FAFSA tips with a lot of dependents

Paying for College
1

Hi all! I’m wading into this with my oldest child and found my EFC last year to be kinda crazy. My issue is that I make a good income, but I also have a single income and 9 kids. I only have 1 in college. Has anyone else dealt with anything similar and have tips on how to manage this? I’ve started him in CC for his first year, but eventually he’ll be going to a 4-year school. I’ve heard you can appeal an award letter, is that the route I should take? Is there any hope or should we just assume we’ll be paying full price?

Thanks!

2

Whoa, there. Yes, you can appeal an award letter but without grounds for an appeal, you are wasting your time. Often, even with an good grounds, you won’t get additional money. It’s not like you should go into negotiations just in hopes of getting more money by telling the school you can’t afford it, and they give you more money. Loans, are usually the counter.

First of all, most schools do not even meet need as defined by EFC. Doesn’t matter if you have a zero EFC, once you get whatever entitlements that come with it ($6k PELL, subsidized loans of about $3500 first year, some state money if your state so provides). Any more financial aid has to come out of the school’s coffers and very few schools guarantee to fully fund their students need, particularly as defined by FAFSA.

Even as a single parent with 9 kids, eligibility for PELL means a low income. and low assets. Mostly income. Once over the threshold for Simplified needs, your FAFSA EFC is going to run at least 22% of parental income with adjustments for dependents, state of residence, taxes paid. This is usually the main driver of EFC. Exceptions are if you have a lot of assets, or your student has a large income/assets. Parental assets hit up at 22-about 50% on a sliding scale whereas assets are hit up at less than 6% after an allowance.

So to reduce your EFC, usually, it means reducing your income. That usually has the biggest impact on EFC-parental income. Also the income used corresponds to you tax return for the previous year. The income reported for your student’s current school year would have been from 2017. The FAFSA EFC for next academic year, starting fall 2020 will use 2018 income figures. As we are now in the last quarter of 2019 right now, there are limitations as to what can be done to reduce the EFC For the next two years. Next year is pretty much cast in stone already, and the year after is well on the way.

If you have two kids in college at the same time, your parental EFC is halved. Some families work it out to have multiples at college at the same time by use if gap years to get that reduction in EFC.

Some things you can do to keep that EFC as low as possible are:

File on a day when your assets are low. Payday is not a good day. Make sure you don’t have earmarked funds sitting in your account the day you file. Pay that roofer, pay off your credit card, if you have designated funds sitting in your bank accounts

If your student has assets, money, it might be a good idea that he spend it on things he needs, his expenses, as his money will be hit up harder with no allowance than it would be if it’s parental money. Perhaps he should reimburse you for some expense you paid for him

Not the time to pull money out of your 401k or other such funds. It’s added income

If there is a non custodial parent or active relatives paying things on behalf of the student, it’s a good idea to have them pay you, rather than the student. Monetary gifts, payments on behalf of the student are considered non taxed income to the student and hit hard. You can get a gift of money and it’s not reported. Your student is supposed to report it on the FAFSA.

Look up what your child’s School or schools you are eyeing do fund in terms of financial aid. As mentioned above, most schools don’t meet full need even if you have it.

Right now, with your son at community college, it’s likely the costs are relatively low so your EFC might well be high enough that you and he are expected to pay the full cost. If he is thinking about going away to college, that usually means the cost will sky rocket as room, board and other expenses enter the picture, as well as fact that most 4 year colleges charge more in tuition and fees than community colleges

A bit more info needed to come up with some more directed suggestions. Like what is your EFC? Will you have 2 in college at the same time? What 4 year schools are in the agenda?

Usually, transfers do not get as generous of aid packages, merit money as those going directly to a 4 year college do. For your son, it’s important that he talks to the office at his college that advises in transferring to a 4 year school. There are often relationships between a CC and such schools.

3

Well, my student has no tangible assets other than a small checking and savings ~$1500. My EFC last year was around $33k, he’s looking at Illinois State University, which is around $25k Tuition and R&B. We have an odd situation where we homeschool, but have our kids do most of their senior HS year at the CC (kind of dual-enrolled). They have enough credits to graduate at the end of their Jr year, but we keep them officially in HS and just pay for CC classes (part time) to get them more prepared and start on gen-ed. My oldest already completed that year and is in his first full time year as a college student. My next son will have his dual-enroll senior year next year. It may make more sense for us to have him graduate and officially start college when he’s 17 so that this year’s FAFSA we could could answer that we will have 2 in college next year. My oldest may go away to a 4yr college next year as he’ll finish this year with about 47 credit hours.

We do have grandparents that want to give some $$ to the kids for college, it would be below the gift total of $15k per year. Are you saying that it would somehow get reported in our FAFSA and should be given to us (the parents) instead of the kids? Right now, their plan was for the kids to let them know when they needed the lump sum and give them a check to help pay for college. If they ever had a year that would be greater than $15k to give I was thinking we’d have some of the money gifted to us, and some to the student.

We have so far found the CC advisers to not be much help, I was planning on setting up a visit and talk with the advisers at ISU in the next month.

Thank you very much for your help!

4

Appeal your award letter based on…what?

The primary driver of need based financial aid is your income. Your family size does have a small impact. Having multiple kids in college might have an impact if the colleges are generous and meet full need for all.

Right now, you have one kid in college, right? How old are the other kids?

5

The gift limit is a lifetime one…the $15,000 a year “limit” triggers having to complete a form. But it’s highly unlikely your parents would exceed the lifetime limit per kid funding college. @BelknapPoint please clarify this again.

Money your parents give to your kid to fund college will need to be reported in subsequent FAFSA years.

6

This is my first and only in college. I understand that the primary calculation only takes that into account and not the other kids. I was told by someone that I could appeal based upon extenuating circumstances, I thought this was a possibility but didn’t fully understand it. Our $$ is spread much thinner than most due to our choices in life, so I wasn’t sure if that was what one would consider a data point worth being part of the calculation. I will have another in college in 1 or 2 years…and then another every 2 years after that for a loooong time :). Considering the $$ involved, I wanted to make sure that we exhausted all options.

Thanks

7

If your $ is affected by discretionary spending choices, they generally have little sympathy. Number of children isn’t ignored. But your choice to send them to private k-12 schools or have pricey activities won’t help.

8

Yes, if family members give your student money or pay their bills, it is supposed to be reported as untaxed income to the student on the FAFSA. But if the money is given to you, it is not reported on FAFSA as income, though if it is sitting there as your asset on the day you file FAFSA , it has to be reported as such.

These sort of things can make a difference in your EFC.

What extenuating circumstances do you have? The number of dependents is taken into account in the FAFSA formula Things like serious medical conditions, job loss, catastrophe are worth bringing to the Financial aid officer’s attention for possible professional judgement adjustments, but general life style decisions are not.

Next year, when you have 2 in college, your EFC will be half of this year’s, if all else is the same and your students don’t have sitting assets. At about $15k per kid, I see no entitlements they will be getting as that’s too much for PELL eligibility. Just some subsidized loans for your student who goes away to college. All students eligible for $5500 in Direct loans, increasing a bit in future years with some of it subsidized if EFC and costs wRrebt it.

You need to talk to the community college transition office about what money might be available for your son when he transfers to ISU or other schools. Though he will have need with a sibling in college (~$10k based on current numbers) , ISU does not guarantee to meet full need, not so they most of the time. They simply gap.

If your next child up for college has high test scores, and great grades in Dual Enrollment classes, you might want to look at possibilities for him to get full merit at some schools. Lottery ticket chances, but otherwise I do not see how you can pay less than commuting to community college costs with your EFC. If your kids end up just doing 3 years of college with you paying that cost, you have saved a year’s tuition with Dual Enrollment ( if you are getting it tuition free) and saving considerable costs that second year having these kids commute to community college and paying those much less expensive tuition dollars before going off to a 4 year college

9

The IRS $15k annual exclusion amount for the gift tax has nothing to do with what needs to be reported on FAFSA.

10

What do you think your “extenuating circumstance” is?

  1. The school won’t view having a lot of kids as an extenuating circumstance. That was a choice you made.
  2. The school won’t view having only one parent working as an extenuating circumstance either.

How old are the other siblings?

While the FAFSA EFC is going to be lower for kid one when kid two goes to college, this does not mean you will get a nickel more of need based aid. The only guaranteed award your kids will get with even a $15,000 a year EFC is the federally funded Direct Loan. The first year will get $5500 and the second year will get $6500.

Can your spouse get a part time job to help with college costs?

11

What do you think your “extenuating circumstance” is?

  1. The school won’t view having a lot of kids as an extenuating circumstance. That was a choice you made.
  2. The school won’t view having only one parent working as an extenuating circumstance either.

Thanks, this is what I thought until someone mentioned to me that I should try appealing. I’ll plan on figuring out loans…etc as I don’t think he’ll hit any need-based aid.

The idea that they don’t care about your personal choices is interesting to me. Some people make the personal choice to have a low-paying job, either because they like the work, or they made a bad choices in life…and that is absolutely taken into consideration. I’m accountable for all of the choices I’ve made in life and will deal with the costs.

12

The vast majority of colleges do not meet full need for all. So having a lower paying job really doesn’t guarantee additional need based aid at most places.

13

Ummmm. I don’t understand why you would expect schools to take your personal CHOICES into consideration in terms of aid. We are not talking subsistence here. We have life essentials that are not addressed in this country. College is not an essential.

Please note that I am a huge proponent for free community college for all. I think it’s great that you have covered your kids’ first two years of college marvelously. Practically free for those first years. If they can finish in 4 years, 2 in a 4 year college, you’ve effectively cut your college expenses drastically.

FAFSA does take your dependent number into account. They also have some asset protection that depends on the older parent’s age. Other than a bit of 2 parent income wage protection, I don’t know how stay at home parents are penalized by FAFSA. I doubt that amount will make much, or even any, difference in your financial aid picture

As I said earlier, certain life catastrophes can be taken into account by FAFSA via personal judgement of the college’s financial aid officer. There are kids whose parents have deserted them , have no income, incarcerated, disabled or terribly ill, dead even. Terrible things do happen in life, and the financial aid process does have leeway (often not enough) for such circumstances, but it’s still a tough go for these kids. Your kids have the absolute best situation in that they have parents backing them.

I suggest going to the community college and having a chat with the transition counselor ( the one who deals with these kids going on to 4 year colleges) , and with the financial aid officer and pick their brains on what might be available to your kids

I’d also consider other college venues for your other children if it appears that any of them have a shot of getting full ride awards at colleges. Usually that first year is when those options are available, not so much for transfers so you might want to read up, research those possibilities now.

14

@cptofthehouse

The asset protection allowance for parents has been very significantly reduced…very. It’s based on the age of the older parent but even with that…it’s quite low.

Huge drop!

15

Thank you all for your help, you’ve helped me dispel the bad advice I was given and have helped me better understand where to go from here.

16

@thumper1 , I know!!! Terrible, isn’t it? These are the sorts of insidious changes that are cuts in aid that are not immediately noticed.

That allowance has always been unfair to single parents in that it isn’t half of a two parent family’s. It appears that this allowance may be on its way out altogether.

17

@the0ne

Perhaps some of your kids will be strong enough students to be eligible for merit aid. If so, that can really ease the cost of sending kids to college.

18

The asset protection allowance is a joke. And IMO a single person is more at risk and the allowance should be the same as for married. At least with two parents there are two opportunities for income if one loses a job or becomes disabled. As it is, the asset protection amount barely covers the bills for one month in the event of a job loss for most people.

19

Some of my kids are very strong academically, for instance my oldest has a 4.0 through 19 hours at CC, but he didn’t really know what he wanted to do for a career so we were hesitant to go directly to a 4 year college.

Is merit aid that stacked against transfer students?

I acknowledge that sending them to CC itself saves an enormous amount…about 80% savings in $150/credit vs $900/credit at ISU. I’m saving a lot for the first 2 years, but then I’m afraid we’re hurting them a lot for the final 2 years. Maybe my tactic from now on should be have them apply to 4yr schools as a freshman to see if they’d be offered money, but I imagine it’s rare to get enough to cover the cost difference noted above.

20

Yes. Most aid and merit money is directed towards freshmen. Dual Enrollment kids are considered freshmen until they finish high school. So, yes, if your oldest had fantastic grades and high test scores (ACT/SAT), he would have been in the running for merit money.

No sense brooding about that. I think youve done very well with the path you ve taken. Big merit money is hard to get. Get hustling over to the community college with your son and find out what is available for one of their best transfer students moving on to a 4 year school.

But for your next one, make sure you are in track for testing. Like National Merit qualifications? Like the PSAT? Those things can bring $$$ to the table. No guarantee, but possibilities you might have missed with your oldest. There are full ride scholarships out there for top students.