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Don't Leave Your Money on the Table

Let’s face it. The college application process is stressful. Most highs school seniors are applying to multiple colleges, writing as many essays, collecting recommendation letters and concerned continuously about admissions. Likewise, parents are stressed about paying for college with the cost approaching what might be more than they paid for their starter homes. Many parents would like to have some assistance with the costs but often make the mistake of pre-judging their ability to qualify for aid. As a result, they don’t bother to fill out the FAFSA to see if they qualify. Big mistake. Their assumptions are based upon misconceptions that are just plain wrong! Here are a few.

First misconception: Only people looking for need based aid should complete the form. This assumes that if you aren’t looking for a Pell Grant or a Stafford Loan you shouldn’t complete the form. Wrong! The FAFSA is used for other awards. State governments use the information from the FAFSA for their own financial aid programs. Some colleges also use the FASFA to calculate their estimate of a students need as well as qualifying for their internal scholarships. Bottom line, the FAFSA could help you find funding resources. Parents could complete the FAFSA in their child’s junior year of high school after their tax returns are filed. The junior year is the year schools are looking to for financial information and completing a FASFA could help parents forecast what Their costs might be at the schools they are considering before they even apply. I could limit the schsools they consider.

Second, you only need to submit the FAFSA once. Nope! Parents need to fill out the FAFSA for each year their child attends college. It is easier in the second year because your information pre-populates your form. After submission parents receive a Student Aid Report (SAR) telling them about their eligibility for federal aid and their Expected Family Contribution (EFC). The EFC is the amount the family is expected to pay for that year of college. The student’s need is calculated by taking the Cost Of Attendance (COA) for each school and the subtracting the EFC. This calculation is done yearly. And as noted above, if done in the junior year could help a family determine the cost of any school before applying.

Third myth, the FAFSA is complicated.  As a result, parents delay completing it until later in their child’s senior year. Don’t! Some schools award on a first come first serve basis. FASFA filing opens October 1st. The federal governments deadline is June 30th but many school deadlines are earlier. The FAFSA can usually be completed in under an hour if you have your information available. This information includes your tax returns, bank statements and 529 account information. There is an IRS import tool which will populate FASFA’s with data from tax returns, and a mobile app called myStudentAid making the process on line available. So while filing shouldn’t cause a panic filing earlier may have advantages.

Families will receive an award letter from each school where their child has been accepted detailing their aid. Some awards will renew, others will not. Families can appeal their awards particularly if there has been a change in their financial circumstances such as a loss of job or change in health of the primary payer.

Many families don’t complete the FASFA when they should. In the 2016-2017 school year more that 1.2 million graduates didn’t complete their FASFA’s leaving more than $2.3 billion on the table of unclaimed awards. Of that 1.2 million of students, 648,191 would have been eligible for a Pell Grant.

Don’t leave your money on the table!

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SJ Boyle Wealth Planning, LLC is a registered investment advisor in the state of New Hampshire. We work as a personal financial advisor to families in Hanover New Hampshire and Vermont helping them coordinate every aspect of their financial affairs including their educational, investment, retirement and estate planning. As a Registered Investment Advisor we work in a fiduciary capacity serving their best interests first!

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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