Hello all, just a few things I was wondering about college finance…
1 for American Tax Credit, is it fair to take 2.5k off the total cost of college if my family qualifies for the full amount and will be using this "free" money for tuition instead?
2 I was accepted to a meets-full-need school, but my FAFSA shows an income of a fair bit higher then my family will be making in 2016. Would an appeal using 2016 taxes potentially get me more grant aid, especially considering the way FAFSA changed this year?
3 just a general question, what is the best option for loans beyond federal direct? (don't say no loans I know that is an option :p) From my understanding, PLUS loans aren't great and the only other good program I've found is Salie Mae. What other options are there?
Thank you all!
Your 2016 income will be used when you complete the financial aid applications for 2018-2019. Because of this…there is speculation that schools won’t make adjustments based on income only. They might if there have been other financial hardships. But that 2016 income will be used for 2018-2019.
I don’t understand the first question - “fair” to who? Take it off the cost to who?
I mean is that how it will actually work out nicely like that or does that money tend to go other places? Take off the total price my family will pay after grants/direct loans
No, don’t just deduct $2500 from your tuition cost. That money will go to your parents’ taxes and your family may never actually see $2500 in your tax refund if it doesn’t have enough withheld to offset the taxes owed. If your parents do get a $2500 refund, use that to pay for your sophomore/junior years of college and take $2500 less in loans that year. Also, if your school is meeting your full need, you may NOT qualify for the full AOTC. Any amount of FA beyond tuition, fees, and books are not counted toward the AOTC, so if you are getting full tuition and fees, you may not have enough in paid qualified expenses to get the full AOTC. Just leave it out of your calculations for now and look at it as a bonus start for next year.
You need to appeal to your school with a change in circumstances between the 2015 and 2016 income numbers. Most ‘meets full needs’ schools do not rely on the FAFSA number but also require the CSS, which asks for the 2016 income numbers too. Even the meets full needs schools that require the FAFSA only many calculate your need differently than the FAFSA generated EFC.
While.the Profile does ask for 2016 income also…there is no evidence that the numbers other than 2015 will actually be used to award need based aid for 2017-2018.
The 2016 income will be used for the 2018-2019 school year.
I’m not a financial aid officer…but I’m betting that appealing based on income alone will not likely gain you much. If you have a financial crisis of some sort…unreimbursed medical expenses, for example, you might have a better chance for appeal.
But in this transition year most people won’t have the same income in 2015 as 2016. The 2017-2018 uses 2015. Not sure there will be a lot of,adjustments made.
But you certainly can contact the school and find out what they need for documentation to process professional judgment.
Sallie Mae isn’t any better than PLUS, you know:
http://www.collegescholarships.org/research/student-loans/
No loans other than federal direct student loans is the financially safe policy.
With regards to having colleges consider your 2016 income instead of your 2015 income: This may be a good idea of there has been a substantial change in income. You can run the net price calculator with the 2016 income instead of the 2015 income to see if that would make a big difference in your aid numbers before you ask. Read the financial aid portion of your school’s website to see whether and how they entertain financial aid appeals.
Even with full need met my parents will still be paying the 4k to qualify for AOTC and also pay greater then 2.5 in taxes so I should be getting that full refubd/deduction. Thank you for the info on salie mae, I was not aware of that and that sounds very shady and good to know. It isn’t a particularly enormous change but definitely substantial enough to affect how much my parents can pay a year. I did file css so that might reduce my chances but it can’t really hurt right?
It doesn’t matter that your parents are paying $4000, it matters if they are paying it for qualified educational expenses. Room and board, transportation, insurance, some student fees, and a lot of other things don’t count. You can do some shifting around on your taxes, but that would then require you to declare some of the scholarships and grants as income. Some grants or scholarships are limited to tuition, so then you can’t shift those funds to non-qualified expenses.
You will not have the $2500 for your first year even if they do get the full $2500. They’d receive the $2500 with their tax refund, usually not till Feb or March, and your first year’s tuition will be due in Aug and Jan. Whether they still have that $2500 the following Aug is up to them (you asked if it just gets eaten up by other things; IMO, it does unless an effort is made to set it aside).
So as long as they are paying the 4k directly into tuition it counts? I still have that amount of tuition not covered. In that case, could I delegate the outside loans and scholarships to those fees in order to ensure that at least that much is being applied to educational expenses? and I would still technically get 4 years of the tax return, just delayed because of tax season, yes? Thanks for your help!
You do know that he amount the college expects your parents to pay is what the college calculates that amount to be…and not how much your parents CAN pay.
And again…that lower number will be used in 2018-2019.
Loan proceeds can be used to pay $4k of tuition, it doesn’t have to be cash.
Some outside scholarships can be used for non-qualified education expenses, some are restricted to tuition, some let the school decide. You have to check the terms of the scholarship or program.
My daughter gets Bright Futures from the state of Florida and I read that it would be refunded to the student if the student had other scholarships or aid. The problem was that I was reading that on specific schools’ webpages, and those schools allowed it. BF actually leaves the decision up to the school, so at D’s school it can only be used for tuition and fees, not for room and board (or at least not for off campus living). The school also has that policy for its own grants and merit money which can be used for anything directly billed, but it won’t give you the merit money in cash. It wasn’t an issue until she moved off campus and wanted to use BF money for her living expenses. Nope.