We have received plenty of feedback in the days since my opinion piece, The 8 Most Confusing Things About FAFSA®, was published in the New York Times’ “On Campus” section. That feedback, overwhelmingly positive, has come from students, parents and those who share a similar desire to help individuals complete the FAFSA®.
At Frank, we are open about our belief that the complicated nature of the FAFSA® application should not be a deterrent to those seeking financial aid, nor should it deter anyone from asking questions about the financial aid process. That’s why we’re always eager to engage with students and the media alike to keep the conversation going.
It turns out the change in the tone of the conversation surrounding the FAFSA® to positive and approachable one was noticed by many, and we were grateful to hear that. The business of distributing $120 billion a year in federal financial aid isn’t easy, but there’s no reason walking students and families through the process should be equally difficult.
Some of the people who have reached out to us and the NY Times’ editorial staff sought further clarification about what was written. I’d like to use this space to offer that clarification.
State Aid and the FAFSA®
While the FAFSA® is the designated application for federal student aid, many schools will use the information provided on a student’s FAFSA® to determine how much aid they are willing to offer a student that come from school and state funding. In fact, some of the questions on the FAFSA® only exist to help schools distribute state funds.
It’s important for students and their families to be aware of what their schools and state require from the application. Some schools have their own deadlines, while some states can be particular about the order in which state universities appear on the application.
Once a FAFSA® is completed, the FSA generates the student’s Expected Family Contribution, commonly referred to as an EFC score. The EFC score is derived from a complicated formula, and is the figure used by schools to calculate their financial aid offers. The lower the EFC score, the more financial aid a student is eligible to receive.
You can read through the FSA’s 36-page EFC formula here, but the most actionable information is this: 20% of a student’s income and assets are factored into the EFC score, while 5.67% of parental income and assets are factored into the equation.
When planning ahead, it’s important to be mindful of those numbers. Should an opportunity arise to shift an asset from a child to a parent, or a parent to a grandparent (those assets don’t show up at all on the FAFSA®), it may be worth considering.
FAFSA®’s Dependency Rules
Perhaps nothing on the application leads to more confusion than the FAFSA®’s guidelines for determining dependency. Broadly speaking, the FAFSA® tries to separate students into two categories: students who are expected to be financially dependent on their parents, and students who are expected to be financially independent from their parents. Dependent students are required to report their parent or parents’ financial information, while independent students are not.
What can be frustrating for students and families is that expectation does not equal reality, and whether or not a student is financially dependent is not a factor in the FAFSA®’s dependency determination.
The end result is that a number of dependent students are unable to get their parents’ information, which means they can not file a FAFSA® to receive financial aid to pay for school. Such students are allowed to file a dependency override through their school so they may be considered independent. Those students should not feel discouraged as most should still receive aid once the dependency override is approved.
When approving a dependency override, schools make a distinction between parents who are not capable of providing their information (through absence in the student’s life) and parents who are unwilling to provide their information. Only students who are able to prove they meet the first criteria will receive a dependency override. Most schools require written statements from the student and from adults in the community who are considered capable of confirming the student’s family situation before they will grant the override.
FAFSA® in Joint-Custody Divorce Cases
The last thing I would like to further clarify is the specific case of divorce with joint-custody arrangements. The FAFSA® asks that students in joint-custody arrangements include on their application the parent who provides greater financial support. That being said, if it can be supported, you should always include the parent who makes less money as the primary parent.
The best advice we can give any student or parent is to read carefully the questions on the application before answering. Providing accurate information on the FAFSA® is essential for students to receive the financial aid they deserve. During the financial aid process, some students may be selected for verification, where they will be required by their school to provide documentation to confirm the information they entered is correct. Providing the right information on the application makes verification much more tolerable.
The FAFSA® is a challenge to navigate, and our goal is to make that process easier. Nearly half of eligible students fail to file their FAFSA®, resulting in approximately $3 billion in unclaimed aid every year.
Our aim when we talk to applicants, school counselors and the media, is to explain the FAFSA® in language that everyone can understand. We want to demystify the FAFSA® and all of its difficult-to-understand logic.
We encourage anyone with questions to reach out to us on social media, or through our many support channels. Frank is here to help you complete your FAFSA® and receive the financial aid you deserve.