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College Planning

Donna Cournoyer
In College Planning

Ready, Set… Wait for the New FAFSA

Roughly 18 million college students apply for financial aid each year through the Free Application for Federal Student Aid. The U.S. Department of Education develops the FAFSA form and disburses aid to students at 5,600 colleges and career schools each year.

The FAFSA is also used by colleges and universities to determine eligibility for their own free grants and scholarships.

Due to the implementation of extensive changes based on the FAFSA Simplification Act, the Department of Education delayed the usual October 1 launch date to December this year for the 2024-2025 application. The exact date has not yet been released.

Changes to the form began over the last three years and some of the more impactful changes will occur on the 2024-2025 FAFSA form.

What this means for students who are applying now to college for admission for the fall of 2024 or who are current college students, is that their aid eligibility may be affected. Some changes are expected to help students, and some are expected to have a negative impact on eligibility.

It also means that schools which have historically released earlier financial aid offer letters to freshmen applicants, will likely be scrambling to review the FAFSA applications once the form opens and may have to delay their offer notifications to freshman.

Some of the FAFSA changes that may have a negative impact on student eligibility are:

  • The number of family members in college is no longer a factor in the need analysis. The “sibling discount”, which could make a student eligible for more aid, is going away. However, based on comments from administration officials from a sampling of schools that use the CSS Profile, many colleges likely will continue to give some form of sibling discount.
  • The net worth of a business is no longer limited to those with more than 100 full-time employees. Applicants must report the net worth of all businesses.

Some of the FAFSA changes that may have a positive impact on student eligibility or be a benefit to students are:

  • The FAFSA will have significantly fewer questions.
  • The FAFSA EFC (Expected Family Contribution) name has changed to FAFSA SAI (Student Aid Index) which helps avoid confusion as this number is for determining eligibility and is not associated with what a family or student “is expected” to pay.
  • Some untaxed income items have been eliminated such as: payments made to tax-deferred pension and retirement plans that are paid directly or withheld from earnings; money received by or paid for on behalf of the student; and veterans’ noneducational benefits.
  • For dependent students, education savings accounts will only be counted as a parent asset if the account is designated for the student. Previously, if a parent had education savings accounts for other children, the value of those were also required to be counted.
  • Students may now list up to twenty colleges on the form, rather than the previous ten.

One important outcome of the FAFSA change is unclear: how schools will adjust aid (or not) for current students. Students and families will have to wait and see how the new FAFSA, and their school’s policy changes, will affect their financial aid for their remaining college years.

One Final Note about the FAFSA Form: every student should complete the FAFSA form. Free money can be left behind if a student does not submit the form, especially in year one.

Some colleges require the form to be submitted to qualify for a merit scholarship, even though it is not need-based. Also, some colleges award additional grants in the form of free money, just for completing and submitting the FAFSA, regardless of eligibility.

You can register here for an FSA ID and use the same link to complete the FAFSA when the application opens.

Parents of students applying for admission for Fall of 2024 can use the Net Price Calculators on their schools’ websites to get an idea of eligibility before the FAFSA becomes available.

You can also receive a College Money Report (for three schools on your list) by visiting the Resources page on the Moore Financial Advisors website.

We will post updates on the FAFSA release date when they are available.

 

 

Donna Cournoyer
In College Planning

Federal Student Loan Repayments Resume

The US Department of Education’s COVID 19 relief for Federal Student Loans is ending soon and roughly 1 in 8 Americans will have to restart their loan payments as soon as October.

Interest resumes on September 1, 2023, and payments will be due starting in October 2023.

If you are a parent of a young adult who graduated during the past three years of the COVID 19 loan repayment pause, these students may have never been required to make a payment on their Federal Student Loans until now.

If you have a Federal Student or Parent Plus Loan, or if you are the parent of a recent college graduate, here are ways to prepare for the loan repayment start up:

This is a good time to check in with young adults and discuss their loans. Don’t assume they are aware of the repayment start and what to do.

Be sure to let them know that they must watch for communications from their servicer for a bill. You can be a resource to help them remain in good standing and on track to pay off their loans on time.

Anyone with outstanding Federal Student loans, which include Federal Direct Stafford Student Loans, Federal Direct Graduate Student Loans, Graduate Plus Loans, and Federal Parent Plus Loans, should prepare for repayment (unless you kept up payments during the pause).

Below are steps you should take in August and September.

By logging in to your FSA (Federal Student Aid) dashboard with your FSA ID and password, you will have access to the information you need.

Here are some specifics:

  • Log on to Federal Student Aid, and update your contact information, including mailing address, email, phone; you can also update your information with you loan servicer using this link
  • Confirm the status of your loans, total amount you owe, and the current servicer (government agency handling your repayment)
  • If you are repaying Student Loans for the first time, here is a step-by-step plan with links to be sure you are set up for your first payment: FSA: Repaying Student Loans for the First Time

Watch for communications regarding your loan: your bill, payment amount, and due date should arrive at least 21 days before your due date.

A smart way to save on interest is if you set up auto-pay so you will save 0.25% on your interest rate.

If you were on an income-based repayment plan, or want to explore more affordable plans information is here: FSA Income-Driven Repayment Plans

Important Note: If you choose an income-driven repayment plan, this will extend your repayment time, and interest and total amount to be repaid.

More information on the repayment start can be found at: Federal Student Aid-Managing Loan Repayment

Here you can find more information on:

 If you have questions about the Federal Student Loan repayment restart, or would like to discuss your situation with regard to paying for college, Donna is available to help.

 

 

 

Donna Cournoyer
In College Planning

Preparing to Pay the First Tuition Bill

If you are a parent of a young adult who will soon head off to college for the first time, you have likely had an emotional and hectic year. Making a commitment to a school for your student’s education is a big step.

Congratulations on navigating a complex process and reaching one of life’s major milestones!

One of the more important communications from your student’s school, arriving soon, will be the first semester bill for tuition, and room and board. Any merit scholarships or aid awarded to your student should show as a pending credit on the bill.

Schools generally send two bills per year, and payment due dates are usually around the beginning of August for fall semester and December for spring semester.

Early summer is an appropriate time to review your college financial plan, and a good place to start is by considering all available resources, including:

  • 529 plan balances and other savings
  • Gifts from relatives
  • Private scholarships awarded to your student
  • Flexibility in your budget for making monthly cash payments
  • Loans, including Federal student loans and private loans

If loans will be part of your family’s financing picture, it’s wise to consider using the Federal Direct Stafford Loan – all students are eligible.

Loans maximums are set by the U.S. Department of Education, and they range from $5,500 for the freshman year, to $7,500 for the senior year.

The federal student loan benefits include:

  • fixed interest rate (and likely lower than a private loan)
  • no credit and no co-signer needed
  • multiple repayment and forbearance options during repayment
  • six-month grace period after graduation (or continued deferment if the student is in a qualifying, half-time graduate program)
  • Public Service Loan Forgiveness programs

Of course, it is a personal and family decision whether or not your student will borrow to help pay for college.

For access to Federal loans, you and your student must complete the Free Application for Federal Student Aid (FAFSA).

Even if you don’t want your student to have debt after graduation, Federal student loans are still worth considering, because:

  1. taking the federal loan will help your student establish a payment history and a credit score
  2. you’ll have the option to pay off the loan at graduation, or sooner
  3. if you have the need to appeal for financial aid while your student is an undergraduate (due to a job loss or other unfortunate circumstance), the college’s financial aid officers are likely to look more favorably on your situation if your student has previously accepted the ‘self-help’ loan

For more information on Federal student loans, yearly loan limits, interest and payment calculators, and Public Service Loan Forgiveness, check out:

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