slow to respond financial aid office causing issues & unreported parental income on FAFSA.

Paying for College
1

Hi,

To give a little background on the situation, I’m currently currently a sophomore at a state college in where I receive in state tuition. I am a first generation college student and I work part time and support myself while at school and full time during breaks. My parents do not contribute at all to the costs of my education. However, I am a dependent student because of FAFSA regulations (which I think are incredibly ridiculous but that’s not the point of my post). For the 2015-2016 school yeah I was selected for verification which was easily completed by sending in a copy of my parents tax return. In the 2015-2016 school year I received enough aid to cover 90% of my tuition and had to take out a loan for the rest however I ended up paying that off by the end of the school year.

This year, however, the never ending saga of FAFSA verification started with me being required to submit a non-filing letter which the IRS assured me multiple times would come in 7-10 days (that was in March and that letter still has yet to arrive) and in the end when the online options did not work forcing me to go to the IRS office just to get this letter in before the due date only to find out that they needed more documents. None of them were from me though, they were from my parents including copies of my mom’s w2’s (she has two jobs) as well as a tax statement from my parents and a copy of my parents tax return form they also requested information about stocks that my parents apparently have (I at the time had no knowledge of these stocks but apparently my mom gets stocks from one of her jobs and my dad has old Publix stocks from when he used to work there years ago). First they asked me what the value of these stocks was and assured me that they only needed to know the value of these stocks. (I asked them directly (via email because it was summer by this point) by this time if they needed any paperwork to prove the value of these stocks or just the value) turns out they needed the stock statements (and took an entire month to tell me this, so by the time that I was able to respond it was months past the FAFSA verification deadline.

This saga extended into the school year to the point where my verification was still in process until this week despite the fact that my school’s fee payment deadline is tomorrow. At this point, the school gave me the option of either praying that my FAFSA came through before Friday, or doing a payment plan which meant that I would have to pay half of the tuition I owed before FAFSA and then the rest in installments. Luckily my FAFSA came through before the deadline however, I got very little money from FAFSA compared to last year where I only paid about 10% of my tuition via private loan this year after FAFSA I still owed about 50% of it.

tdlr; my financial aid office responded so slowly that I was still in the process of being verified when school started. (My school started two weeks ago) My question here is, did this late submission of my FAFSA due to a long and drawn out verification process caused me to get less financial aid than I should have and what do I do to stop this from happening next time?

With my enrollment in this school on the line I took out a loan to pay for the rest of my tuition (my next question is was this a smart move on my part?) and my financial aid office emailed me this morning to confirm that I wanted this loan to be processed. I confirmed and I asked them if this would mean that I successfully paid the school what I owed before the fee payment deadline.

The financial aid office emailed me back saying that due my parents having some unreported income on the FAFSA (or on their taxes I’m not sure which it’s possible both because my dad worked under the table for a bit in 2015) that I (and I would like to empathize that I because I think that language in their email is dismissive of the fact that these are my parents taxes, and their information that I had no part in filling out on the FAFSA) should have reported my pell grant was reduced and I still owed $300.

So, (because there is a major hurricane coming and my school is shutting down as of tomorrow and my school decided that they were not going to extend the deadline to pay any fees that students owe) I went to the business office at my school to pay this $300 earlier this afternoon. However, they informed me that because of the unreported income (which I would like to point out again that I had no part in the fact that this income was unreported) I was expected to repay pell grants that I received last year. The woman at the office allowed me to pay the $300 that the financial aid office told me that I owed and told me that if I owe anything else we will deal with it when the school opens up again and that she would waive the late fee that I would receive at that point for paying past the deadline.

At this point I am wondering what can be done about this situation? Can the school actually force me to pay back the pell grants that I received last year despite the fact that I got verified last year as well and they didn’t catch the mistake then? And what should I do in the situation that the school insists that I have to pay them despite this probably being their fault. (They’re the ones who didn’t fill out the FAFSA correctly not me).

I am 100% sure that my parents can not (and would not even if they could) contribute any money towards paying retroactively for these pell grants. When I told my parents I had to pay $300 because of their unreported income my dad apologized to me but didn’t offer to help at all.

Sorry for the long winded explanation I’m not sure how this forum works but seeing as how this is my first post here I figured that as much detail as possible would help people to understand the situation.

Thanks.

2

If your parents had unreported income…and this had now been added, it is very possible,that you no longer qualify for the level of aid you got previously.

If you received aid last year…and it was because of inaccurate FAFSA info, yes, the money needs to be paid back. You were not entitled to it.

I know this sounds harsh…but it is YOUR responsibility to make sure the info on the FAFSA is accurate. You and your parent actually use your PIN to sign saying that the info is accurate.

It is the school’s absolute requirement to verify that your information is accurate ifmthey choose you for verification…and they did. They found some added income and therefore, your aid was reduced.

Your 2016-2017 FAFSA also used 2015 income…so yes…the school is required to ask for repayment.

@kelsmom do I have this correct?

It sounds like your 2016-2017 and 2017-2018 FAFSA forms did not have some income listed that was supposed to be.

I won’t even comment on the working under the table issue…which is a whole other issue.

3

@thumper1 he doesn’t work under the table anymore (long story short my parents aren’t exactly rich so he was doing what he had to do to make ends meet). Anyway, the value of my parents stocks that I was asked to submit via the verification process was less than $1000. I can understand then that the pell grant would decrease by $300 as that seems reasonable because the stocks (which I’m assuming are the unreported income that the financial aid office is talking about) were not that valuable. However, I don’t really understand them asking me to retroactively pay for the entire pell grant when I assume (but I could be wrong in this assumption) that had the income from these stocks been reported I still would have at least partially received.

4

You need to go into your financial aid office…and talk to someone in person…and ask.

Make an appointment.

They should be able to tell you what happened.

What other forms of aid did you lose?

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@thumper1 as far as I know that is the only form of aid that I lost. Which leads into my first question, and theory, being that because my verification process was long and drawn out that I didn’t get as much aid that I should have. I have heard that students who submit the FAFSA late get less aid but is that true?

The financial aid department at my school is woefully inadequate, (i’m not trying to make excuses because I’m going to go but they’re only open from 1-5 m-f which is super inconvenient and ridiculous) and like I said I’m a first generation student and have no experience with this other than my experience last year so I wouldn’t even know what to ask them. Do you have any advice on what to ask them?

6

The Pell Grant is an entitlement. This means…you get whatever amount you are entitled to regardless of when you submit your FAFSA form.

Did your school change your FAFSA form? What was your old EFC? What is it now?

How much Pell Grant did you get? Was your EFC $0?

7

My EFC went down this year could that be because this year my parents have two children in college as opposed to last year when I was the only one in college?

8

Yes, your EFC would be roughly half if your parents have two kiddos on college at the same time.

BUT this doesn’t mean your aid would increase.

Again I ask…what is your EFC now?

How much Pell Grant money did you lose?

What is the cost of attendance at your college?

Did you also take the Direct Loan of $6500?

9

@thumper1 sorry I am late to respond I have been preparing for Irma.

The cost of attendance at my college is around 20,000.

My EFC was $3800 last year and now it’s a $2639 so roughly half of what I had last year, correct. Last year my financial aid covered everything except my EFC which I had to take out a private loan to cover because my parents do contribute to the costs of my education. However this year my financial aid covered only roughly half the cost of attendance, leaving me with a gap of 9,800 and change not covered by my financial aid (of which I took out a private loan to cover a chunk of because my school was threatening enrollment if we did not pay by the deadline which was Friday, however I was able to pay 3,000 out of pocket from money I saved up) Last year I received a Pell grant of 1800 and change. This decrease in the pell grant ($300) does not explain the amount of aid I lost from last year to this year especially since both aid years used the same 2015 taxes. My parents unreported income was only from a small amount of stocks totaling less then $1000 which again does not explain the drop in aid.

I did not know that the direct loan existed until I read about it here, however, it looks like I got 5,500 as a mix of subsidized and subsidized loans last year, which I am assuming is the direct loan. This year however, I only received 5,500 in subsidized and subsidized loans of what I am assuming should have been 6,500 because technically this is my second year at school.

Since I just learned about the 5,500 direct loan I am wondering should I have gotten a larger one last year because I entered this college with my associates degree which I earned from dual enrollment which means that I entered with enough credits to be a junior or does the fact that that was my first year at a state college not entitle me to a larger direct loan?

If this hurricane does not totally destroy my school (my school is basically in it’s direct path so fingers crossed) I plan to go to the financial aid office as soon as possible to ask for an explanation however, I do not even know where to begin. Could you give me some advice on where to start and what to ask?

Thanks.

10

The $5500 is the direct loan. Of that $2000 will be unsubsidized. Sophomores CAN take $6500, but if the school doesn’t have you classified as a sophomore, you won’t get that amount. If you do have enough credits to be a sophomore, you can ask for the increase. You can’t go back and get that amount now that you think you should have borrowed last year, but you can ask for an increase for this year if you are now a sophomore by credits.

Your drop in Pell grant of $300 is less than your EFC drop ($3800-2639). Why do you think that’s wrong?

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@twoinaddone - I don’t think the pell grant drop of $300 is wrong, that seems correct considering the circumstances if it came across that I was saying the $300 seemed wrong I apologize. The thing I was confused about was the fact that my school is asking me to retroactively pay for Pell grants from last year. I did not know that this was something that they could ask me to do because of my parents mistake on the FAFSA leading to the school discovering that my parents had some (under $1000 in stocks) unreported income (which I had nothing to do with).

12

If the EFC drops, shouldn’t the Pell grant increase?

If it was a msitake on your FAFSA, it may very well impact the aid that you receive. It does not matter who is responsible for the mistake. If it is discovered that too much aid was disbursed because of an error on the FAFSA, it’s perfectly reasonable and appropriate for the excess aid to be recovered from the student. It wasn’t rightfully yours. You don’t get to keep it.

13

Think of the verification of the FAFSA as a tax audit - if mistakes are found, you have to repay any amounts advanced to you in error.

I don’t know where your school is in Florida, but it is unlikely to reopen next week. My daughter’s school is already cancelled through Thurs but I bet the gets extended, and she’s not in the Irma zone (just tornadoes and heavy rain), but no one can fly back to Florida until there is electricity and the roads are cleared. This is going to be a very low priority. Don’t drive yourself crazy trying to fix it this week.

14

If you took out direct loans last year, or the first year you took them out, you would have been required to do entrance counseling and sign master promissory note. Also your parents could have taken out a parent plus loan rather than a private loan for the remaining amount.

15

@mommdc what is the difference between parent plus loans and private loans?

My parents have no interest in being involved in financially supporting my education, and have awful credit scores would that have an affect on things?

16

A parent Plus loan is issued through the school, and guaranteed by the federal government. There is one interest rate, and qualifying for the loan is very easy. You don’t have to have good credit, just can’t have bad credit, and the debt to income ratio isn’t a factor. It is a loan to the parents, and the student is not involved except to the extent that there actually has to be a student and the loan is based on the student’s cost to attend that college. The student do NOT have to pay the loan.

A private loan is issued by a bank or other non-government entity. Interest rates are based on what the bank considers important and they do consider debt to income ratio. Sometimes the loans are made to the student with the parent as the co-borrower.

17

Knowing that I have to repay the pell grants is stressful because at this point I have no way of retroactively paying them back. The only thing that I can think to do is to increase the amount of my private loan/taking out another one which I am hesitant to do because I believe at the current amount that I took out I can afford to pay it back in a reasonable amount of time. However, if I were to need to take out more I think it would make me feel in over my head. The school has shifted the fee payment deadline to next Thursday and it is my understanding that since I still owe these pell grants that if I do not pay for them I will be charged a late fee and or my classes will be cancelled. I cannot ask my parents to help because they will not and can not in their current financial situation especially with the added stress of repairing hurricane damage.

The only payment plan that my school offers is near pointless as they expect you to be able to pay 50% of your remaining balance at one time and then the other 50% before midterms which is only a little bit more than a month away and it requires a $15 dollar fee as well as 3% the amount of the payment.

Can someone offer me any advice if this is the situation? I’m considering just taking a year off to sort this out, my parents would more than likely support this as an option but I do not know how it would affect everything in the long run.

Upon looking further into the situation I noticed that I did not receive any scholarship/grant/aid money from my college this year while last year I was awarded some. I have not failed any classes and have a good academic standing which leads me to believe that I have not done anything personally to cause this decrease. I have heard however, that some schools offer less aid to second and third year students but do not know if this is true or not?

When I was talking with my roommate about the details of my situation she told me that in the process of being verified last year the financial aid office was also slow to respond which caused her to lose out on some aid as well and some other students have reported issues with the financial aid verification process which I am not sure of the specifics. I was wondering if this could have happened with my aid and what would be my course of action here?

I’d also like some advice on how to not get involved in a situation like this in the future if anyone has any. Thank you.

18

@BelknapPoint - I thought my pell grant would increase as well to help cover the decrease in my EFC also maybe because of the unreported income there is some math that is missing here/

@twoinanddone - for a variety of reasons my parents refuse to be involved in giving me any money for my education. So I don’t think getting a loan in their name is possible.

19

If you can’t pay for your current semester, then you need to withdraw from classes, if it is still in the add/drop timeframe, where you would not owe them any money for the semester.

Then figure out what you owe them for the aid you were over awarded last year, because of underreported income.

Then get a job and pay off that balance.

Then find out how much aid you qualify for and provide all documents to them right away, when you go back to school.

20

@mommdc - I am before the add drop date at the moment, I believe and leaving has been something I’ve been considering. I have a job and if I were to leave school now I’d likely spend that time working two jobs which would allow me to save money for another year at school. However, my concern with taking that route is that it will impact my aid for future years. I already know that I am likely to get less aid for the 2018 school year because in 2015 the only income to be reported on the FAFSA was my mothers. In 2016 however both my father and I had jobs which will probably result in a higher EFC for that year. If I were to work full time for a year in 2017 I’m worried that it would impact my fafsa further fr future years. I’m also concerned with what would happen with my loans, the stafford loans I got through fafsa appear to have to be paid off 6 months after leaving school, would I have to pay those back while on leave from school?