Monday, October 31, 2011

"Well, that depends."

When you ask a question to a financial aid administrator, what is the usual answer? “Well, that depends.” This is a common joke among the financial aid community, but there is a lot of truth in it. Your financial aid depends on many factors, which include: day or evening program, number of credits, academic status, grade level, and satisfactory academic progress. On top of all that, all of these are subject to state and federal regulations.

The regulations are what really make financial aid so difficult. Financial aid rules change every year, which means staying current on the rules is nearly a job by itself.

The government is so tough on financial aid because they want to keep track of tax payer dollars. The Pell Grants and Direct Stafford Loans come from the pockets of everyone in the form of our tax dollars.

Since there are so many factors that must be considered in financial aid, things take a little bit of time to make sure there are no rules being broken. In life, we must get used to change. Unfortunately for you the student, financial aid can change as often as your socks.

(Originally published in the Metro Business College Arnold Newsletter - April 2011)

Friday, October 21, 2011

New Pell - 2011-12 Award Year

In April, a government shut-down was looming if a deal wasn’t reached on the Federal budget, and after numerous short-term extensions, a deal was finally reached. But what does this mean for you? Out of all the cuts in the new budget, the cut to the Pell Grant program is most significant for our students. The maximum Pell Grant a student can receive won’t change; the maximum will stay at $5550 for the year, so that does not change. So, what’s the big deal?

The award year (beginning July 1, 2011, and ending June 30, 2012) will eliminate the “year-round Pell.” I will use $3000 total in Pell as an example. To understand what this means, you must know that one third of your Pell Grant ($1000) comes to the school each quarter. So, if you attend school during the July, October, and January quarters, then your entire Pell Grant has come in. April is still in that award year, and with a year-round Pell, you can get another disbursement of Pell for April, even though all your Pell has come in already (which would be a total of $4000). The new rules get rid of this extra quarter.

The only good news is that this only affects students who are enrolled for all four quarters between July 1 and June 30 (July, October, January, and April quarters). Hopefully there will be enough done in the next year to allow the year-round Pell to return. If you have any questions about how this will affect you, stop in at the Financial Aid Office for more information.

(Originally published in the Metro Business College Arnold Newsletter - July 2011)

Monday, October 17, 2011

What is an EFC?

If you've filled out a FAFSA before, you might recall seeing an EFC number when your FAFSA was completed. When you submit your FAFSA online or in the FA Office, you will see an EFC. You will also see your EFC when your Student Aid Report gets mailed or emailed to you.

EFC stands for Expected Family Contribution, and this is what you are expected to contribute to your education. The most important thing for you to remember about the EFC is that depending on what your EFC is will determine how much Pell Grant you will receive. The lower the EFC, the more Pell you qualify for; and the higher your EFC, the less Pell Grant you will receive. Each year, the EFC's relation to the amount of Pell Grant changes, so even though your EFC doesn't change from year to year, the amount of Pell you qualify for may change.

Your EFC is also used in determining your need-based loans. Your need-based loans are figured using your Cost of Attendance and subtracting your EFC and any other FA. The resulting amount is the amount of need-based loans you can qualify for.

In case you're curious, your EFC is calculated based on several factors from your FAFSA: AGI, taxes, earned income, untaxed income, tax credits, exemptions, number in household, number attending college, etc. If you are an independent student, you and your spouse's information is used. If you are a dependent student, then your parent's information is used along with yours.

So, as you can see, the EFC is more than just a number!

Tuesday, October 11, 2011

The Financial Aid Corner

Welcome to the Financial Aid Corner! Financial Aid for college is incredibly difficult to understand and keep up to date. Every year there are changes made which may be completely different than the previous year's rules. Think of the Financial Aid rules like a model of a car and the Department of Education as the car manufacturer. Each year the manufacturer releases a new edition of an existing model, and when they do, sometimes they change very little and sometimes they change a lot. Some models are discontinued, just like some rules are discontinued.

It's difficult to keep up with the rules even if you are in the industry because there are so many rules, you would only want to focus on the rules that deal with your situation specifically. The goal of this blog is to inform you on some of the intricacies of Financial Aid and hopefully to inform you on a wide range of subjects. As mentioned above, Financial Aid can be very complicated: there are exceptions, exceptions to exceptions, and once in awhile exceptions to the exceptions of the exceptions.

And I have to include a few disclaimers:

This blog is meant to inform and educate; it is not meant to be the sole answer for any particular situation. Every person's Financial Aid is unique to them, and therefore may not be fully explained through any post that will be found here. No blog posting should be taken as a cited source for any particular situation. The best thing for you to do as a student is to check with your Financial Aid Office. Rules are unique sometimes from school to school, so the way one school might take care of a situation may not be how another school could. And if you're an FAO checking this blog out, then always go back to the FSA Handbook and the Dept. of Ed. for guidance. I personally always err on the side of caution, so don't quote me, since I don't know everything, but then again, in FA, who does? I should also add that no student names will be mentioned on this blog, although some real situations might be used as examples; however, these real situations will be interspersed with fictional situations. The purpose is to give examples so that you will better understand the topic.