Financial Aid 101 October 21, 2024

Please note that this transcript was auto-generated. We apologize for any minor errors in spelling or grammar.

Okay. Um, so tonight we're going to talk all things financial aid. And first thing I'll also share is that MEFA has so much, so many resources and so much help for you, no matter where you are in this process and especially all year long senior year when you're applying for financial aid and looking at award offers and all of that.

So, um, Feel free to follow us on all of these social media outlets, any, anywhere you get your information. We post information about [00:01:00] scholarships. Um, we'll post information when the FAFSA launches and you probably already signed up for me for emails, but if not, you can use the QR code. There to do so. And again, I'm recording this tomorrow.

We will send you the recording and the slides. So you'll have those. And usually I'd say start throwing your questions in the Q and A. But tonight I'll ask you to hold them until the end and we'll make sure to cover them. If you would like closed captioning, use the live transcript. Button and click on that.

And again, if you need to leave, that's fine, because we will be sending you the slides and the recording. All right, so a few things about MEFA just so you know who we are. MEFA is a state authority and we've been around since 1982 with the mission of helping families plan, save, and pay for college. We actually have private loans for families who need that type of [00:02:00] financing when it comes to paying the college bill.

We also have the state's savings plans, so we have the U Fund 529 plan that is managed by Fidelity. We have the U plan prepaid tuition plan, and we also have the attainable plan, which is an able program for people with disabilities to be able to save also in a tax free way and to not get in the way of receiving benefits.

All right. So tonight we're going to talk about the financial aid landscape and everything about financial aid. So I'm just going to say that most of you have probably heard that last year the FAFSA was revamped. Um, and it needed to be because it was, it was a little, it was complicated. And so it was revamped for good reason.

However, the rollout of that was pretty much a disaster. And so last year was a very challenging [00:03:00] year for students and families applying for financial aid. However, there's good reason to believe that this year is going to be a lot smoother. Because, you know, a lot is being tested now before the launch, which is still delayed.

Usually the FAFSA is available in October, but now it's going to be available on or before December 1st. And again, good reason to believe that it's going to be already in a good process this year because of all the testing that's been taking place. And then I guess the other thing I'd say is that this process has so many pieces to it and sometimes you might feel like you're alone if you have a technical problem or you have a question or something's confusing at a, from a college.

Please just know that MEFA is a great resource for you and you can reach out to us at any time. The colleges are also a great resource and your high school counselors. But don't be afraid to ask questions, raise your hand, and we're going to share a [00:04:00] lot of those resources here. All right, so we will start and talk about what is financial aid.

Well, basically financial aid is any money that's going to help you and your students pay for college, okay? And it's usually categorized in one of three types. The first is grants and scholarships, and that's the best kind. That's really what you're hoping for when you apply for financial aid. Um, and that's money that is awarded to the student and does not need to be repaid.

You'll see there are a couple of terms grants scholarships. Um, sometimes they have meaning to them that grants can be need based and scholarships can be merit based. But actually, I also see them used interchangeably. So the best thing to know really is that that's the best type of money and we'll get into the differences in a moment.

Another type of aid is federal work study. And that's an allotment that's awarded to the student. Um, and then the student will go [00:05:00] and find a job, which is easier to do when you have a work study allotment, usually on campus. And then the student works and gets paid. With a paycheck weekly, biweekly, monthly, and so that money can be used for things during the academic year, such as books, shampoo, pizza, transportation, all of that, but it doesn't come to you, the family, up front, so I just like to say that, but it is something that students can use to pay expenses during the year.

Really, actually a great program for the students to earn a little money. And then federal student loans. Which loans, of course, are money that is awarded to you, and then you have to pay back. So while that may not seem like financial aid, I'll explain how with some loans, the ones I'm going to talk with you about right now, why they're considered financial aid.

So, this, these are the [00:06:00] federal direct student loans. And these are considered financial aid because of the unique benefits they have. So the unique benefits are that the student is the sole borrower. There's no credit check done for a student to borrow one of these loans, and these loans can be subsidized and unsubsidized or a combination.

And what that means is if, if a student receives a subsidized federal student loan, that means the federal government pays the interest on that loan the whole time that they're in college. Um, if it's unsubsidized, that doesn't happen. But still, they have usually low fixed interest rates. So that fixed interest rate stays with the student for the life of the loan.

Um, and the interest rates are set every year in May. Now, if you can see, 6. 53 is for the current school year. That's not super low. And that's just because, um, interest rates in general are a little bit higher [00:07:00] right now, but, um, but they are fixed. And then you can see on the right that these are the amounts, the maximum amounts that a student can borrow through this program.

Uh, freshman year, 5, 500, sophomore year, 6, 500, and then junior and senior year, 7, 500 each. So if a student were to take. All of their undergraduate loans that they're eligible for, they would be borrowing about 27, 000 and what that translates into when they graduate is probably on a normal repayment period of 10 years, about 300 a month.

So maybe a student graduates, gets a job and is able to start paying that on a monthly basis. They don't have to pay until six months after they graduate. But if not, the other sort of unique benefit of these loans is that there are a lot of different options and ways to repay. And some of them are income, [00:08:00] income based.

So basically the monthly payment. Reflects the student's income, and that way, if a student can't make that 300 payment a month, they can always pay a lower amount over a period of time, a longer period of time. Now, it's always. Better to pay it off faster, so less interest accrues, but this allows students to manage their payments while they're starting out in their career.

And these loans also have deferment, forbearance, forgiveness opportunities. So this is why when we talk about these federal student loans, we lump them under the financial aid category. And where does all this financial aid come from? Well, it comes from a variety of sources. The federal government awards a lot of this financial aid.

The state also has, I could say this with confidence now, the state has a lot of financial aid, more than it's had in [00:09:00] decades at this point. Um, and we'll talk about free community college and all of that. So that's an option. The colleges and universities themselves also award. a lot of financial aid. And when you go through this financial aid process that we're going to discuss, you are applying for all of that aid.

Federal, state, college, and the college really is the coordinator of all of that and makes an award with all of those different types of aid to the student. The one thing that's kind of outside of the process is the box that says other agencies and Um, outside scholarship searches. So this is a separate process in that students can either go online to one of these scholarship, um, searches online and say, you know, this is my GPA.

I'm interested in biology. I like soccer. Um, and I've done this volunteer work. [00:10:00] may receive a list of potential outside scholarships that they can apply for and that's a separate process. So it's a, it's a good thing to do and students should take that time just to see sometimes even 500 here, 250 there can, can really defray some costs.

And the other thing besides using those online scholarship searches, Just looking closer to home, seeing does your high school or town have any scholarships you can apply for, um, do parents, employers, or do any community organizations that you are involved with, sometimes you can apply for small scholarships that way.

And now let's talk a little bit about why financial aid is awarded. It's awarded really based on Two different things. Um, sometimes a combination again, some is based on merit and so colleges each year want to bring in the best class that they can. And sometimes they use merit money to do that. And that's [00:11:00] awarded in recognition of students achievements.

To date, mostly academic, but sometimes athletic. We hear more about athletic scholarships or something, but actually it's mostly based on on academics, but it could be based on artistic skills. It is basically anything that really, if a student is high in the admissions pool at a certain college, they may receive some merit based aid because colleges again use this merit based aid to craft their class.

Thanks. So it will be important when a student receives an award offer to just have an understanding about, oh, this is merit, this is need based aid, um, because the student will just want to make sure, is this renewable? And usually it will be, but sometimes with a caveat, it might be that if you receive a merit based award, a student needs to keep a 2 GPA.

So that's important information to know. And then the other [00:12:00] way, Um, and then there's a standard formula and a calculation happens that determines how much it's determined. You can pay as a family and then whatever's left can be filled with financial aid. So we'll, we'll talk more about that. So the application process.

So I would say it's so important just to stay very organized with this process. So just as the student will for admissions, uh, looking at the websites of the colleges they're planning to apply to, checking deadlines, deadlines for admissions, deadlines for financial aid, uh, what they need to complete an application.

And they can be different from college to college, and they're usually different than the admissions deadlines, but close. So regular [00:13:00] admissions and therefore. Financial aid deadlines that go along with that can sometimes be in January, but many, many colleges these days have early, early decision, early application, admissions processes, and then they therefore have early deadlines for financial aid for students using those.

So, um, financially, deadlines can be early. You know, in the in the fall as well. So just important to pay attention to those deadlines and, um, to to follow those deadlines. And we have something called the application manager online that you can download, or you could just make a spreadsheet of all of the colleges and all of the required materials and deadlines.

Alright, so the first form that everyone has to file, because every college requires it, is the FAFSA, the Free Application for Federal Student Aid, and you have to complete it every year, and this year, as I mentioned, [00:14:00] it will be available December 1st, so pay attention to those MEFA emails, we'll let you know as soon as it's launched, and then there's no reason not to go in and Complete that right away and, um, students who are seniors this year will be completing the 2526 FAFSA, meaning that they'll start college in the fall of 25 and the way this new form because again, it was revamped last year.

The way this form works. best is that the student starts the FAFSA and goes in and completes their part, which is short, and then invites the other people who need To be on the forum with them. And so the word for that is contributors. So anyone whose information appears on the FAFSA is called a contributor.

The student invites the other contributors, and then the contributors go in, fill out their sections, and the last person to submit hits submit. [00:15:00] And then the FAFSA is submitted. I'm just going to look here to see if I, I have something in the Q& A. Yep. And so there's a question because I was just going to address that.

So we're reading each other's minds. Um, how can you submit the financial aid before the FAFSA comes out? So if a college Has an earlier deadline. Say they have an early decision deadline of November 15th, and I just told you the FAFSA doesn't come out till December 1st. That college, if they have an earlier deadline, they are going to have another way for you to submit financially.

And I'm going to show you in a minute. There is another form that a lot of those colleges that have those early decision, early action processes will have a another form. And you just do that part and you'd follow up with this. Um, or many colleges have moved their deadlines this year knowing the [00:16:00] FAFSA doesn't come out till December 1st.

So, um, everyone's very aware of that piece. So just look online, see what you can do before December 1st, and then you'll do the FAFSA after December 1st, and we'll get to that other form right now.

Okay, before I get to that form though, before you file a FAFSA, you have one step which You need to do and it's probably good to do it right now, because then you'll have this done. And when the FAFSA is launched, you'll be ready to go. And what that is, is to create an FSA ID. And that's basically just a username and password.

And I think, I think the feds are going to get away from calling it an FSA ID and just call it a username and password. Um, so you can sit down and do that right now. And here's who needs one. So you go to studentaid. gov, FSA ID, create an account, and you need an email address, and the student always needs an FSA ID, [00:17:00] so the student will create an account, and then the student's parents, if they are married, And file a joint tax return.

So if those two things are in place, then only one parent needs an FSA ID. So, and if those, either of those isn't in place, then, you know, if the parents are married and filed separately or something, then both parents would need to, um, to get an FSA ID. So something you can do right now, get that out of the way.

It does actually take about five or 10 minutes. I've done it with a few people, but it goes smoothly. But you set up a username and password as we're so used to doing on so many sites. Um, the other thing I'll say is that if, um, a student's parents are divorced or separated, then it's the student And the [00:18:00] parent who's provided more support over the last 12 months that those are the two people that will be filing the FAFSA only unless that parent is remarried, then it would be those those three people, and then the same rules apply as far as who needs the FSA ID.

All right. And if a student's parents don't have an SFS, And a social security number. Um, that was a big problem last year for some families, but, um, they just need to go in and answer some knowledge. Based questions from a credit history and a verification will take place, but they will be able to create an FSA ID and start the FAFSA.

Even if that verification has to continue on. All right. So what's reported on the FAFSA? Let me just look up here again. Let's see. [00:19:00] Great. So general information, name, date of birth, address, citizenship status, so U. S. citizens and permanent residents or eligible non citizens can apply for federal aid. Um, I will make one note here, um, undocumented students right now can't apply for federal aid, but Are now eligible in certain circumstances to apply for Massachusetts state aid.

And there's another form called the mass M. A. S. F. A. So if you're in that circumstance or you know anyone in that circumstance, be in touch and we'll we'll let you know about the mass before, which should be coming out around the same time as the FAFSA. Um, so then also on the FAFSA, um, mhm. Student will be putting down the colleges they're applying to, and we, I mentioned already that, um, if parents are married, [00:20:00] uh, including same sex parents, all that information goes on the form, all parents who live together, information goes on the form, and then I mentioned divorced or separated, it's the parent who provided the most financial support in the last 12 months, and their current spouse, if they, if they have one.

Um, and support financial support is is intentionally vague because that can mean, um, you know, a lot of different things in different circumstances, but it really is the family who's making the choice of who's the person who provided that support legal guardians are not apparent. So they do not need to put their information on this form.

And then there are some other questions like the number of people in your household and the number of children in college. Although. That is not a factor in the in the formula anymore.[00:21:00]

Okay. And then the financial information and this is going to be easy with the new revamped FAFSA. So basically, um, if you're a senior, um, the year in question, you're going to be using information from your 2023 tax return. And basically. Everyone who's on the form just goes in and gives consent to have their information brought into the form.

It's a push of a button, and that information comes in from the IRS to the FAFSA, and that makes this form, doesn't take as long to fill out because of that. And then the family, you'll answer questions about assets, such as the value of your savings, checking, investments. Um, you have to report all of your assets, businesses, other property.

Um, this year, if you have education savings counts, like 5 29 plans or something, you just have to report the ones for the student who's fast. So you're completing [00:22:00] on the FAFSA. You don't have to report any information about your primary home or the equity in that the value of your retirement accounts.

Or life insurance. So those are not included on the FAFSA and you will report child support received. And there's no, I mean, if you have an investment that has some debt on it and you're reporting that asset, you're, you're doing worth minus debt for the, for the value. But other than that, there aren't really any questions about debt.

So it really doesn't let you put in anything about your consumer debt or anything like that.

All right. So that's the FAFSA. And now we're going to talk about the other form that I mentioned, especially those, those colleges that have a lot of their own money, those that have earlier. admissions deadlines. Some of them will require this other form in [00:23:00] addition to the FAFSA called the CSS profile.

I'm going to see there is one question here. Oh yeah. So someone asked, are you positive that parents don't have to report the value of IRAs on the FAFSA? I am. And I will tell you, yep, I've been doing this work for 30 years or something crazy like that. Yes, our retirement accounts are not qualified retirement accounts, which, you know, there are a few different kinds.

Um, you do not have to report those assets on the FAFSA. So that's good. So let's talk about the CSS profile. If your college requires the CSS profile, then you need to complete this as well. And the reason colleges require this is usually they have a lot of their own institutional money The FAFSA has become simpler, and they really want to make sure they're distributing their institutional money in the most equitable way.

So, uh, [00:24:00] you should, you can check in a couple of different ways. You can look on a college website, financial aid section, what forms are required, and we'll tell you FAFSA. And maybe CSS profile, maybe not. Or you could go to cssprofile. org slash participating institutions and you can get a list of all of the colleges that require.

CSS profile. And if your college that you're applying to does require it, even one, you do need to complete this form. So, um, this one has a fee. It's 25 for the first school you're going to send the form to and 16 for each additional. However, if a family's income is less than 100, 000 or if the family meets other criteria, um, there, it can be, the fee can be waived automatically as you're going through the form.

It will just automatically waive the fee. This form is out now. It's been out since October 1st. So if you have a college that requires [00:25:00] this, get this form done because this is what they're going to use to make up a financial aid offer for you, especially if you're applying early. Um, the way this works kind of follows those same rules where, um, if a, you know, if parents are married, both their information is on the form.

If parents are divorced or separated, it's the parent who's provided the most support in the last 12 months and spouse, if they have a new spouse, who files the CSS profile with the student. But in many cases with the CSS profile, um, the college will then ask the other parent to go in and complete. A CSS profile as well, and those two get linked up at the college, but no information is ever shared.

So those forms are confidential, um, but get linked up in the student file at the college. So that's important to know. And we have another webinar that goes into great [00:26:00] detail about the CSS profile and actually Wednesday night we have a Q and A with Mike Goodwin from Williams College is going to be on with me.

Once in a while, a college will have, if they don't require the CSS profile, they might have their own one pager that they can download from the website or something. Um, so just do look in case there's some other type of financial aid form that a college requires, but I see that less and less, although with the difficulties with the FAFSA last year, a few colleges added a form like that so they could make an award to students.

All right, I'm just looking at some of the questions.

Yeah, so this is a good question. Um, if let's say the, uh, parent who's completing the FAFSA with the student, [00:27:00] um, in a divorced or separated situation, um, doesn't have a 529 plan for the student, but the other parent does, um, yeah, that doesn't need to be reported because, um, because it doesn't, it's the account owner is not the parent who's completing the FAFSA.

The FAFSA. So that's a good question.

All right, let me keep going here. So then what happens after you apply both of these forms, um, you put down the names of the colleges you want the information sent to and the colleges receive, um, the data electronically as does the federal government, the state, and then the student will receive a FAFSA submission summary.

by email and they'll receive an acknowledgement from the CSS profile so that you can just sort of look, make sure you didn't make any mistakes, all of that. And [00:28:00] just know that sometimes after you submit, there is some verification done. That's just a process that happens with financial aid offices. And so the financial aid office may send you some questions.

Um, they might even have a portal. And they'll tell you about it that you should set up an account in the portal and you might want to check that once in a while because that's where they might say we're missing this form or can you send us this just stay on top of it after you apply for financial aid and again colleges know.

They really try to get these awards to you very close to when you hear about admissions, because they know you have to have this information to make a decision. So again, last year was wonky, um, but hopefully it won't be this year, and you'll receive these things in close proximity. All[00:29:00]

right, I mentioned the verification process. So then a few other things. I started to say this, once you apply for financial aid with a college, stay on top of that, and The financial aid offices at the specific colleges that your student is applying to can be super helpful and can be a great resource.

And so at that point, if you have questions, let's say you receive an offer and there's a merit based award in there, you might want to call if it's not very clear in the award to say, is this renewable? Can we expect this for four years? Or if, Your student goes online and receives an outside scholarship.

You might want to just check with the college to see if that is going to affect the financial aid at all, and especially. If let's say you file the financial aid forms and something happens, you, someone in the family loses a job or there's, you know, medical bills or something, you can [00:30:00] always be in touch with the financial aid office, give them an update and keep them, um, informed about what's going on in your family financially so they can try to accommodate a financial aid offer as best they can.

And depending on the office, they might. Not, they might like you to call, they might like you to email, they might tell you have a certain counselor in an alphabet split, uh, or they might even have a chat. Alright, so, how financial aid decisions are made. So you've done your part at that point, you can relax for a little bit, and this is what's going on at the college.

They need to. Create financial aid offers for all of the students. And the first thing they do to be able to do that is to figure out what is their cost of attendance. How much is it going to cost a student to be able to be here for the year. And so they come up with a cost of attendance, which includes tuition and fees, food, housing, books and [00:31:00] supplies, transportation and personal expenses.

And then that whole amount Is the cost of attendance. And that's why sometimes you see some of these very high cost of attendances here, um, in New England, um, because it includes all of those things. And you'll see that this cost of attendance includes some expenses that are going to be billed to you.

Directly like tuition and fees, maybe food, maybe housing. And then it includes some expenses that won't be billed to you, but that you do need to plan for because the student will have to pay for books and the student may need transportation and you know, we'll have a few personal expenses too. So that's why that is all together.

And then from the information you put on, let's say the FAFSA right now, but it's both, um, There's a formula, and the number that comes out at the bottom of that formula is called the Student Aid Index, the [00:32:00] SAI. It used to be called the EFC, Expected Family Contribution. It's the same thing, but it's called the Student Aid Index.

Um, because it's a number that basically represents a family's financial strength. Every family has this, goes through the same formula. In this formula, your income is weighed more heavily than your assets. For And then some colleges like those that use the CSS profile also have an institutional formula that they're looking at.

Um, and so, for example, I didn't say this, but on the CSS profile, they do ask questions about your primary residence. What it's worth, what's owed on it, when did you buy it, how much did you buy it for. And they use, for example, the equity formula. in your primary residence, um, as part of your assets, unlike on the FAFSA.

So, you know, the calculations are similar, but the CSS profile may include a few other [00:33:00] pieces. Um, and then the difference between the cost of attendance at a college and your student aid index is your financial aid eligibility. And then the colleges work to create an award for your student trying to meet that financial aid eligibility or come close to it.

There are a number of colleges, not a big number, maybe about 50 or 60 in the country, that make the promise to meet full need of all students that they accept. And they'll tell you that right on the front page of their financial aid section of their website, because that's great. Um, and they then would give a financial aid offer that meets that financial aid eligibility.

But some colleges aren't able to do that. So they do the best they can with the resources they have, but it doesn't always get fully met. It's a preview. So [00:34:00] let me show you now. I'm going to pretend that I am working at a college and I am a financial aid director, and I am going to make an award for a student.

And at my pretend college here, the cost of attendance is 45, 000. And you as the family, your SAI number is 5, 000. Okay. So I need to make an award for your students. So first I'm going to say, well, as a you can pay 5, 000. And I need to get up to this 45 for your student to be able to attend. Then I'm going to award a grant, uh, 17, 500 and a scholarship because your student had a really high GPA, 10, 000.

And then I'm going to award that maximum student loan, direct, federal direct student loan for a freshman. 5, 500, a work study allotment of 2, 000 that then your student will be able to earn and pay for personal expenses. And that's all I have in my [00:35:00] budget. We are one of those colleges that doesn't promise to meet full need, uh, in my pretend world.

So there's some unmet need there. So really then you as the family with this award sitting in front of you for your student would need to come up with the 5, 000 student aid index amount. And any unmet needs. So really, as a family, you'd have to come up with 10, 000 for your student to be able to have costs covered at this institution.

Um, I'll just tell you a little about net price calculators, especially if any of you have younger students and you're just trying to get a sense of what, what's my SAI. I don't want to wait for the FAFSA to come out. Um, colleges do have something called net price calculators. On their websites. You can just type net price calculator into the into the search bar and put in information as you will on a financial aid form, and it will give you a [00:36:00] sense of again.

The information is only as good as you put in. But of what your S. A. I number could be so that can be helpful as you're planning. And again, especially if you have younger students. All right, so then I really enjoyed this slide. Um, I like to show that this is what probably the situation you will find yourself in at some point in the winter or the spring, and that is that your student has been accepted to a variety of colleges, which is great, and that you will have a variety of colleges.

of, um, financial aid offers in front of you. And so another pretend example, but I think it's illustrative, is here are three colleges. and College A, B, and C, and they've each given an award for your student. And again, for the sake of this example, they all cost 45, [00:37:00] 000. Your student aid index number is 5, 000.

Your financial aid eligibility is 40, 000. So College A gave an award, grants, scholarships, student loans, work study of 40, 000. So College A, um, And then College B, they gave a nice award also, but they did not fully meet. There's some unmet need there of 7, 000. And College C met even less, and there's unmet need of 15, 000.

So you may see this type of thing when you are looking at all of the offers. And there are so many things you could talk about with your student at that point. You know, as I always say, as luck would have it, right? In this situation, these awards on your kitchen table and your student, you know how, how life works.

Your student wants to go to [00:38:00] College C, right? And they're giving you the least. So, um, I don't know. That's, that's how life works for me anyway. So what you can do is you could be in touch with College C. And your student could write to them. You could write to them to just explain that, well, this is my student's first choice.

We didn't receive enough financial aid. That's going to cover it. We did for some other colleges, you know, and just tell your story and see if there's anything that a college can do. And sometimes they can, sometimes they can't. Um, or you could also, um, have your student really do a little more research into college a college B.

And, um, Maybe go to some of the open houses and the accepted student day events and be in touch with an admissions representative just to see could I get everything I want in a college experience at one of these other colleges that gave me a little [00:39:00] more money and it seems a little more affordable for our family.

So those are the type of conversations you can have at that point.

And this slide is in here just to almost warn you about one other piece. And, um, you'll see up at the top, College Cost Transparency Initiative. It's an initiative that is trying to encourage colleges to really make the award letters very understandable. They all look a little different. They're sometimes hard to, um, really understand.

And it's important to understand, you know, what are the elements in the award? How much are you really getting? How much you're gonna have to pay? And so, here's another example of UC's three colleges, they've each given an award, and if you look quickly at the total, it looks like, oh, these colleges have all given 35, 000.

But they have not. So you can see, College B gave [00:40:00] something called a parent loan for 10, 000. College C has something in their parent loan, 29, 500. That is not financial aid. I don't even have to tell you that. But it's almost surprising. Why would you see it there on an award? But just be careful that you understand the elements.

You may end up taking a parent loan, and that's fine. Many families do. But you first want to compare the apples to apples when you're comparing the awards. And if you see at the bottom, we have a college cost calculator that allows you to put Put in all the costs and the aid at your different schools and see what your bottom line is that you will owe.

And then you may choose to borrow a loan, but that's your choice. Don't sort of be fooled by some of the way these different award letters, um, Look, and again, this college cost transparency initiative is an initiative to try to get colleges to abide by certain standards that will make it easier for you to to [00:41:00] read them.

Right. I'm going to look just at a couple of questions here before I move on.

So someone's asking a question. About a student with a certain type of visa and can they complete the FAFSA and off the top of my head. I don't, I don't know the answer to that, but I have a list that I can find tomorrow of eligible non citizen types. So at the end, you're going to see a college planning email.

Just email me tomorrow. We'll find that list of the different visas and. So that some students can file a FAFSA and some can't. Okay, thanks for that.

Um, and so then there's a question. What are the pros and cons of submitting as a contributor? Um, [00:42:00] I guess I'm not 100 percent sure. You might have to elaborate on that question for me. Um, you, in other words, you, basically, there are certain requirements that you have to be a contributor. If you, if you're, Parents and you're married, you're both going to be contributors on the form.

If you're a parent and you're the one who's supporting the student, You're going to have to be a contributor on the form. Um, it's just that, yes, on the FAFSA, if parents are divorced or separated, it is one parent, and if that parent's remarried, that submits the FAFSA, and the other doesn't, just as a way of simplifying it.

So, it's not really as if, um, you have a choice, it's just the parents who need to be a contributor. But I may be misunderstanding. So feel free to write a little more for that. If a grandparent is the owner of a 529 for their grandchild, does that have to be reported? And the answer is no. And in fact, um, [00:43:00] it doesn't have to be reported.

And it doesn't have to be reported. It doesn't even get counted when it gets withdrawn and distributed for the child later on as it used to, but it doesn't anymore. That changed last year with the new FAFSA.

And if you don't get work study, is there a chance your student could still work if they can get a job at school? Absolutely. Um, absolutely. So students can still try to find jobs outside of the work study program. Um, but if a student is offered work study, I always think it's great to accept it because it just makes it a tiny bit easier.

Um, because with a work study job, the office has some federal money that's funding that, so they're paying less out of their budget, so they're able to hire more students. Um, so, you know, that's what creates a lot of the jobs on campus. So if you Receive work study, I'd say the student should accept it, [00:44:00] and if not, you could even ask for it.

And thirdly, if you don't get work study, sure thing, you can find, you can find some jobs on campus. I'd say get on that early.

Oh, yeah. Another great question. Since the FAFSA isn't open yet, but the CSS profile is for early action applicants, is it okay to submit the CSS profile now or wait until the FAFSA is completed? Don't wait. Yes. File the CSS profile now. And in fact, that's the form that those colleges will use to create an award for your student.

And then you do have to follow up with the FAFSA and they might, you know, they will, you know, incorporate that, but they can make an award for you. Um, you know, you'll get a good estimated award with that CSS profile.[00:45:00]

And then again, I'll just clarify this. If parents are separated, only the information from the custodial parent will count. That's on the FAFSA. And again, just to be very technical here, It's not necessarily custodial parent. It's just parent who provided the most support in the last 12 months. Probably the same, but I just say that, uh, but with the CSS profile form, um, that one parent who files the FAFSA with the student files the CSS profile with the student.

Then the other program, a parent, is probably going to have to file a CSS profile separately, too. That's how that works. So it's not on the same form, it's on a different form. And they get matched up behind the scenes.

Yep, and again, just clarifying, I know it seems crazy, but it's good. If a grandparent is the owner of a 529 plan, and the student is [00:46:00] the beneficiary, You don't need to report it. That's currently how, um, that's, that's currently the way it is, and actually it was always that way. Um, it's just that there used to be a way that once the grandparents used the money to pay that it got counted later on for the student.

But, um, yes, it does not count. It's only the parent's information on these forms.

All right, so I'll go into this last section. These are great questions. Thank you. Um, okay, paying for college. So, all right, let's say we get through all of this. You get through this with your student. You think you're narrowing it down. You pick a college that the student is happy with, you think is affordable, um, and you've done those calculators and you see, oh, we're going to owe 20, 000 as a family.

Now, [00:47:00] I'm skipping ahead here, but you might say, That's too much for us. We can't pay 20, 000 a year. Let's go back and think of our other options. And one of those might be, um, community college is free in Massachusetts. My student could get all of their requirements out of the way for two years for free and then transfer to a four year college.

So there are all kinds of options these days, but just putting that in your mind that there always are a lot of options. Um, but let's say in this instance, you figure out 20, 000 a year. Okay, we're going to do it. How does a family come up with that? You'll all do it differently. So I'm just going to show you how one family might come up with 20, 000 to pay that bill.

Maybe the student has some savings from summer jobs, um, and even school year jobs and has 1, 000 of savings. So the student is going to contribute 1, 000. And then maybe you have a 529 plan for your student and you decide we're going to use 4000 of that [00:48:00] this year. And then every college has something called a monthly payment plan that isn't a loan that you can just break up the cost of your, the of your bill instead of paying two times a year, which is typical and break it up nine months, 10 months, 12 months.

And so let's say this family just paid off a car loan and now has an extra 500 a month. They might say, well, I'm going to do 500 a month for 10 months on a payment plan to the college. So that's 5, 000 there. And then this family might say, We're going to borrow an education loan. Uh, we're going to take that out because we just can't strap ourselves anymore with our family budget.

We're going to borrow a loan of 10, 000. And that could be through that's over and above the federal student loans. That could be 10, 000. Maybe a federal plus loan, which is a parent loan for undergraduate students from the federal government. [00:49:00] It could be a MEFA loan. It could be a loan from your bank that has educational loans.

So at that point, you would be shopping for educational loans to find the one with the best interest rate, the best terms for you. But that's, that's really getting ahead of ourselves. But let's say the family would be And that's how one family might come up with the 20, 000. Um, you might do that a little differently.

And so, you know, all of these things bring up so many Kitchen table conversations. I just love to call them because I feel like so much happens at the kitchen table. Um, so, you know, what is the right next step for the students? Um, there are so many options and I keep bringing up community college because it's very exciting that I've been doing this work for 30 years and that we finally are going to have community college.

Free community college in Massachusetts. I just never imagined it would happen. [00:50:00] Um, so it's always good for the student to apply to a variety of colleges. Keep options and choices open. Um, you don't have to narrow that at first, but you just want to keep an open mind, both student and parent that you want to choose.

a great choice, great path, a great next step, but also make sure that it's affordable and it's not going to put someone in a, in a situation of too much borrowing or something like that. So, um, you know, have a variety of types of colleges on your list. Maybe have a community college on your list or community college.

You know, you can, you could also do later as well. Um, families might want to consider the number of Children in the family going to college. So parents make sure you know what you do for one. You might want to do for the others. And students might also want to think about. They may not know what their course of study is.

Some do and many don't. [00:51:00] But a student might know. Okay, I'm going to be an engineer. I've been accepted to this engineering college. And, you know, all the information that this college has sent. Students are graduating with starting salaries. At 90, 000. And we know there are, there are colleges like that. Um, I know another, uh, business school around that also has, you know, very high starting salaries in the field for many students who graduate.

Um, so that might give a student a little extra confidence about taking on a little more debt or not. But what if, what if 90, 000? It's a student who, say, wants to be a teacher or a school counselor that knows that they're going to need that master's degree after graduating. They might want to take that into consideration, too, as they think about their plans.

So all of those things can weigh in. And students should also really, really spend time to think about, [00:52:00] understanding themselves, their learning style as they're making these college choices. And if a student, you know, had an IEP in high school, for example, maybe you really want to figure out what resources are available at the different colleges.

And there are a lot, but those are just things you want to, you want to really think about. Would a gap year benefit the student? Um, so keep all those things in mind. And then here's all this information that is new here in Massachusetts. That's really great. So mass educate is free community college and it's really free for everyone.

Um, it's tuition fees and a potential book allowance for all students. Um, students do need to complete the FAFSA. And that's because if a student is eligible for federal aid, that kicks in first, and then the state kicks in. Um, but check out this website, and it can be a nice path, and it can keep college very [00:53:00] affordable.

So I, I just can't say enough about that. Mass ReConnect, uh, was, was the predecessor. It was free community college for adults over 25 years of age. That's still in place. Um, also, uh, there is more mass grant money, um, which can make the four year public institutions more affordable for low to middle income students, um, and for, especially for low income students, they can have free tuition and fees and a book allowance, um, at the four year colleges as well.

So, it doesn't mean that if a student is very low income They necessarily have to choose the community college. They can apply to those four year colleges and may see that the aid makes it very affordable. Um, and then the other piece that I mentioned at the beginning, some undocumented students can now receive Massachusetts in-state tuition and mass State aid.

And they'll, they'll [00:54:00] do that by applying with the mafa form, M-A-S-F-A, and they can go to this link. Um, and mass transfer is just the program that allows students who do start a community college to then make a plan to transfer to a four year institution and tuition break is a program where students can attend a four year public college.

Institutions in neighboring states to Massachusetts and sometimes pay in state Massachusetts tuition for certain programs worth taking a look at that as well. And then some other free resources before I even say this, I'll say that, um, if you want help completing the FAFSA. MEFA has a number of events that we call FAFSA festivals, you know, nothing like making the FAFSA fun.

Um, so you can find that on our MEFA. org slash events page. And if you are starting the FAFSA and you have a question and somehow it's not [00:55:00] working for you, You join one of those events, we put you in a breakout room with an expert and one on one, we help you do the FAFSA. So, um, that's a great service. And FAFSA Day Massachusetts is also, um, doing the same thing.

So that's another place you can go and get one on one help with the FAFSA once it becomes available. Massachusetts Equal Educational Opportunity Centers. also can help students with the FAFSA. And, um, MEFA Pathway is a free online portal for students in grades six through twelve, um, that has a lot of college and career planning resources.

Um, and it's free, so if students want to go in there and create an account. There's a, there's a lot they can learn and here is a timeline and we will send you these slides. You'll have this timeline. Um, and here is where you can register for me a's other webinars. [00:56:00] You can re get that timeline for college admissions and financial aid and sign up for me emails.

But actually, because you're here, you're gonna be signed up for emails anyway, that's, that's what we do. And um, all of our LinkedIn. and x Facebook, YouTube links. We also have a podcast called the MEFA podcast that you can get anywhere you get your podcasts. We talk about a lot of fun topics and here's our contact information.

You can call us anytime or email us anytime with small questions, large questions, philosophical questions. We're happy to help you with all of that. All right, I am going to see what questions we have and feel free to. Any questions in this Q and a.

Yeah. So great, great, great question. And I don't mind saying it numerous times. If, [00:57:00] if you want to take advantage of that free community college mass educate, you do need to complete the FAFSA. So yep. Watch for when that becomes available, complete the FAFSA. And, um, again, it's just really because You might be eligible for some federal aid, and they want to make sure you take advantage of that.

And then the state kicks in the rest to make tuition and fees free and a possible book allowance. So, yes, you have to complete the FAFSA as long as you complete the FAFSA. It doesn't matter what the results are, what your SAI is, nothing. As long as you complete the FAFSA, um, then, um, you you're eligible.

Can be eligible for the free community college.

And so how does a student apply for a loan on their own? So great question. So again, the good news is with the federal direct student loans, they don't have to [00:58:00] because there's no credit check done for the student. So the student can receive a federal direct student loan. Um, and even if If your family doesn't qualify for subsidized loans, they can get that unsubsidized loan at 5, 500 for a freshman.

I assume you're asking because that doesn't cover a lot, may not cover, um, costs at a more expensive college. So other than that, it's very hard for a student to apply for a loan on their own. So other than those federal direct student loans, usually The student is either going to need a co signer or like on a MEFA loan, we have the student and a co signer.

And a cosigner apply together and both are on the note. Um, so I really don't know of any situations other than the federal direct loans where a student can apply for a loan on their own. They really need a credit worthy co borrower.[00:59:00]

So a good, great question. Are payment plans offered or do they need to be requested? Yes, probably the college will send you information about their payment plan, say maybe in May or June. Um, But if they don't you can absolutely ask about it.

Oh, yeah. So let me explain. Um, so about the FAFSA who who needs to complete the FAFSA. So if a student's parents are married, um, then both parents information is on the form, but only one if they file jointly, only one needs an FSA ID. which is that username and password. So married and they file jointly.

All the information goes on the form, but only one, one parent needs that username and password. So it would be the student and one [01:00:00] parent. And then, you know, the tax return comes in, but it's a joint filing. So all that information. gets put on the form.

If divorced or separated, then it's the student and the parent who provided the most support in the last 12 months that files the FAFSA. And if that parent is remarried, that person's information is on the form as well. And that same filing jointly or filing separately comes into play as far as how many FSA IDs are needed.

And then another good question. Can you complete the CSS profile even before the student has submitted the admissions application? Absolutely. That's, I get that question all the time. Um, you don't, there's no, you have to do one before the other, but the bottom line is get all of these forms done as soon as you can.

And, [01:01:00] um, they just get matched up once everything is in place at the college. So sure thing if the student is going to submit soon, but. You know, the CSS profile is open. You have a free night and you have a big cup of tea, sit down and get it done.

So if a school has early decision right now and regular decision is in January, do you wait? To the early decision deadline is passed to apply for regular decision. Um, I guess what I'd say is if if the student has everything together and is ready to apply, then the student could apply the early for the early, early action, you know, which is just not binding.

Um, so. [01:02:00] Yeah, or if the student's definitely going to apply for a regular decision, sure, just wait until January. Absolutely.

Yeah, this is another good question. We talked about students borrowing, parents co signing. This is really important to know. Everyone who's on the note of any loan is responsible. So, you know, it's that students have to and parents have to really talk about that because someone has to pay. And if It's decided that the student will pay, but they miss a payment that could hurt the parents credit and vice versa.

So everyone who is a cosigner on the loan and the student to, um, is responsible. So that's something that really needs to be worked out within the family.[01:03:00]

And should a grandparent open a 5 29 plan now for some of the remaining years? Um, yeah, sure. I mean, I would say, you know, this comes from me not giving financial advice. You might want to, they probably want to talk with their financial advisors. You might want to talk with yours. But, um, I think it's absolutely wonderful for grandparents to want to contribute to a student's education.

And if they can do that, I In a 529 plan and maybe get a few tax benefits there. Um, absolutely. That's and 529 plans are so flexible. They can be used for grad school as well. So I think, I think, I think it's always a good idea. Or people to open up a 5 29 plan for a student.

Okay, good. Good question. More. I know this. [01:04:00] This part's so complicated about so a single unmarried mom who's who's fully supports the student is the person who will file the FAFSA. Okay, so it will just be the student. That's who will be on the form. That's whose information will be on the form. If one of the colleges that the student is applying to also requires the CSS profile, and they require that the other parent complete the CSS profile, then, that the father will go and also complete a CSS profile along with the mother and the student on the other one.

So those will come together, but the father does not need to, um, complete a FAFSA. So, so if parents are divorced or separated, it's just that, that parent on the form with the child, unless that parent is remarried and then it would be, That parent and spouse [01:05:00] and the CSS profile is like the FAFSA in that you put the colleges that required that you're applying to and the information goes to all of the colleges.

Yeah. Uh, does the CSS profile consider siblings in college for student aid calculations? I know FAFSA no longer accounts for them. Yes, it's true that FAFSA will no longer take that into consideration. in coming up with that student aid index number. But yes, the CSS profile is still collecting information about siblings in college and still using that as part of the calculation.

And can the forms be, uh, adjusted once submitted? Yes. So the FAFSA, you can go back [01:06:00] in and correct your FAFSA at any point. And that's relatively easy to do. Uh, with the CSS profile, for some items, you can go back in once and make a correction. And some you can't, and then you can't go back in again. So with the CSS profile, if you've already made the correction, One correction for for an item that you can't can and something else changes.

Then the process is to be in touch with the college or colleges with an email with a letter called colleges ask what they need for verification, but any follow ups and changes and adjustments would have to be done with the CSS profile after that one time. For some items.

Those were great questions. Wow. And I got through them surprisingly. Um, well, that's terrific. I [01:07:00] guess what I'll say is thank you for those good questions. I'm sure they helped everyone. And please know These numbers are up here. This email be in touch as you go through the process. What I tell people about the CSS profile is go in, start it, save, save, save and write down any questions you have.

If you need to give us a call, um, with those questions and other than that, I just wish you good luck state again, stay in touch and thank you so much.