Any good reasons to file - or not file - FAFSA?

[Curmudgeon]

My daughter is a HS senior and will be attending college next fall. Unlike my son, who managed to get himself a free ride, I don't see any merit scholarships coming down the road for her. The FAFSA for 2018-2019 is based upon the 2016 tax year. I FIRED in mid-2016, and my income that year was fairly high, so there's no way she is going to get any need-based aid. So, it looks as though my daughter will be depending on loans - either from us, or others.

Are there any good reasons for me to file, or not to file, the FAFSA? Filing it would open the door to some non-subsidized Stafford loans, which currently cost 4.45%, with interest accruing from day 1. Not sure I like that interest rate; I would probably just loan her the money myself and maybe be generous on the interest as a gift. Other than the Stafford, I can't see any reason to file the FAFSA - it just opens up my personal finances (income and assets) to a list of third parties.

Any thoughts, from those who have been through this process?

[Oh, for the acronym-haters : FAFSA is Free Application for Federal Student Aid, the form college students fill out to get need-based financing for college.]

 

[tulak]

We chose not to file last year for DS who is a freshman this year. We will also pass on filing next year for DD.

If you don’t expect to get anything, why bother?

DS still received a small merit scholarship. Some schools might require FAFSA in order to qualify for any scholarship, so that’s one thing to consider. Fortunately for us that wasn’t the case for DS.

I remember looking over the terms for borrowing money and I wasn’t impressed. But this is another issue we don’t have to worry about.

Of course, a lot of this depends on your own situation.

 

[cathy63]

We filed the first year. It was a lot of work and the loan rates weren't even as low as we could have gotten at the local bank. We never bothered again.

 

[jesaco]

Son is also in his senior year in HS and will be going to college for 2018-2019 year. FAFSA is filed every year. We filed one even though we are not eligible for any federal aid. ( i retired in 2016).

During college open houses and tours, we were always informed to send the FAFSA with the the college application so we decided to fill one up. I believe they use it to see if they can give any merit aid or scholarships from the school.

anyway, we do not intent on him getting any student loans if possible. Never knew that applying for college can be so stressful...for the student and to the parents too.

 

[pb4uski]

We didn't file. It was obvious that we would not get any aid given our income and net assets and I was unwilling to "open the kimono" fof our financesto a bunch of government bureaucrats. DW and DD were upset but I held fast. As it turns out DD got a partial scholarship (effectively an annual discount of tuition) to entice her to select that school and it worked out fine.

 

[jazz4cash]

Been awhile since I was in that boat. You really have to run the numbers to see if there is any benefit. Having another child in college should help even with his free ride. You could qualify for a subsidized loan (no interest while in school) but the rates could still be high relative to other lenders like cathy63 noted.

 

[almosttime]

Sss

 

[almosttime]

We filed with both kids. Both private universities. DS was given very nice aid, and loans. We accepted the aid and the subsidized loans only. He was able to pay them off before the grace period ended (free money!!). With DD, we filed an appeal after a layoff and were pleasantly surprised. Wondering if you can file an appeal, utilizing current year retirement status. Additionally, Qualified retirement plans are not reportable on FAFSA, nor is home equity and a bunch of other stuff.

 

[MarieIG]

Did not bother. There is no way we would have qualified. Paid cash, State schools.

 

[Travelfreek]

We filed and our kids received merit based scholarships. We were offered loans but didn't have to go that route. We budgeted in advance and cash flowed the rest! Our kids took part time jobs in college for their gas money and fun money!

 

[Philliefan33]

DD1 went to a private college, which required us to file FAFSA in year one in order for her to be considered for college-funded merit scholarships. She was awarded half tuition, and was not required to file the FAFSA to keep that award (so we didn't bother after the first time).

DD2 went to a state university that did not require a FAFSA, so we never filed one for her.

The one time we filed the FAFSA, our EFC (expected family contribution) was 99K per year. Obviously there would be no need-based aid coming our way. If you are in a similar position, the only reason to file FAFSA would be if it is necessary to be considered for school-provided awards.

 

[Aiming_4_55]

No direct experience yet as kids are not old enough to attend.

Through some previously reading, if your kid(s) want on campus part time work, a FAFSA might be required. Not sure if this is school specific.

 

[rodi]

We will likely be filing FAFSA next year. We are being careful with our actions this year... Like no roth conversions.

Fortunately from a FAFSA perspective we're low income ish. Also most of our savings and investments are in retirement accounts. That helps. Our biggest asset, our home, doesn't count against us, but our granny flat does.

We met last week with a free non profit that helps folks figure out FAFSA and the EFC. Among the data they gave us was a list of colleges that offer more aid than others. Some of the pricey private schools are known for offering a lot of aid.

There group we met with are Hefar.org. They operate in San Diego and Phoenix. They are tied to financial planners but I declined that part of their service and they didn't push.

 

[PatrickA5]

We applied our first year for DS. The expected contribution from us, according to FAFSA, was over $90K. Full year, full cost to the state university he is going to is only $20K. I kept expecting FAFSA to send me a bill for the $70K we owed them. Anyway, haven't filed since.

To OP, if your 2017 or 2018 financial information is way lower than 2016, you can call the school financial aid dept and plead your case. My DS's girlfriend did that and came out with a nice grant, even though she didn't qualify using 2016 information.

 

[athena53]

DS started college in 2003. Before that I got on Princeton's site and ran a calculator that determined that not only could I afford to put one kid through Princeton with no help- I could afford to put TWO kids through Princeton. Yeah, right.


I was really annoyed with KU (University of Kansas)- we lived in NJ but I was moving to KS for a new job and I bared my soul by sending in the offer letter with DS' application since the instructions said they'd treat an applicant as in-state with that info. They accepted him but the acceptance letter said he was out-of-state. I knew I could fight it but he went to Drake in Des Moines instead.

Never filed FAFSA and put DS through with no financial aid.

 

[mrfeh]

Any thoughts, from those who have been through this process?

We are in the same boat (child is HS senior). We also knew we would get no need-based aid due to our investments.

We still filed the FAFSA, primarily because a couple schools use that data for other purposes. It shouldn't work that way, but it does, unfortunately.

 

[cathy63]

No direct experience yet as kids are not old enough to attend.

Through some previously reading, if your kid(s) want on campus part time work, a FAFSA might be required. Not sure if this is school specific.

Yes, at all the public schools we looked at, you have to file a FAFSA that shows a financial need in order for your kid to be eligible for an on campus job. If your FAFSA shows your expected contribution being in excess of the cost of attending, then your kid cannot have a part-time campus job in any area that does not require a special qualification or skill (e.g. food service, libraries, offices, computer labs, etc) as those are reserved entirely for the work-study students.

Our DD did have on campus jobs in a biology lab and an herbarium once she had taken enough courses in her major to have the necessary qualifications. A friend's son was able to get a job driving the shuttle buses around campus because the position required a commercial drivers license, so it was considered a skilled position and not reserved for work-study.

 

[Curmudgeon]

We still filed the FAFSA, primarily because a couple schools use that data for other purposes.

"Other purposes"? Like, purposes that would favor me, or purposes that I would be opposed to?

 

[mrfeh]

"Other purposes"? Like, purposes that would favor me, or purposes that I would be opposed to?

You'd have to ask the individual schools that your child is applying to. A couple of examples have been provided in other replies.

 

[Curmudgeon]

OP here. Some time back I looked up the FAFSA calculations and walked through them manually. I think our EFC was somewhere in the 80K-100K range, so no aid for us. Among other things, it expected me to contribute something like 6% of my savings - per year, per child - to fund education. That would drain nearly 50% of my non-retirement life savings! And, that is on top of some percentage of my income. I'll be low-income for 2017, but my savings will still put me in a high EFC range.

So, my daughter is pushing me to fill out FAFSA (because EVERYONE - school counselors, teachers, college reps, etc. are pushing her hard for it) but, I'm afraid I'll have to tell her no. No upside that I can see.

 

[eastnortheast]

OP here. Some time back I looked up the FAFSA calculations and walked through them manually. I think our EFC was somewhere in the 80K-100K range, so no aid for us. Among other things, it expected me to contribute something like 6% of my savings - per year, per child - to fund education. That would drain nearly 50% of my non-retirement life savings! And, that is on top of some percentage of my income. I'll be low-income for 2017, but my savings will still put me in a high EFC range.

So, my daughter is pushing me to fill out FAFSA (because EVERYONE - school counselors, teachers, college reps, etc. are pushing her hard for it) but, I'm afraid I'll have to tell her no. No upside that I can see.

Most schools will allow you for file a psuedo amended FAFSA if you have exceptional circumstances (e.g. FAFSA is based on 2016 tax filing, but your 2017 income was at least 30% lower). You have to file the "original" first and it is generally not until late spring that they allow you to file an amendment.

 

[gayl]

His school required FAFSA to figure scholarship. .... not sure why. This year he took the subsidized loan ($4500) as he wanted to live off campus (junior -- dorm appt covered 1st 2 yrs). FWIW he will run short in December so it should be interesting when it hits him. Will be fine once January funds hit but great life lessons can be learned off campus as well!! (yes, chipping in his rent that month )

But to OP: if after running the numbers it looks like you're not going to get any benefit and your daughter is not going to get a merit scholarship, then yeah why bother doing it?

 

[Travelfreek]

To apply for merit-based financial aid from the college, most colleges will automatically consider students for such scholarships based on the application for admissions. Some colleges also require a Fafsa for merit-based aid.

I found the nugget above on a website giving parents tips. I know our kids college (State University in California) had many merit based (GPA and essay required) scholarships that were available from their own website and they each required the FAFSA as well.

 

[gayl]

To apply for merit-based financial aid from the college, most colleges will automatically consider students for such scholarships based on the application for admissions. Some colleges also require a Fafsa for merit-based aid.

I found the nugget above on a website giving parents tips. I know our kids college (State University in California) had many merit based (GPA and essay required) scholarships that were available from their own website and they each required the FAFSA as well.

so I stand corrected! Also CSU

It's relatively easy as you can import tax returns

 

[ncbill]

didn't file for any kid, as our savings also raises our EFC too high to bother.

we'll pay the in-state rate for a public school.

if the kid currently applying wants to go out of state or to a private school, well, that's why they submitted those scholarship applications.