Ask the Edvisor®

If you were denied student loans because you have maxed out both your federal and private student loans, these are the options available to you.

If you're unsure about attending college, should you file the FAFSA? The Edvisor weighs in.Read More

There are two FAFSA forms available on the website. Which one should you file? The Edvisor weighs in.Read More

Many students live with relatives who are not their legal parents. We address how the FAFSA should be completed in this situation. The Edvisor answers.Read More

Each year's FAFSA uses tax information from the prior-prior year, but what if it doesn't reflect your current financial situation? The Edvisor weighs in.Read More

Charges from previous periods of enrollment are known as prior-year charges. What can you do to pay them? The Edvisor weighs in.Read More

If you're planning on going back to school for a second undergraduate degree, should you complete a FAFSA? The Edvisor weighs in.Read More

Student loans can be used to pay for costs included in a school's cost of attendance, but does off-campus housing qualify? The Edvisor answers.Read More

Does enrollment status affect financial aid eligibility? Can only full-time students get financial aid? We break it down here.Read More

Should you wait until you graduate to get married? Will you lose your need-based aid if you get married? You've got tricky questions. We've got easy answers. The Edvisor tackles this topic!Read More

Since 529 plans can significantly reduce eligibility for need-based aid, the family will want to find a workaround that reduces the harmful impact on aid eligibility. Here are several ways to do this.Read More

When comparing financial aid award letters from difference colleges, calculate the net price of each award.Read More

The FSA ID serves as an electronic signature for U.S. Department of Education documents, including the FAFSA. 
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Loan amounts, along with 529 plan distributions, may not exceed the college's cost of attendance (COA). So long as the total does not exceed COA, it should not reduce your Direct Unsubsidized Loan and Grad PLUS Loan amounts.

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The repayment of a Parent PLUS Loan may be deferred whenever the student is enrolled on at least a half-time basis.Read More

Prior Prior Year (PPY) refers to the year before the prior tax year. This change for the 2017-2018 academic year will better align financial aid applications with the start of the college admissions season.
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Here's how to reorder your list of colleges when filing your 2017-2018 FAFSA, even if you've already submitted it.

All colleges must adjust the need-based financial aid package when a student wins a private scholarship. But, each college can choose how to adjust the financial aid package.Read More

While most colleges and universities use the FAFSA for awarding institutional aid, some supplement the FAFSA with other financial aid application forms.

No. Student loans are not included in the definition of a qualified higher education expense for 529 college savings plans.

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The easiest way to make changes to your FAFSA is to log in as a returning user at FAFSA.ed.gov using your FSA ID. On the My FAFSA page, click “Make FAFSA Corrections.” Go to the “School Selection” page to change the order of the schools listed, or to add or delete schools.

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Graduate students are independent, so parental information is not required. Some graduate schools require students to submit parental information for awarding the school’s own financial aid funds. This is especially common among medical schools and law schools. If parent information is submitted, it will not affect eligibility for federal and state aid.

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Financial aid application forms, like the FAFSA (Free Application for Federal Student Aid) and CSS/Financial Aid PROFILE, use a snapshot approach with regard to assets. In other words, the asset valuation is as of the date the FAFSA or CSS/ Financial Aid PROFILE is filed. From a practical perspective, this means the valuation as of the most recent statement prior to the FAFSA or PROFILE filing date, though these days people can also login to their broker’s web site and print out a current valuation.

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The grace period can be thought of as a “waiting period” which affords a student loan borrower time before he or she has to start repaying his or her federal student loans. Grace period begins when a student loan borrower graduates or drops below half-time enrollment.

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The answer to this question depends on whether the loans are federal or private. Statutes of limitation specify the maximum number of years after a loan goes into default during which the lender can sue to recover the debt.

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Unless you are wearing the jewelry or tattoo for religious or cultural reasons, you should probably not wear it to an interview. Although body modification, such as nose rings, tongue piercings and tattoos, is growing in acceptance, there is always a risk that the interviewer will be offended or distracted by it. Avoid giving the interviewer an excuse to deny you the scholarship.

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There is very little financial aid for international students to study in the U.S., just as there is very little financial aid for U.S. students to study in other countries. Most students must rely on resources from their friends, family and sponsors to pay for college in the U.S. There may also be money available from businesses, foundations, the government and religious groups in their home country.

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Yes. Many financial aid professionals will incorrectly answer “no.” Their intuition tells them that the repayment obligation may be deferred only during the student’s initial in-school period. Their reasoning may be influenced by other restrictions on the Parent PLUS Loan, such as the loan being available only for a dependent student’s undergraduate education. But, a careful reading of the law and regulations clearly indicates that the repayment of a Parent PLUS Loan may be deferred whenever the student is enrolled on at least a half-time basis. In this case, intuition is wrong.

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The annual loan limits on the Direct Unsubsidized Loan range from $5,500 to $7,500 for dependent undergraduate students and $9,500 to $12,500 for independent undergraduate students. The cumulative loan limits are $31,000 for dependent students and $57,500 for independent students.

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Federal rules require a college to award a student the maximum Direct Subsidized Loan amount for which the student is eligible before certifying any Direct Unsubsidized Loans. The only exception is when the amount of the subsidized loan would be $200 or less, in which case the college may include it in an Direct Unsubsidized Loan, up to the loan limits. Since subsidized Direct Loans are not subject to a fixed pool of funding like the Perkins Loan and some institutional loans, there’s no reason why a college would not award a Direct Subsidized Loan to an eligible student.

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Grandparents cannot borrow from the Parent PLUS Loan program for the benefit of a grandchild unless they have legally adopted the grandchild. Grandparents who are a legal guardian to a grandchild but who have not adopted the grandchild are also not eligible to borrow from the Parent PLUS Loan program. If a student is or was in a legal guardianship (as determined by a court of competent jurisdiction in the student’s state of legal residence) prior to reaching the age of majority, the student is considered to be an independent student.

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If the borrower of a federal student loan dies, the loan is cancelled. For example, if the borrower of a Parent PLUS Loan dies, the debt is discharged. It will not be charged against the borrower’s estate, nor is the cancelled Parent PLUS Loan debt treated as income to the student or the surviving spouse, if any.

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There are several possible strategies for how to use a 529 college savings plan to pay for college. One strategy involves using as much of the available funds as possible during the student’s first year in college and the rest, if any, during the second year. Another strategy involves spending the money in equal increments over the student’s college career. For example, this strategy would spend one-quarter of the money each year for a student enrolled in a four-year degree program. Which of these strategies is better?

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A typo in the Social Security Number field on the FAFSA can cause major problems with college financial aid. Find out how to correct this FAFSA error.

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Accept the offer of admission from the college with the merit scholarship and pay the deposit by the May 1 deadline. If you ultimately enroll at the wait-listing college, you will lose the deposit, but the odds of admission off of the waiting list are slim to none. You won’t know whether you are admitted off of the waiting list until after May 1, so you have to choose one of the colleges that admitted you now.

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When a mortgage lender evaluates a homeowner’s eligibility to refinance a mortgage, the lender considers all debts for which the homeowner is responsible. This includes cosigned loans, such as a cosigned private student loan. A cosigner is a co-borrower, equally obligated to repay the debt. The cosigned loan shows up on the credit history of the cosigner, not just the primary borrower. Delinquencies and defaults will damage the credit scores of both the borrower and cosigner.

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“Nothing prevents parents from helping their children with their student loan payments. Doing so will not obligate the parents to continue making the student loan payments. Only the borrower and cosigner who signed the loan’s promissory note are responsible for the debt.”Read Entire Answer

As a general rule, lenders do not settle non-defaulted student loans for less than what is owed. The payoff amount on a student loan equals the total outstanding loan balance, including the principal balance and any accrued but unpaid interest.

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Dependency status on the FAFSA and dependency status on federal income tax returns are not the same. Dependency status on the FAFSA is defined by the Higher Education Act of 1965 while dependency status on federal income tax returns is defined by the Internal Revenue Code of 1986. Each statute has different rules.

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A 23-year-old child is considered to be an independent student on the Free Application for Federal Student Aid (FAFSA) if he will reach age 24 by December 31 of the academic year. Otherwise, he is considered to be a dependent student, assuming that he doesn’t satisfy any of the other criteria for independent student status.

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The parent responsible for completing the Free Application for Federal Student Aid (FAFSA) is not necessarily the same as the parent who claims the student as an exemption on the parent’s federal income tax return. Which parent claims the student as an exemption on the parent’s federal income tax return does not affect which parent is responsible for completing the FAFSA.

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Under certain circumstances, undocumented individuals who entered the U.S. before reaching age 16 and before June 15, 2007 may apply for a temporary 3-year exemption from deportation under the Deferred Action for Childhood Arrivals (DACA) program. People granted DACA status may also receive a work permit. Undocumented students with DACA status are not eligible for federal student aid. They may, however, be eligible for state or institutional financial aid, depending on the state and the college.

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Dependent students must have their legal parents complete the Free Application for Federal Student Aid (FAFSA), regardless of where they live. Legal parents include the student’s biological or adoptive parents. Parents who are listed on the student’s birth certificate can also count as a legal parent.

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The preparer section of the Free Application for Federal Student Aid (FAFSA) is intended for paid preparers of the FAFSA, not the student or parents. A paid preparer is someone who was paid a fee to provide personalized help or advice in completing the FAFSA or to complete the FAFSA on behalf of the student and/or his or her family.

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Which parent or parents are responsible for completing the Free Application for Federal Student Aid (FAFSA) depends on the parents’ marital status, living arrangements and financial support of the student as of the date the FAFSA is filed. Also, the parents must be legal parents (e.g., biological or adoptive parents or listed on the student’s birth certificate) or married to the student’s legal parent. Legal guardians and foster parents are not considered to be legal parents unless they have adopted the student.

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Investment real estate is always reported as an asset on the Free Application for Federal Student Aid (FAFSA) and the CSS/Financial Aid PROFILE form. The asset value should be reported as the net worth, which is the difference between the current market value of the asset and any debts secured by the asset. The PROFILE form also asks for the year of purchase and the purchase price.

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The Free Application for Federal Student Aid (FAFSA) calculates the expected family contribution (EFC) based on income and taxes from the tax year prior to the award year for which the student is seeking student financial aid. (Award years run from July 1 to June 30 and often align with college academic years.) The prior tax year is often called the base year. For example, if a student is seeking financial aid for the 2015-2016 award year, the base year is 2014.

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The CSS/Financial Aid PROFILE form is used by about 250 mostly private colleges to award institutional financial aid funds. These colleges still use the Free Application for Federal Student Aid (FAFSA) for awarding federal and state financial aid. The PROFILE may be customized by each college and there is no standard for how the colleges use the answers submitted on the PROFILE. In particular, there are several different ways that colleges may use the answer to the PROFILE question about financial support for college from the student’s parents.

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The claim that billions of dollars of scholarships go unclaimed each year is a myth based on a 1976-77 academic year study by the National Institute of Work and Learning, which estimated that $7 billion in employer-paid tuition assistance was available each year, but only $300 million to $400 million was used annually. Subtract one figure from the other to arrive at $6.6 billion that was subsequently misreported as unclaimed scholarships. Thus, the myth is more than 30 years old, was based on an unsubstantiated estimate and had nothing to do with private scholarships.

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Award displacement occurs when the receipt of one form of financial aid, such as a private scholarship, causes a reduction in other forms of financial aid.When a student is receiving need-based financial aid, receipt of a private scholarship may reduce the student's demonstrated financial need. The college financial aid office responds by reducing the student’s need-based financial aid package by a similar amount.

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It is best to borrow as little as possible for college. Budget before you borrow. Try to borrow only what you absolutely need. Do not treat loan limits as targets. Every dollar you borrow will cost about two dollars by the time you repay the debt. Before you spend student loan money on anything, ask yourself if you’d still buy it at twice the price. Live like a student while you are in school, so you don’t have to live like a student after you graduate.

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Despite the confusing terminology, the expected family contribution (EFC) is not the amount a family will have to contribute to pay for college. The EFC is a measure of the family’s financial strength that is used to determine eligibility for need-based student financial aid.

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Federal student loan debt in the United States is not forgiven when the borrower retires or at any other age. If a borrower defaults on his or her federal student loans, the federal government may offset up to 15% of the borrower’s Social Security disability and retirement benefits to repay the student loans.

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Families should spend down student assets before parent assets, because student assets are assessed more heavily than parent assets in the financial aid formulas. Use money from custodial bank and brokerage accounts first, spending it down to zero before touching the parent’s money. There is one exception to this rule: the custodial versions of 529 college savings plans. If the student is a dependent student, these are treated as though they were parent assets on the Free Application for Federal Student Aid (FAFSA).

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The income and tax questions on the Free Application for Federal Student Aid (FAFSA) must be updated after the student and parents file their federal income tax returns. If the student and parents checked the “will file” answer to the tax return question on the FAFSA, the U.S. Department of Education will email them a reminder to update the FAFSA if they provided email addresses on the form.

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If a student is in a court-ordered legal guardianship, the student is considered to be an independent student. The legal guardianship must have been granted by a court of competent jurisdiction in the student’s state of legal residence. A student who is in a legal guardianship to his or her parents is not considered to be an independent student. If the legal guardianship was not court-ordered, but arranged by an attorney, it does not make the student an independent student.

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