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FAFSA, to do or not to do
Old 10-12-2016, 10:47 AM   #1
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FAFSA, to do or not to do

With DS applying for colleges this Fall, it's time for me to figure out if it's worthwhile to submit a FAFSA application. I've filled out the estimator and our EFC is high. All we'll qualify for are unsubsidized Stafford loans, which is true when both DS and DD are attending college.

DS is applying to three schools, two in-state public universities and one Canadian university. We've committed to paying for the top in-state school and any difference he has to make up. This means if he attends the Canadian university, he'll have to pay 10k/year. We may or may not pay this for him, but if we do pay this, preferably it would be after he graduates. That's where the situation becomes a little bit more complicated.

If we don't fill out FAFSA, then how does he borrow money? And looking at Stafford loans, he'd be capped at $5,500 for the first year, which is still shy of the 10k/year difference. That means he'd somehow need to borrow $4,500 without our help, which seems unlikely.

This looks like a negative towards filling out FAFSA. It makes me wonder if we should draw up a legal document lending him the money from us? But this starts to borderline on the silly, since what if he defaults, etc. Honestly, I wish there was some way he had to borrow all the money and then we'd pay it off after he graduates, but that's wishful thinking.

So that's issue #1. The next issue are merit-based scholarships.

One interesting tidbit that I learned is that not all universities require a FAFSA to be considered for merit-based scholarships. In DS's case, his backup university does not require FAFSA. I'm pretty sure the top in-state university does require FAFSA and I have no idea on the Canadian university (still researching this part). However, the top in-state/Canadian university are competitive. DS will probably be accepted, but he'll probably be in the 60-80% range of students accepted (not in the top 10%), so the likelihood of getting a merit-based scholarship is less likely. This is where I'm 50/50 on the benefit of filling out FAFSA.

The biggest negative for filling out FAFSA is that DS is going to have visibility into our finances and I'm not sure how much I want him to know. If there's no real benefit for us filling out FAFSA, then I have an inclination to pass and figure out how to pay for college on our own.

Are there any other reasons I should consider for FAFSA?
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Old 10-12-2016, 11:06 AM   #2
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I did it... and DS got his loan...

Remember, it does not include 401(k) and IRAs... really any kind of retirement account.... so your son will not get a full picture of your finances...

Also, there are a lot of current threads talking about the same thing... do a search and read what others have posted there...
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Old 10-12-2016, 11:17 AM   #3
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I think there are two options if you're concerned about your son seeing your financial information. First, you could fill it out directly. Our kids had no interest in it so I managed the form during their college years. Second, I believe there is an option on the form to indicate parents refusal to provide financial information. I don't know if there are any additional hoops to jump through going that route. This is based on information from 3 years ago, the last time I had to fill one out.
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Old 10-13-2016, 02:45 PM   #4
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Does a Vanguard annuity get reported on a FAFSA?
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Old 10-13-2016, 05:07 PM   #5
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I did it directly and the kids had no clue not that it would've mattered.


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Old 10-14-2016, 12:21 PM   #6
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I filled out the forms for my twins knowing that they would only qualify for loans, but none of the schools would consider them for scholarships of any kind without FAFSA first. My kids never saw the forms as it was all done on-line by me, although they know my income and our financial picture in broad terms. The only thing they saw was the Expected Family Contribution on the University website.


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Old 10-16-2016, 03:37 PM   #7
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A quick question for the sages here. A fair amount of my compensation is "salary at risk". Last year (2015), company performance was not so good, so when I file taxes this year, 2016 income will be a less than 2015.

I assume I can still wait to file the FAFSA until I have completed my 2016 taxes? That is still an option, correct? Have done it previously and always filed after completing the previous years taxes.
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Old 10-16-2016, 04:27 PM   #8
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Quote:
Originally Posted by eastnortheast View Post
A quick question for the sages here. A fair amount of my compensation is "salary at risk". Last year (2015), company performance was not so good, so when I file taxes this year, 2016 income will be a less than 2015.

I assume I can still wait to file the FAFSA until I have completed my 2016 taxes? That is still an option, correct? Have done it previously and always filed after completing the previous years taxes.

IIRC, and I could be way off on this, I think you can put down what you think your tax liability will be and then correct it when your finish your return....
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Old 10-16-2016, 06:22 PM   #9
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The FAFSA for the 2017-2018 school year is based on your 2015 tax return. The procedures regarding what year is reported for the above school year has been completely revised. See: https://studentaid.ed.gov/sa/about/a.../fafsa-changes
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Old 10-17-2016, 07:37 AM   #10
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Originally Posted by RE2Boys View Post
The FAFSA for the 2017-2018 school year is based on your 2015 tax return. The procedures regarding what year is reported for the above school year has been completely revised. See: https://studentaid.ed.gov/sa/about/a.../fafsa-changes

Thanks for the update... I had read about this change but did not know it was a requirement.... I thought it was an option...
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Old 10-18-2016, 09:08 AM   #11
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Quote:
Originally Posted by Texas Proud View Post
Thanks for the update... I had read about this change but did not know it was a requirement.... I thought it was an option...
Yup, the year earlier makes a big difference. I have a 10th grader and my tax year for his freshman year FAFSA starts 1/1/17. Many people will be caught unawares and lose the opportunities (such as they may be) for planning ahead.
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