Contact Us
Firm Overview
Why Legend Is Different
Client Types
Professional Biographies
Frequently & Rarely Asked Questions
Risk Spectrum
Investment Strategies
Second Opinion
Global Investment Pulse
Event Calendar
Press Center
Legend News
Clients Only
Career Opportunities
Directions
Newsletter Sign-up
Site Search
Site Map
Home
Tell A Friend About This Website
 
 
 
Financial Briefs

 

Phone: (412) 635-9210
  (888) 236-5960
Connect With Legend:
Subscribe to me on YouTube

Seeking Financial Aid: Don't Fear The FAFSA

Saving money to pay for college is a daunting proposition even if you’re reasonably well off financially.  With tuition increases continuing to outpace the overall inflation rate year after year, parents may be hard pressed to come up with all of the funds needed to finance a child’s higher education.  But financial aid could help fill the gap. 

Each year, more than 13 million undergraduate and graduate students get some form of financial assistance. But the federal government and universities won’t simply hand you the money.  To determine whether you qualify for financial aid, you must complete and file the Free Application for Federal Student Aid (FAFSA). 

Who should fill out a FAFSA?  Practically everyone.  Even if you don’t think you’ll qualify for financial aid, there’s no harm in trying because the filing is free.  And even students from the wealthiest families may need to submit a FAFSA if they’re going to be in a work-study program. 

But just because you should file a FAFSA doesn’t mean you won’t be intimidated by the process itself. Although the form has been simplified somewhat in recent years, it still can be challenging.  Don’t hesitate to seek our assistance. 

Starting the Process

Virtually every college admission program requires a FAFSA for financial aid purposes.  While a school may ask for other financial information in addition to that sought in the FAFSA, the basis form is pretty much mandatory. 

And so you’ll have to come up with answers to about 130 questions about your family assets and income. Based on the information you provide, the FAFSA administrators will calculate the "expected family contribution" (EFC) for your family. How many people are in your household, your family income, the number of students in college, and most assets (but not retirement funds) will be factored in. 

Where can you find the FAFSA?  It’s available online all year long at www.fafsa.ed.gov.  But you can’t file it until January 1 of the year in which a student plans to start college (for example, January 1, 2016, for someone starting school on September 1, 2016).  But be sure to file the form as early as possible because financial aid often is awarded on a first-come, first-served basis.  Late filers may miss the bus and receive nothing. 

To fill out the form, you’ll need income and expense data from the prior year, including:

  • Taxable income for both the parents and the student, including wages, pensions, capital gains, interest, dividends, annuities, unemployment compensation, alimony, rents, and business income
  • Non-taxable income for both the parents and the student, including workers’ compensation, welfare benefits (but not food stamps), housing and food allowances, child support, untaxed Social Security benefits, untaxed income from pensions and annuities, veterans’ benefits, tax-exempt interest income, deductible payments made to a retirement plan, and earned income tax credit
  • Expenses such as income taxes and child support
  • The value of cash, savings, and checking accounts of the parents and the student
  • The net worth of all investments of parents and student (except for retirement plans), including stocks, bonds, CDs, money market funds, mutual funds, commodities, trust funds, education IRAs, and state-based college savings plans (excluding pre-paid tuition plans)
  • The value of estate holdings (e.g., rental property and second homes), but you don’t have to count the equity in your principal residence
  • The net worth of a family business or farm (excluding farms that are principal residences)

The Expected Family Contribution (EFC)

The EFC is the amount your family is expected to contribute to your student's college education for one year. The lower the EFC, the larger the financial aid award that your student may receive. 

Sometimes the EFC rules can work in your favor.  If your student is admitted to a school that agrees to meet students’ full financial needs, the EFC lets you know the most you’ll have to pay regardless of how much that college costs. 

Suppose that a family's EFC is $25,000 and the student is applying to a school with a total cost of $35,000 a year.  That family might expect to receive up to $10,000 in financial aid.  What if the college costs $50,000? The financial aid award could be as high as $25,000.  The basic equation to remember is: Cost - EFC = Need.

Filing a FAFSA is a necessary evil for those seeking financial aid for college.  We can help you position your family for the best possible result.



INDEX
  • Why Aren't More Millennials Moving On Up And Out?
  • Taking Socially Responsible Investing To The Next Level
  • Don't Be Caught Red-Handed By The Wash Sale Rule
  • Leading Economic Indicators Hit 10-Year High
  • Avoid These 6 Mistakes In Stretch IRA Planning
  • More Flexibility Allowed In Flex Spending Accounts
  • Individual Bonds-Ugh!
  • Set Aside The Funds One Might Need For A Rainy Day
  • Protect Against Possible Terrorist Attack
  • U.S. Leading Economic Indicators Rose Again
  • Fed Chair Strikes A More Cautious Tone, But Still Expects Moderate Growth
  • Count Off 3 Tax Breaks For Higher Education
  • Don't Be Victimized By These 10 Common Scams
  • Retirement Plan Choices For The Self-Employed
  • New Law Says Tax Debtors May Lose Their Passports
  • Compare Minor's Account To 529 Plan
  • Are You Being Socially Responsible?
  • 8 Smart Moves For College Grads
  • Seeking Financial Aid: Don't Fear The FAFSA
  • New Baby? Consider An Education Savings Plan
  • HOW THE IRS RESOLVES AN IDENTITY THEFT CASE:
  • 3 Ways To Deduct Mortgage Interest
  • HOW THE IRS RESOLVES AN IDENTITY THEFT CASE
  • Understanding Deflation
  • Don't Play Up Super Bowl Outcome In Stock Decisions
  • When Should Millennials Start Retirement Saving?
  • Have Your Child Kick Into A Roth With A Reward To Boot
  • Sizing Up The Energy Boost To The Economy
  • A Stock Plunge Amid Strong Economic Data
  • 14 Top Year-End Tax Moves For Individuals In 2014
  • Drill Down For Three Key Oil And Gas Tax Breaks
  • When It Pays To ID Security Sales
  • GDP Growth Data Masks Strength Of The Recovery
  • Be On The Lookout For Crimes Involving An Elder Fraud
  • UNDERPERFORMANCE/OVERPERFORMANCE
  • S&P 500's New All Time High Wednesday Will Probably Continue Over Upcoming Months, But Other Indexes Are Struggling
  • U.S. Stock valuations are within the top 10 valuations of all time but probably won't crash. Why?
  • Seven Steps To Digging Your Way Out Of Deep Debt
  • 5 Steps To Protect The Digital Assets You Own
  • The Long-Term Fiscal Status Of The United States
  • Margin Debt At Record Levels
  • What To Do When You're Suddenly Widowed
  • A Common Error In Powers Of Attorney
  • Should You Move To A Different State?
  • Tax Cost Of Being Your Own Landlord
  • Why Do GRATs Remain In Such High Demand?
  • Don't Wait To Harvest Your Losses
  • The Best States To Move To For Tax Purposes
  • 10 Reasons For The IRS To Flag Your Return
  • Many Women Face Special Challenges As Retirement Nears
  • Nine Reasons To Consolidate Debt
  • Straight Talk About Living Trusts
  • SEPPs From An IRA: Don't Change Horses Midstream
  • New Regulations Fill In Gaps On 3.8% Surtax
  • Do You Know Life Insurance Basics?
  • Top Income-Earners Drive U.S. Economic Growth
  • Give IRA Cash To Charity: Heads You Win, Tails You Win
  • Four Wash Sale Strategies To Help Clean Up Taxes
  • College Savings: How Much Do You Need Each Month?
  • Surprising New Research: Large Caps Top Small Caps
  • Newly Widowed Face 401(k), IRA Options
  • Retirement Saving Takes Time And Must Be A Priority
  • Divide-Conquer To Convert To Roth IRA
  • What Is Probate And What Does It Protect?
  • A Research Surprise On Bond Funds
  • After New Tax Law, Do You Still Need A Bypass Trust?
  • Start Estate Planning For Your Child Now
  • Seven Tax Ideas To Use Throughout The Year
  • A Comprehensive Way To Plan For College Savings
  • Bulletproofing Your Will Before Death
  • IRS Mercy on 60-Day IRA Rollover Error
  • Feds Warn Of Life Settlement Dangers
  • Know The Tax Rules On Charitable Gift Deductions
  • IRS Ruling Boosts IDTs as Estate Planning Technique
  • A Defined Benefit Plan Lets You Sock Away Large Amounts If You Can Overcome Some Obstacles
  • Economic Shifts Bring New Pitfalls And Prizes
  • Evaluating Great Companies
  • Inflation Versus Deflation
  • Jeremy Grantham And Lou Stanasolovich Discuss Market Valuations
  • Ramifications Of A Weakening Dollar
  • Secular Versus Cyclical Bear Markets
  • Small Business And Work Opportunity Tax Act
  • Time To Plan For Estates, Wills, & Trusts



  • ©2017 Legend Financial Advisors, Inc.®. All rights reserved.