@kelsmom , please comment: Doing the above does not necessarily give accurate info. I’ve noticed that the results for new students, freshmen, to be more favorable with a sibling in college than the actual change to financial aid when an upperclassman has a sibling start college. For those students, there is often no increase in aid, maybe some Direct Loan Subsidy, if they do not qualify for PELL. The schools don’t seem to go into their own stashes for that change in circumstance, though they might take it into account when a freshman applies for fin aid.
@cptofthehouse, every school has its own policies regarding how they distribute institutional aid. Those that focus aid on admissions may not be as inclined to increase aid for already-enrolled students. However, in recent years, college administrators have learned the hard way that they have to support students throughout their enrollment. That is, just getting them in the door isn’t enough anymore … the idea that once they are enrolled, they will find a way to afford to stay is no longer true. So while some schools may not be inclined to increase aid for current students to match what they would have received had they been in that situation as an incoming student, I suspect that number may be decreasing. The only way to know is to ask someone in administration in the financial aid office to share their aid policies for awarding to upperclassmen.
This also brings us to the point raised by @compmom, which is that the pandemic has been hard on schools financially. The Chronicle of Higher Education has had numerous articles on this subject, although I have not seen any specifically discussing funding for doctoral students. I think it depends on the source of funding for those programs. Schools are going to have to cut back on programs they consider unnecessary … we’ll see what they keep. I have seen schools cut undergraduate programs recently, and I imagine they may be doing the same at the graduate level.
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In your experience what income and asset level says it’s a waste of time to apply for aid?
There is no way to quantify that. The FAFSA assesses the family for federal aid eligibility. Even millionaires qualify for unsubsidized loans. Many families who “can” afford school choose to have their children borrow loans so they have “skin in the game.” FAFSA is required for all federal loans.
FAFSA also assists schools in evaluating students for institutional aid. A student with a relatively high EFC may qualify for grants at a higher cost school that has good need based aid. The higher the cost of attendance, the higher the EFC that may qualify for aid. The confusing thing is that you can be accepted to 3 schools that cost about the same & get 3 very different aid packages. Because you just never know, it’s good to see what happens by filing.
As has previously been mentioned, some schools require the FAFSA in order for students to be considered for merit … even though it might not actually ultimately be a factor in the decision.
And there are the things that may influence eligibility at a given income/asset level, such as household size and number in college.
That said … we chose not to file FAFSA for my S’s final two years in school. We did not have a super-high EFC, but he was at a relatively low cost state university & lived at home. We knew that there were no scholarships requiring FAFSA. So I guess I will say this: Run the NPC. If you are sure you won’t qualify for need based aid, if you know your child doesn’t need FAFSA for scholarships, and if you don’t plan to borrow federal loans (including Parent PLUS), you may opt not to file.
@kelsmom Thank you so much for explaining it clearly. Just out of curiosity, if someone is not interested in loans then in your experience who gets an absolute NO for need based aid from schools as costly as Ivies?
Need based grants are awarded based on Expected Family Contribution (EFC). The Cost of Attendance (COA) minus the EFC equals Need. Financial aid “can” be awarded up to the amount of Need. Only schools that promise to meet need will plug that whole Need gap with aid, and then it typically includes loans. Meet-needs schools will often determine the EFC using their own policies (for example, they may have a summer earnings expectation). Run your numbers through the NPC to get an idea.
Given the above, if the EFC exceeds the COA, there definitely will not be any need based aid. If the EFC is close to the COA, there may be no need based aid. Every school has its own unique policies, so there is no standard answer regarding who will get how much when Need does exist. My D’s experience with schools that say they meet need or come close was all over the map.
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Some colleges that meet full need for all have much deeper pockets and much more generous need based aid than the FAFSA would indicate. For example, a school like Harvard awards need based aid to families with incomes approaching $200,000 a year. Schools like Stanford award very generous need based aid to students with family incomes under $100,000. These awards far exceed what the FAFSA EFC would indicate.
These very generous schools use the CSS Profile, or in the case of Princeton (also very generous) their own Financial aid form.
Really, the FAFSA EFC isn’t what these schools use to award institutional need based aid.
Right?
That’s correct, @thumper1 . A select few schools are very generous for higher income families. I definitely recommend using the NPC as a starting point, because it will give an indication of whether or not need based aid is possible. Reading each school’s policies is wise, as well. These can change over time, so be sure to do your own research.
I would say that if the FAFSA EFC is $700,000 the student probably won’t get need based aid. But even if I had that much money, I would still at least check things out … no one wants to leave money on the table.
@kelsmom if you young person received a full ride merit based scholarship and received another $20k in outside scholarship on top of that and received the 20K back as a refund does the young person have to pay taxes on that money?
@trippfolsom, any aid received in excess of tuition and qualified expenses (as determined by the IRS) is taxable for the student. It is reported on the 1040, and it is also reported to the state of residence if the state has income tax. It’s not the refund that is taxed, though … it’s the amount in excess of tuition + qualified expenses. See the IRS website for details.
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@trippfolsom has this really happened? Or are you hopeful it will?
Many outside scholarships are specific for tuition, or room and board, and fees. If those costs are already covered some outside scholarships will not be given in addition. You need to check the provisions of the outside scholarship.
To add to the above, some schools that give full ride scholarships will reduce their own funding by the amount of the outside scholarship. This is not always the case, but it can be. It’s always wise to find out the school’s policies.
I don’t know if anyone knows the answer to this question.
D decided to get her masters. She took a loan out for tuition, the grad school loan comes with a 6 month deferment. During the time she took out her loan, the federal government decided to defer all interest and payments on loans until the end of 2020
Will she get her 6 month deferment on interest and payments after the Cares Act ends or will her loan go into repayment at the end of 2020?
Hope that makes sense!
@deb922 , the CARES Act actually keeps interest from accruing for all covered federal loans until the end of 2020. Normally, your D’s loan would be accruing interest while she is in school and/or in grace period; the Act temporarily halts that interest.
The other part of the CARES Act that relates to loans is that payments are suspended until the end of 2020. The only way that affects your D would be if she graduated (or left school or dropped below half time) last spring & her 6 month grace period is up this fall. In that case, the loans would not go into repayment until January 2021.
Thanks @kelsmom. I was thinking grad school loans were like parent plus and repayment started right away. She’s working so will be paying back her loans before she’s done with the program.
Appreciate the fast answer. It’s been awhile since we had anything to do with school loans
My kid has Loans in this situation. She does not have interest accruing right now and is not required to make payments at all. But she is making payments anyway. She has smaller undergrad loans that will be completely paid off before December.
Note that payments will first be applied to interest, she was told, during this time. But that’s OK with her. Getting a pause on her professional school loan repayment is what is enabling her to completely pay off those smaller undergrad loans.
@kelsmom between me and my wife, we make around 250k together. are we eligible for any loans?
Actually, @deb922 , if she has Grad PLUS loans, there is no grace period. (But interest and repayment are on hold until the end of the year.) There is one for the graduate unsubsidized loans. Many grads request a forbearance for their Grad PLUS loans don’t that repayment start aligns with the unsubsidized loans. But that does need to be requested.
@Jack2021 , every student who is eligible for federal aid (US citizen/permanent resident, not in default on federal loans, etc) is eligible to borrow an unsubsidized loan ($5500 freshman year). Even extraordinarily well off people can do that. Depending on the FAFSA-determined EFC, the school’s cost of attendance, and other financial aid, some of that $5500 might be offered as a subsidized loan rather than unsubsidized (up to $3500). Their parents can borrow Parent PLUS loans up to the cost of attendance minus any aid the student is receiving. Parent must pass a credit check that is focused on bad credit (that is, good credit is not the focus).
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In order to apply or fill the FAFSA application, does my son needs to confirm the college first?