FAFSA Changes for 2011

Paying for College
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<p>2011 brings changes to the FAFSA forms that most people aren’t aware of, making the process even more difficult, according to some observers. Changes include:</p>

<p>·Addition of a new High School question (school name, city and state) and deletion of the enrollment status question and TEACH Grant questions. The new High School questions are added to help high schools identify students who haven’t submitted the FAFSA, to help them encourage these students to submit the FAFSA.</p>

<p>·Addition of more intelligent skip logic, such as skipping asset questions when asset information does not affect eligibility.</p>

<p>·Parent PLUS loan will require a FAFSA starting in 2011-12.</p>

<p>·Addition of a single login and a single point of entry to the online FAFSA, whether to start, continue, complete, check the status of, view, correct or print signature pages for a FAFSA.</p>

<p>·The EFC figure will be moved to a less prominent location, since it tends to confuse students, but this means the students who are interested in it may have to hunt more for it.</p>

<p>·Addition of searchable help, smarter school code search, more dynamic context-sensitive help. Completing the online FAFSA will be more of a guided process this year.</p>

<p>·Correcting errors on the online FAFSA will be easier.</p>

<p>·The IRS prefilling will also be available to students when they submit corrections to the FAFSA.</p>

<p>·Added a federal loan estimate to the confirmation page.</p>

<p>·The “Interested in Work-Study or Student Loans” question will drop the ability to say that the student is not interested in student loans, as this does not increase other forms of aid, does not provide meaningful information to schools and is confusing for applicants.</p>

<p>·The National SMART Grant and Academic Competitiveness Grant add-ons to the Pell Grant have been eliminated, as 2010-11 was the last year of funding for these programs.</p>

<p>·The automatic zero EFC threshold has increased from $30,000 to $31,000.</p>

<p>·The Hope Scholarship tax credit’s improvements (from $1,800 to $2,500, 2 years to 4 years, partial refundability, not subject to AMT, higher income phase outs) made by the American Opportunity Tax Credit have been extended for two years and won’t be expiring this year (2010).</p>

<p>·The Tuition and Fees Deduction has been extended for two years. For most students the Hope Scholarship tax credit is better.</p>

<p>·The various improvements to the Coverdell Education Savings Account ($2,000 contribution limit instead of $500, eligibility for K-12 expenses, not just college, higher income phase outs etc.) are extended for two years and won’t end this year.</p>

<p>·Employer tuition assistance of $5,250 still available for graduate and professional school, not just undergraduate.</p>

<p>·Student loan interest deduction of $2,500 in student loan interest will continue to be available beyond the first 60 months and the income phase outs ($60K/$75K single, $120K/$150K MFJ) will not decrease.</p>

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<p>I just went through the FAFSA for the first time (D is hs senior) and did not think it was so bad (feel like I must have missed something; haven’t sent it in yet). There were so many fewer questions than on the Profile (filled that out for 2 EA apps), so I was expecting the worst.</p>

<p>Was not clear on one item–unemployment benefits–there is a spot for reporting untaxed income (we had $2400 of untaxed benefits + $2400 taxable). Instructions did not specify unemployment $ to be listed there, but I did put it in. Is this correct?</p>

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<p>That was the case last year. But, I thought the $2400 nontaxable unemployment benefits provision was only for 2009, and that all unemployment benefits in 2010 are taxable.</p>

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<p>The Academic Competiveness Grant is gone? We were banking on that. Darn. would have been $1300.00 this year.</p>

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<p>Yes. The ACG and SMART were always both scheduled to sunset this year. The decision was made to not change that.</p>

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<p>I just got an email from my accountant who is helping me prepare a FAFSA estimate and she says that the $2400 non-taxed unemployment benefit is now gone! Glad I found out now before sending out the Profile to all of D’s RD schools! (although not sure how much a difference it would have made; it all seems like such hocus pocus!)</p>

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<p>The tax exemption for unemployment was just a 1 year thing for 2009. It should not make a big difference. If anything it will make the EFC a little lower as the extra taxes will reduce the available income</p>

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<p>You forgot to mention that the Asset Protection Allowance has decreased.
For us, our asset protection allowance will be $4600 less than it would have been under last year’s formula.</p>

<p>How the heck does it make sense to decrease the asset protection allowance when the economy is so crappy, and likely to remain so for quite some time? SHEESH.</p>

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<p>Thanks for the info that the ACG is gone for 2010-2011.</p>

<p>What about the FSEOG? </p>

<p>The ‘award estimator’ for my daughter’s college has not yet been updated for 2010-2011 and along with ‘ACG’ also shows my daughter would be eligible for FSEOG (based on our EFC).</p>

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<p>I know you can find the efc formula, is there a formula for the calculation of the Direct Stafford loan(subsidized vs unsubsidized).</p>

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<p>FSEOG is a campus-based program, and it still exists. Schools are given a lump sum by the feds, and the school decides how to award it. If you have SEOG, it will stay there AS LONG AS changes are not made to the info on which the award was based. For example, if you estimated & your estimates were way under, you could lose the SEOG. If your school only awards SEOG to certain EFC’s & verification results in a higher EFC you could lose the SEOG.</p>

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<p>Kelsmom, any news on the Perkins loans becoming unsubsidized?</p>

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<p>quick question
Can an undergrad student make use of a)American Opportunity Credit and b)Tuition and Fees Deduction-tax form 8917</p>

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<p>If the student is a dependent for taxes then only the parent can take credit or tuition and fees deduction (either/or - not both). Of course there must be qualified expenses paid. you cannot use the same expenses for more than one tax benefit.</p>

<p>If the student is independent for taxes then the student can take the credit or deduction if there are qualified expenses paid. If the student is under 24 the refundable part of the credit is harder to get as the student must have earned income of more than 50% of their support.</p>

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<p>^^^thank you for explaining…it’s terrible that we can’t get both
which one between AOC and 8917 usually result to more money?</p>

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<p>Usually the AOC as it is up to a $2500 tax credit, the iand fees is a maximum $4000 deduction (not credit). But you can run it both ways and choose the one that is best for you. </p>

<p>There are income cut offs for eligibility.</p>

<p>IRS 970 has all the education tax benefit information (though the 2010 one is not out yet).</p>

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<p>i made about $3,000…mom $60,000
and we would both qualify for the max $2,500 tax credit
i’ll do some googling around to find out more on the IRS 970…thank you</p>

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<p>You would probably not if your income was $3000. But your Mom probably would. And you would have to have qualified education expenses in 2010 of $4000.</p>

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<p>maybe i’m reading it wrong…
[Tax</a> Topics - Topic 457 Tuition And Fees Deduction](<a href=“http://www.irs.gov/taxtopics/tc457.html]Tax”>http://www.irs.gov/taxtopics/tc457.html) …says->
You cannot claim the tuition and fees deduction and a Hope or Lifetime Learning credit for the same student.
but they did not mention anything about tuition/fee deduction + American Opportunity Credit???</p>

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<p>FAFSA wasn’t able to retrieve S’s school from the database, may be because the school name is listed in several different ways. Finally we decided to override and the SAR now doesn’t contain the school code. Hope that wouldn’t be a problem.</p>