The scariest part of college applications: figuring out how to pay

FROM BOSTONGLOBE.COM -

Seventeen-year-old Megan Grossi of Malden has filled out her college applications, applied early action, and received acceptance letters from all four of her chosen schools. And now the hard part — figuring out how to pay for it all.

Grossi, a senior at Mystic Valley Regional Charter School, has received a commitment for an academic scholarship at her top choice, and is scouring for local and national scholarships.

Up next, she said, is filing the dreaded financial aid form that all students must complete to be considered for any federal aid such as grants, scholarships, loans, and work study. This year’s version of the Free Application for Federal Financial Aid was made available Jan. 1.

“Finances are huge for us,’’ said her mother, Carol Ann Desiderio-Grossi. “That’s why she applied to schools she really wanted and also state colleges. We aren’t quite sure how the finances are going to work out.’’

Grossi’s top choice, Ohio Wesleyan University, has already offered her a scholarship covering 60 percent of the $51,000 annual cost. Desiderio-Grossi said while the aid sounds like a lot, it still leaves a gap of nearly $100,000 over four years.

‘Finances are huge for us. . . . We aren’t quite sure how the finances are going to work out.’


That’s why they will be among the many families filling out the FAFSA over the next few weeks.

Martha Savery, a spokeswoman for the Massachusetts Educational Financing Authority, said all families should take the time to fill out the FAFSA even if they don’t think they will qualify. Not only could a family’s financial situation change, she said, but the form is necessary for federal student loans, which are available to any student regardless of need. And it’s free.

“We always recommend that a family take the time to file a FAFSA,’’ Savery said. “It’s not to say it’s a breeze, but it’s not as difficult as some people believe it is once they get into the process.’’

Like college applications, deadlines for applying for financial aid vary from school to school, officials said, which means families must take careful note of the earliest date by which the form must be filed.

“Families really need to be on the ball to start the process,’’ said Savery.

Deadlines typically range from mid-January to March.

Megan Grossi, 17, a Mystic Valley Regional Charter School senior, and her mother, Carol Ann Desiderio-Grossi.


Megan Grossi, 17, a Mystic Valley Regional Charter School senior, and her mother, Carol Ann Desiderio-Grossi.

The other key is having all paperwork together before starting the process, Savery said. To start the form, families will need a FAFSA PIN, which serves as an electronic signature. This is available at www.pin.ed.gov. Parents and students will need to have Social Security numbers, driver’s license numbers, their most recent federal tax returns, the most recent W-2 or year-end pay stubs, untaxed income records, bank statements, and business and investment records.

“Being organized and having all the information there is really what makes it a simpler process,” Savery said.

She said it takes most families about an hour to complete the form if they have all their records together.

Savery said there are many resources available to help students and parents prepare and file the form.

In addition to resources online at www.mefa.org and www.fafsa.gov, families can receive personal assistance from financial aid experts at upcoming events organized by the state agency.

The resources help families answer questions about a variety of topics including assets, what records are needed, and how to link updated tax information. There are also answers to complicated family situations such as divorce, noncitizens, and emancipated minors.

The Massachusetts Educational Financing Authority helps organize FAFSA Day Massachusetts, a volunteer program in its 10th year providing free assistance to students and families seeking to complete the form. More than 20 FAFSA Day events will be held throughout the state, most on this Sunday or on Feb. 23, though the dates and times vary by location. A list of all locations is available at www.fafsaday.org.

“It’s scary for families, but the more they know and can learn about the process, the easier it becomes,’’ said Mary Beth Courtright, the director of financial aid at Massasoit Community College in Brockton. “The folks that help out are all there because they want to be there. They want to help families through the process and make it as easy as possible.’’

Massasoit will host a FAFSA Day event on Feb. 10 at 6:30 p.m. This is the second year Massasoit has hosted the event, which was previously held at Brockton High School. About 200 parents and students typically attend, Courtright said.

Elizabeth Hennessy, the director of counseling at Blackstone Valley Regional Vocational Technical High School in Upton, said families can walk into a FAFSA Day event not knowing where to start and leave having the form completed and filed. “It’s really streamlined,’’ Hennessy said.

“We have lots of volunteers because it takes an army. We have students move people around the building and triage them based on their need.’’

Blackstone Valley’s event will be held Sunday at 1 p.m.

When families arrive, they will be asked questions such as whether they need an interpreter, have they started the form, or do they just have a few questions. Families just starting will get a brief overview and then can sit down at a computer and complete the entire form. If they want to finish later, they can save the information, Hennessy said.

Families with a question or two can go to FAFSA Express, where they meet individually with experts and leave when they are ready. Hennessy said the financial experts come from all over the state, which means families don’t need to worry about sharing personal information with people they know in their community.

“You can walk in with nothing done and leave with it done,’’ she said. “The thing that families like is that it’s free, they get access to financial aid experts, and it doesn’t leave that day. You can leave with resources so you can continue on.’’

Once families get a confirmation that the form has been completed, they will wait to hear from the colleges about award letters, which typically arrive in March, Savery said.

Until then, families like Grossi’s will search for ways to help pay for the hefty bills that start next year.

Desiderio-Grossi said between savings, loans, scholarships, and financial aid, she hopes to have enough money so her daughter can attend her dream school.

“It’s like putting together a puzzle,’’ Desiderio-Grossi said. “You piece it together until you get the whole picture. Once the FAFSA comes through, then we’ll know where we really are.’’

Seven mistakes to avoid on financial aid forms.

FROM YAHOO FINANCE-

Millions of families will fill out a key financial aid form in coming weeks, many for the first time. Unfortunately, mistakes on the Free Application for Federal Student Aid (FAFSA) are easy to make, education experts said.

Here are some of the most costly errors to avoid:

1. Failing to file

Too many people incorrectly believe they either don't need or won't get aid.

The American Council on Education found that one of every five dependent low-income students and one in four independent low-income students - those most likely to get Pell Grants destined for the neediest students - fail to apply for aid.

At the other end of the scale, families with six-figure incomes may not file, not realizing that income and assets aren't the only criteria used, said Mark Kantrowitz of Edvisors Network. Family size, the number of children in college and the age of the oldest parent are taken into account, which can result in need-based aid even for wealthier families, particularly at costlier schools.

Even if no need-based aid is forthcoming, completing the FAFSA gives families access to federal student loans, which are much more consumer-friendly than private loans.

2. Waiting until you file your taxes

Your FAFSA form requires 2013 income tax data, but waiting until you've filed your return can be an expensive mistake. Some schools offer bonuses for early filers, while a lot of financial aid is first come, first served, said W. Kent Barnds, executive vice president at Augustana College in Rock Island, Ill.

Late filing puts families "at the back of the line" for aid, said Todd Weaver, a former college financial aid official and partner in Strategies for College, a Hanover, N.H.-based consulting firm.

It's better to use estimated tax numbers so you can file the FAFSA as soon after Jan. 1 as possible, then correct it with the actual data once your return is filed.

3. Not including all possible colleges

Life is uncertain, so cover your bases. Have your FAFSA results sent to every college you're considering, even the ones that seem unlikely to be your final choice. One of those long-shot colleges may surprise you with an excellent aid package that could sway your thinking. Alternatively, a reversal in your situation could have you seeking out different choices.

4. Using the wrong parent

Divorce, joint custody and remarriages can create confusion about which parent's income and assets should be used in the FAFSA form. A quiz at CollegeUp.org can help families figure out who their "FAFSA parent" should be.

Note that a little planning can have a big impact. Let's say a fictional student named Ramon lives much of the year with his mother and her husband. Ramon's stepfather makes a good living, but has made it clear he won't help with college costs.

That's unfortunate, since the stepfather's high income will reduce Ramon's financial aid package. If Ramon instead spent most of the year living with his lower-income father, his aid package would be based largely on his dad's finances.

5. Not getting help

The FAFSA's complexity can be daunting, Kantrowitz said, especially to lower-income families who don't have experience applying for college - in other words, those most likely to benefit from aid.

Fortunately, there are ways to get free, expert help. The College Goal Sunday national program () offers events in most states. Many colleges and universities also schedule "boot camps" to help families tackle the form, Barnds said.

6. Getting the wrong kind of help

Some insurance agents tout themselves as college planning specialists to sell annuities and expensive life insurance, said Lynn O'Shaughnessy, author of "The College Solution."

Before you buy any insurance product to hide or reduce your assets, run the idea past a fee-only financial planner or a CPA familiar with college planning.

7. Meekly accepting an outsized "expected family contribution."

One family Weaver knows saw their financial aid package all but disappear after the college compared IRS transcripts to the family's FAFSA filing. The family had correctly excluded from their income a 401(k) distribution that was rolled over into an IRA. The college incorrectly added the distribution back into their income and shrank their award.

"They had to talk to three different people (at the college) before they got to the director of financial aid who realized it was a mistake and overruled it," Weaver said.

Also, the FAFSA doesn't provide a way to explain special circumstances, such as a recent layoff, cutback in hours or death of a wage earner, Kantrowitz said. If your 2013 income isn't representative of your current circumstances, you can ask the college financial aid office for a "professional judgment review" that may result in a lower expected family contribution.

Answers to Your Questions About the Fafsa.

FROM http://thechoice.blogs.nytimes.com

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Reporting Monetary Gifts

Q.

My husband received a monetary gift of $20,000 from his father. We were told by our tax people that, since it was a one-time gift, we do not need to claim it on our taxes. So this money will not show up in our taxes. Do we need to report this income on my son’s Fafsa? The gift was to my husband, not my son.

— Mary

A.

The annual gift tax exclusion was $13,000 in 2012 and will be $14,000 in 2013. The amount your husband’s father gave him exceeds this amount. However, it can be treated as a joint gift from your husband’s father and mother; couples can give up to twice the gift tax exclusion without incurring gift taxes. In any event, gift taxes are paid by the person giving the gift, not the recipient. The one-time nature of the gift is irrelevant to the tax status of the gift.
The gift should not be reported on the Fafsa because it was given to your husband and not your son. Cash support to the student must be reported as untaxed income on the Fafsa. Cash support to the student’s parents is not reported on the Fafsa.
Cash support includes money, gifts and loans. It also includes food, clothing, housing, car payments, medical and dental care, insurance and college costs, as well as money paid to someone else on behalf of the student (i.e., money paid for expenses the student would otherwise be obligated to pay).

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529 College Savings Plans

Q.

If a 529 college savings plan is held in a parent’s name with the child listed as the beneficiary, is the savings plan considered on the Fafsa as student savings (of which they are expected to use at a higher percent) or as a parent asset?
— Victoria Hamilton

A.

The reporting of a 529 college savings plan as an asset on the Fafsa is based on the account owner, not the beneficiary.
The College Cost Reduction and Access Act of 2007 changed the treatment of 529 college savings plans starting with the 2009-10 award year. Any 529 plan that is owned by a dependent student or the dependent student’s parent is reported as a parent asset on the Fafsa. This includes the 529 plans for siblings.
Any 529 plans that is owned by an independent student or the independent student’s parent is reported as a student asset on the Fafsa.
Distributions from such 529 plans are not reported as income on the Fafsa.
Any 529 plan that is owned by someone else is not reported as an asset on the Fafsa, but any distributions from such a 529 plan are treated as income to the beneficiary.
If the parents are divorced and the 529 plan is owned by the noncustodial parent, the 529 plan is not reported as an asset, if the student is dependent. Distributions from such a 529 plan are treated as income to the beneficiary. If the student is independent, it is reported as a student asset and the distributions are ignored.

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Financial Aid Planning for High School Freshmen

Q.

What can parents of a freshman do now to make the entire process easier when the time comes, and to make our child get the financial aid she needs?
— PB

A.

It is never too soon to start preparing for college costs. Every dollar you save is about a dollar less you’ll have to borrow. The sooner you start saving for college, the more time there will be for the savings to grow from compounding interest.
Try to minimize income starting Jan. 1 of the junior year in high school. For example, avoid realizing capital gains, or offset them with capital losses. Need-based financial aid assessments are based on income during the previous tax year, so having higher income during that year may reduce eligibility for need-based financial aid.
It is also a good idea to start learning about financial aid. While financial aid rules change every year, it can help to familiarize yourself with the concepts and language of financial aid. That way you will not be intimidated by the alphabet soup of acronyms like Fafsa, E.F.C. (expected family contribution), S.A.R. (student aid report), and I.B.R. (income-based repayment).
You might also search for scholarships for high school students in younger grades. Fastweb.com, Zinch.com the College Board are just a few of the scholarship matching services available online. FinAid also provides a list of scholarships for children under age 13.

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Federal Aid for International Students?

Q.

My child was born in Canada and has been living in California for 13 years with an H-4 Visa. Is my child eligible for any financial aid?
— Linda

A.

Individuals with an H-4 visa are not eligible for federal student aid in the United States. They are considered to be international students.
Some colleges provide student financial aid to international students, but the funds are limited and there is a lot of competition. It might be best to see if your child is eligible for Canadian bursaries. There are many excellent Canadian colleges and universities.
Alternately, community colleges offer a low-cost education that may be affordable despite the lack of financial aid.

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Updating the CSS/Financial Aid PROFILE

Q.

We completed and submitted the CSS/Financial Aid PROFILE in December in order to obtain a financial aid estimate from a school my son considered for early decision. He decided to apply regular decision. We know we want to send the CSS to several other schools. Some of our financial information has changed. How do we update the CSS? Should we also send the updated information to the first school?
— Laura

A.

You cannot update the data on the CSS/Financial Aid PROFILE form for colleges that have already received the data. You should print out a copy of the PROFILE acknowledgment, mark corrections on this printout and send a copy of it to the colleges that have the old data.
When you add new colleges to the PROFILE form, you will have an opportunity to update the data on your PROFILE application. The updated data will be sent to only the new schools.

Top 3 FAFSA FAQs

FROM http://www.ed.gov/blog/-

Completing the Free Application for Federal Student Aid (FAFSA) is the first step in accessing the more than $150 billion available in federal student aid. Since the 2013-14 FAFSA launched, there are a few questions we’ve seen popping up more than any others. Let’s go through them.
How can I complete the FAFSA if my parents or I haven’t filed my 2012 taxes yet?
You CAN complete the 2013-14 FAFSA even if you or your parents haven’t filed your 2012 taxes yet. Here’s what you or your parents can do in your respective sections of the FAFSA:

1. When the FAFSA asks: “Have you completed a 2012 income tax return?” Select “Will file.”
2. Estimate income.

• If your 2012 income is similar to your 2011 income, use your 2011 income tax return to provide estimates for questions about your income.
• If your income is not similar, click Income Estimator for assistance estimating your adjusted gross income, and answer the remaining questions about your income to the best of your ability.

3. After you file your 2012 tax return, go to www.fafsa.gov and correct your information.

• Note: Once you complete your 2012 taxes, you may also be eligible to use the FAFSA’s IRS Data Retrieval Tool to automatically transfer your tax return information from the IRS into the FAFSA.

When is the FAFSA deadline?
States, schools, and the federal government each have their own FAFSA filing deadlines. It is important that you research all of these deadlines and complete the FAFSA by whichever deadline comes first. That being said, some types of financial aid are awarded on a first-come, first-served basis, so we recommend you complete the FAFSA as soon as possible in order to maximize the amount of financial aid you can receive.
Which FAFSA should I complete?
When you log into www.fafsa.gov, you will be given two different options: “Start a 2013-14 FAFSA” and “Start a 2012-13 FAFSA.” Which should you choose?

• If you’ll be attending college between July 1, 2013 and June 30, 2014 select “Start a 2013-14 FAFSA.”
• If you’ll be attending college between July 1, 2012 and June 30, 2013 select “Start a 2012-13 FAFSA.”
• If you are applying for a summer session, or just don’t know which application to complete, check with the college you are planning to attend.