Phone: 609 620-1770
Important Date Coming for Parents of High School Seniors
If you have a child (or grandchild) currently in their last year of high school you should be aware of the new filing date for the Free Application for Federal Student Aid also known as FAFSA. The FAFSA is the initial form that parents need to complete if they wish to be eligible for financial aid when their child goes off to college next fall. Colleges and universities use the information you provide on the FAFSA to determine financial aid packages. Starting this Saturday, October 1st, you can complete the form at this website.
Previously, you were unable to complete the form until January 1st of the year in which your child was going to start college. You also had to estimate income for that year and then update that information once you completed your taxes which made for a difficult process for parents and schools. Now you can utilize your most recent tax return (2015) and start the process on October 1st for the following school year. (Fall 2017)
As you prepare to file the FAFSA form, here are a few planning tips to keep in mind:
1) Regardless of your income you should file the FAFSA! Some folks think they make too much money and will not get any financial aid. While you may not receive any need-based aid, some schools will still use the information from the FAFSA when considering merit-based aid. Also, even higher-income families will be offered some type of loan package: unsubsidized Stafford Loans or PLUS loans. Hence, if you need to borrow for at least some of the cost of college you still need to complete the FAFSA. Some parents will also have the student take out an unsubsidized Stafford Loan and then offer to pay the loan off for the child if they keep their grades at a certain level. This ensures that their child has 'skin in the game.'
2) File early: many schools offer financial awards on a first-come basis to it is always better to move as quickly as possible. Now that you can use your previous years' tax return there is little to prevent most folks from completing this form in October.
3) The FAFSA will ask you about parental assets and children's assets. In the formula used to determine the Expected Family Contribution (EFC) parental assets are weighted at 5.64% while children's assets are weighted at 20%. So, if you have assets in your child's name you may wish to find a way to use those assets for his or her benefit. (i.e. automobile or computer purchase)
In summary, regardless of your situation, it is always a good idea to file the FAFSA and to file it as early as possible. Feel free to reach out to Ken Weingarten at 609-620-1770 to discuss other college planning issues.