’s name or your name for the student, and then there’s a spot where you have to put it in. Literally one of those spots, so was checking savings and like literally the money in your wallet is what there is, how they’re framing it.
Um, the 5 29 is not going to be graded as heavy as cash on hand because cash on hand is going to be a greater asset than the 5 29, um, both savings and 5 29 as they go down your financial need eligibility should go up. If everything else does stay the same, um, [00:42:00] So, you know, some families ask that I use all my 5 29 year one, or do I use, or if I have 40,000, do I put 10 every year?
Technically, if you use it all up in the first year, you would have more need later. But for planning purposes, that can be kind of scary. But every year you have to fill out the forms, um, and every year your need is going to be reviewed. So if your income stays pretty steady year over year, You know, then maybe you would want to use up the 5 29 first if you have a sales job or, you know, you’re in real estate or what have you, and you’re in your income fluctuates, you know, you may want to have that 5 29 have that little bit every year.
So at least, you know, you at least have that. Um, again, it does come down to kind of what’s best for the, for the family and, and how they want to kind of handle their savings and paying for it. Cause the 5 29 is nice because like they’ll send the money directly to the school. So. It is a bit more automated and can be easier as far as our money’s [00:43:00] coming from here.
Now that makes our bill this, um, and then kind of plan for it that way. Um, and then, uh, there is, there is a, there is a billing, um, you can pay monthly for school too. So if you can’t pay a lump sum and you don’t want to do a launch, but you can pay monthly schools will have monthly payment plans. And even though your bill is not covered in full, as long as you’re making the payments every month, kind of like the credit.
Um, then you’ll be in good standing financially. I forgot to mention that with one of my slides and a follow-up question to that before we do a quick offer, um, they’re asking, does it make sense to start the five to nine now? Or is it too late? Um, that’s a good question. I don’t see why it would be too late, but it is.
Because essentially you’re putting it aside as, as an investment to grow the money faster. So there’s going to be less time to grow that said money. So it’s [00:44:00] probably, I don’t think if a student is thought to be a freshman in college, it’s probably too late because the idea is to put that money away and, you know, let a gain money through the market and things like that.
So it probably is too late. Um, but it can’t hurt this, reach out to someone and. How their 5 29 works specifically. So, um, I, I would think it might be too late, but to be honest, I’m actually not sure. So sorry about that. Um,
Oh, okay. Uh, one to work one-on-one with an advisor from our team of over 200 plus advisors and admissions officers sign up for a free consultation with us by going to CollegeAdvisor.com and clicking the green chat button in the bottom right of this screen from there, just write in consultation and a live team member will get back to you to help coordinate your free consultation with us.
Also at the end of this webinar, you’ll automatically. I sent a, um, a simple form to just fill out [00:45:00] your information. And if you fill that information out, um, a member from our team will reach out to you in order to schedule a meeting, um, to get, um, to get you signed up for CollegeAdvisor, and you can find out more information about our packages and what we offer through that.
But some of the things about CollegeAdvisor that are great is our advising team to really help you throughout the admissions process, but even better. We now have a financial aid team, but you can schedule a meeting with, through your advisor. And if you’re already in CollegeAdvisor, you can do this. Um, you can schedule a meeting through your advisor with the financial aid team and they can help look over your financial aid award or figure out a plan for you specifically.
And you can get that one-on-one time and really get your questions. And. And now back to the Q and a. So, um, another student is asking, do merit based scholarships from schools follow the same procedure. So like having to fill out all these documents and do all this extra stuff in order to [00:46:00] get, um, merit based scholarships.
So for merit scholarships that are determined by each school, by the admissions office, typically those are going to be not financial related. They’re strictly off. High school, merit extracurriculars, standardized tests, things like that. Once awarded the schools want to let you know what you need to do in order to keep that typically it’s keeping a certain GPA.
Sometimes it’s doing something within that field on campus. Um, but the merit scholarships really do not tie into financial. So if a school is awarding a merit, it’s because of your, something you did in high school to get approved. And you just had to keep a certain GPA. Um, and again, some schools will have different stipulations for that, but if a student gets a merit scholarship and you guys aren’t eligible for need-based funding, as long as the GPA is kept, they’ll keep the merit scholarship going forward.
Um, and then I see the payment plan question here. [00:47:00] So, um, So, yeah, so there’s, there’s two, you can get on a payment plan to pay the school tuition. You can also get on a payment plan to pay off the loan. So if you’re taking out a loan to pay, to cover the bill, um, depending on the type of loan, it is depends on if you have to start paying on it right away.
Um, the federal loans and the student’s names, you don’t have to take, start paying them back, but you can, um, you can’t do a monthly, you can’t get on a set payment plan for the federal loans and the student’s name, but you can contact the lender and pay money towards it. Monthly, if you want, it just wouldn’t be automated, um, for a parent loan or the private loan.
Um, yes, you can start paying those right away. You can get on a payment plan right away. Pay those off as quickly as you can, or, you know, if you just want to put some money there just to cover the interest while in school, um, you’re certainly allowed and eligible to do that. Um, and all of the [00:48:00] loans there is no, um, early payment fee either.
Would the federal loans. Um, and on that note of I’ve actually gotten loans on my financial aid and I know I want to start paying them back, um, sooner. Um, just so it doesn’t catch up to me. How exactly do I start paying for them? Cause now it’s just trying to feel like I’m filling out forms and they just sort of disappeared.
So there’s a website that’s called an S L D. Dot ed dot jog. And I can put this in the chat, right?
So this website, um, I don’t know why I did it all caps, but I did, um, this website, um, you log in with like your date of birth and your social, and it will show you all the loans. Federal loans only. So any private loans would not be there. It even lists the parent [00:49:00] loans that your parent take took out in your name, but it doesn’t get added to your total costs there.
So this website is great because it’s going to show all of your lenders in this day and age. Um, everyone, like all of your federal loans should have the same lender. When I graduated college, I had like 12 different lenders because that was before the government stepped in and kind of regulated. Um, so you can go there.
You can see what your oldest loan is. You can see which loans gaining interest, which one isn’t in your case. I would advise to your oldest un-subsidized loan. If you can pay anything on that, now it’s going to help you because that is an interest bearing loan. Um, so I know it show you each loan would be broken down.
Like here was your loan freshman year. Here’s the balance. Here’s how much interest has been gaining. And then it will be like, it’ll be individual kind of tiers and then it will be a total at the top. Um, but that’s a really good website for your loans. Thank you. Cause I’m, I’m just ignoring [00:50:00] it until it becomes a problem.
So another student is asking, uh, can money in five to nines, be used to pay off the loan and still be tax-free. So that’s going to be dependent on. The holder of the 5 29, where that, where the issue, the money to, in most cases, I don’t think they’ll allow you to use it to pay off loans, but I’m not positive.
Um, you would want to contact whoever your 5 29 is with and see if they could, if they can release it in that way. Um, but my, my initial reaction is I don’t believe so, but I could be wrong. So, um, with a grain of salt, Yes. So, um, okay. While we wait for some more questions to roll in, is there anything about, um, financial aid, whether applying or when you’re actually in college, like any like tips or tricks or anything that you think [00:51:00] students should know?
Um, I mean the financial aid offices on campus are there for a reason. And while they get inundated with processing and documents, um, They’re they’re still there for you, right? Like you’re, you’re paying to go to school. Um, there’s people in the financial aid office, if you don’t understand something on the award letter, the bill, um, you know, even though financial aid officers don’t place you in a work-study job, that’s where you can see how much funding you’ll have, uh, to potentially get a work study job.
Um, you know, just use, use the avenue. Uh, you have, um, while you’re in school, you know, these financial aid officers should be able to help you and answer questions. Um, that’s a big one. And like I said, just staying on those portals and making sure everything is, and in a timely matter is going to be huge.
And in my freshman year, I, um, I reached out to the financial aid office and they were able to get me a form [00:52:00] and like two seconds to get a student contribution knocked out. So really making friends with the financial aid office is a good thing. And then also if you are on federal work study, um, and you, this isn’t better if you live off campus or if you don’t have a meal plan, but you are eligible in most states, I believe, um, for food stamps.
So that does come in handy, especially if they’re living in your own apart.
Oh, that’s a good point too. You actually reminded me of something. Another one is, um, even like most schools or your major schools where you live on campus freshman year, you have to pick a meal plan, but you don’t have to pick the most expensive. And you can always go up in a meal plan, but you can’t always go down.
It’s kind of like a sales thing, but, um, you know, you may want to start with a lower, um, lower meal plan. Again, it might only be say, it’ll be saving you a few hundred dollars each semester, but again, that can, that can go a long way. Um, just, but [00:53:00] again, You know, just really getting to know, not only the financial aid office, but just the financial aid, your entire billing portal on whatever school you go to, because there’s gonna be a lot of information readily available online for you.
And so we have about seven minutes left in the webinars. So if anyone wants any additional questions answered, please add them to the chat now. Um, okay. Uh, our parents’ retirement accounts counted as part of the estimated family contribution. Most schools know, um, the profile asks for what your actual retirement is.
Um, and I, and I’ve heard different reasons for why it’s on there. Um, again, the CSS profile is a third party website where, um, there might just be one school out there that wants to use as your retirement. So there are schools out there that may take a look at your retirement and say, okay, they have a lot of money set [00:54:00] aside.
Maybe that will negatively affect their family contribution. In most cases, that’s not the, that’s not the case. It’s because retirement is there for retirement. Um, any untaxed income, like on your W2 that goes directly into your retirement, that is your, that is on tax income that you earn. So schools will look at that portion, like, you know, $20,000 of your paycheck went into your retirement as untaxed income.
That would be. That goes back into your income as part of your needs analysis. But the entire retirement typically is not, is not looked at, um, only if it’s really, really high astronomically high amount. Would it ever really be counted in my experience, but again, some schools, some schools may look at it heavier, but none that I’ve ever worked with or, or, or heard of.
And just to wrap up the webinar. Um, is there any last advice, especially for families that may feel like [00:55:00] they are going to have trouble with, um, finance in college or worried about the cost? Is there any last minute advice you’d want to get them? Well, there’s one more question, actually. Sorry. Uh, do these forms consider liabilities like high property tax and income tax?
So the CSS profile tries to take in some of that stuff, but, you know, um, the CSS profile tries to take into account, not only property tax income tax, state tax. It also tries to take into account the cost of living, as I said, but it doesn’t do the best job of it if I’m being honest, because you know, there’s certain parts of the country where.
$50,000 goes a lot farther in some parts of the country versus others. So, unfortunately it’s not an exact science, but that’s what the profile’s trying to do is trying to take into account. What other bills you have? Like, are you, you know, are [00:56:00] you have, you have a few kids at home, you have a kid in college.
What’s, what’s like a fair estimate for your needs analysis. So the profile is trying to encompass all of that. Calculating a financial need, but it is not an exact science, unfortunately. And yes. So it’s looking like there are no more questions. So yet any last minute advice you’d want to give, just, you know, um, just don’t put so much pressure on yourself to get it done in one sitting.
Um, if a question doesn’t make sense, go back to it. Um, yeah. You can reach out to, to us. If, if you take on our service, you know, you can reach out to your financial aid counselor. Um, you know, so, so just try not to let it get overwhelmed, try not to let it overwhelm you because it is very stressful. We are talking about money and the next four years, but, uh, you know, if you do something incorrectly, you’re not going to be penalize.
It just [00:57:00] creates more paperwork. Um, and then just watch out for those deadlines. Yes. So thank you everyone for coming out and thank you to our panelists sprang for all this wonderful information about financial aid. I hope you found this information helpful and remember that you can, Donald the sides in the link in the handouts tab, and this webinar is being recorded.
So you can watch it at a later time. And here is the rest of our January series, um, with the theme of new year, new you and figuring out this admissions process, since a lot of you are. Starting out, or this is all new to you. So there will be more webinars, um, and some private webinars. If you’re already affiliated with CollegeAdvisor where you can get your questions answered, you can find out disparate aspects of the, um, financial aid process or other, um, parts of the application process.
Uh, and yeah. So thank you everyone for coming out and goodnight.