FAFSA question for high income family

ReadyToRoll · 07-03-2009, 08:35 PM

This question is for a friend (although I wish it were for me...lol!)

Their family income is $350,000-400,000/year. She had told me that she was not going to file a FAFSA because they would not quality for financial aid. But, I told her that she needed to file one in order to qualify for some loans if she wanted them, and also in case someone loses their job and their circumstances change...you need to have that first FAFSA on file. But...I'm not sure I'm right on either count.

Oh...I also told her that I thought she may need to have the FAFSA on file for some merit aid...but not sure I'm right about that either!

Can anyone advise her?

Thanks!

ncmentor · 07-03-2009, 09:03 PM

See "FAFSA for "Upper Middle Class" thread... lots of answers for ya.

thumper1 · 07-03-2009, 09:06 PM

I agree with the OP. In my opinion, students should have some "skin in the game" with regards to paying for their schooling. The Stafford loans are available to all students who submit a FAFSA. And as stated...if there is a financial crisis in the family, they will be able to demonstrate before/after because their FAFSA will already be on file with the school.

Honestly, they have nothing to lose by doing a FAFSA. Their EFC is going to exceed the cost of attendance at this point...but their kid could get that stafford loan in his/her name.

sueinphilly · 07-03-2009, 09:08 PM

yes, you need to file a fafsa to be able to get stafford loans, which for freshman is up to 5500 in unsubsidized loan which you can get even if you have no need.

SOME schools require the fafsa to be considered for ANY merit aid;

there is NOTHING lost by filing out the fafa

sueinphilly · 07-03-2009, 09:09 PM

thumber1 - we cross posted the same thing!
great minds think alike :-)

oldfort · 07-03-2009, 09:57 PM

Your friend's income would disqualify them for any aid. I am for one would never want to disclose any of my financial information unless absolutely necessary.

dntw8up · 07-03-2009, 10:45 PM

Quote:

I told her that she needed to file one in order to qualify for some loans if she wanted them, and also in case someone loses their job and their circumstances change...you need to have that first FAFSA on file...I also told her that I thought she may need to have the FAFSA on file for some merit aid..."

The loans part is correct. I have read on CC about FAFSA for merit aid, which begs the question what does a family's financial means have to do with merit. I've also read on CC the idea that if you don't file the first year you can't file in subsequent years. Neither of these FAFSA rules exist at my son's school, or at the schools my friends' kids attend. I'm sure it is the rule at some schools, but they may be a small minority, so I would have your friend check with her kid's school. I would only file if it were required for a reason acceptable to me, because I protect my family's financial information as much as possible.

scottaa · 07-03-2009, 11:29 PM

Sounds like you gave her some pretty good advice.

dt123 · 07-04-2009, 01:12 AM

Quote:

I have read on CC about FAFSA for merit aid, which begs the question what does a family's financial means have to do with merit.

Some schools just want to be absolutely sure that you do not qualify for need-based aid before they give you merit aid. The easiest way for the school to make sure is have you file a FAFSA and look at the EFC.

sk8rmom · 07-04-2009, 07:42 AM

If they intend to take loans to help finance her education, this site may help her understand why FAFSA can be necessary.

Federal Student Aid - Federal Aid First

thumper1 · 07-04-2009, 09:07 AM

Quote:

I have read on CC about FAFSA for merit aid, which begs the question what does a family's financial means have to do with merit.

If a student qualifies for any of the federally funded grants (Pell, SEOG) or state need based grants, the schools would use that money FIRST and then award any merit aid beyond that.

In other words, they will use federal and state dollars first and then award merit money at some schools. Thus the need for the finaid application forms.

oldfort · 07-04-2009, 10:30 AM

For unsubsidized loans, you do not need to fill out FAFSA (my daughter has one). The reason why some school requires you to fill out FAFSA the first year is to determine if you need aid or not. Some people do not apply for FA when they do need it, hoping it would help their chance of getting in, then apply for aid later. If a school has a policy of only giving aid to incoming new students, then filling out FAFSA when you are making 300-500, is not going to matter later even if the parents should lose their jobs. If a school has a policy of meeting every student's needs, then filling out FAFSA when your financial situation changes, is also not too late.

My personal view - if you are borderline of getting FA (100-200,000), by showing that to adcom, your kid may not be as desirable as another kid whose family is making 500+ (more certainty of the family able to pay for 4 years).

Unless you know for certain you are going to get something back in return for your personal information, it's best not to disclose it.

cptofthehouse · 07-04-2009, 11:41 AM

It depends on the college and the scholarships whether you need to fill out FAFSA to be eligible for them. One of my sons' schools requires FAFSA for PLUS and unsubsidized Staffords.

dntw8up · 07-04-2009, 12:31 PM

Quote:

If a student qualifies for any of the federally funded grants (Pell, SEOG) or state need based grants, the schools would use that money FIRST and then award any merit aid beyond that.

"Merit aid" is something which with I'm unfamiliar. A merit award "adjusted" based on need sounds like financial aid packaged to sound like a pseudo-honor.

Quote:

Unless you know for certain you are going to get something back in return for your personal information, it's best not to disclose it.

I concur.

thumper1 · 07-04-2009, 12:41 PM

Quote:

"Merit aid" is something which with I'm unfamiliar. A merit award "adjusted" based on need sounds like financial aid packaged to sound like a pseudo-honor.

Schools have limited amounts of resources. If a student is going to get money from the federal government, then the school can use that money for ANOTHER student who is not going to receive those same grants (Pell, etc).

I'm sorry, but I have no problem with this. I think schools should award need based aid first.

NOW having said that...there ARE some scholarships that are awarded without even filing the FAFSA or Profile. Those are merit only.

Another thing to consider...some schools will NOT award institutional aid after the freshman year IF the student does not apply for it when they are entering their freshman year. I know we would all like to think that our financial situations are not going to change drastically, but in these economic times, I would rather be save than sorry. Of course, if you don't want to disclose your finances, that is a reason for not completing the forms...but buyer beware...if you need institutional aid in the future, you should check to see if your school will provide it if you don't file as an incoming freshman.

Also, no evidence of this...but it's my opinion that the "tip" in admissions for being a full pay is overrated. If two candidates are equal and one is full pay and the other is not (and the school is either need aware or NOT need blind), then perhaps a small tip. Also for schools with limited resources, one "might" be asked off of the waitlist if they can pay the full bill before someone who can't...assuming very similar other admission requirements.

BUT I do not believe that a student who is a full pay will be admitted when they would not otherwise be competitive for admissions...unless, of course, they donate a building or endow something substantial. BUT then...these folks probably aren't worrying about whether or not to file a FAFSA