Parent of Two, Highly Knowledgeable in Financial Aid Matters - ASK ME ANYTHING!

@kelsmom is the parent of two adult children, so she understands first-hand the challenges of paying for college and the importance of choosing an affordable school. Her older child attended a private school that meets need and her second child attended an in-state public university. Not only did they work hard to put together initial lists with cost in mind … but both of her kids transferred after freshman year, so they did it twice for each.

She has worked in higher education administration for many years, with experience in financial aid, admissions, and Registrar; her soft spot is for financial aid. kelsmom has more than a dozen years of experience working directly in financial aid, including at the Director level. She has worked hard to gain an understanding of what students/families want (and need to know) and she strives to provide information from that point of view.

Her most recent experience was at a small private graduate school, where she was a “working director.” Previously, she worked at a very large urban public university and a relatively small private college. She has worked directly with students and parents as they have navigated the financial aid process, including assisting with FAFSA completion, explaining aid packages, and identifying issues that may be affecting financial aid. She has attended numerous training sessions at the state and federal level, giving her an excellent understanding of federal aid rules and regulations. In addition, she has been in charge of institutional grant and scholarship programs, giving her insight into how schools distribute internal funds.

kelsmom looks forward to answering financial aid questions!

Are you a parent who accumulated expertise with certain schools or topics (e.g. financial aid, FAFSA, essay writing, test prep, etc.)? Do you have a unique story you want to share to help and inspire other parents? If so and want to be part of our Parents4Parents initiative send me a private message and we’ll connect on next steps.

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@kelsmom, thanks for doing this!

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I am looking forward to providing insight & assistance!

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Thank you @kelsmom for generously offering to answering questions.

  1. What are the 3 most common misconceptions and mistakes made by students and their families in regards to Financial Aid that you have seen in your career?
  2. How difficult was it to get significant financial aid awards when your children transferred schools?
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Is there any reason to not fill out the FAFSA? around what household income means no financial aid? My husband and I have heard the paperwork is crazy and not sure if we need to bother or not. Any guess what income level for a family of 4 would not qualify?


@ChangeTheGame, the most common misconception people have is that financial aid will be offered in an amount that will bridge the gap between what the family THINKS they can afford and what the college costs. At only a select few (very difficult to get into) colleges is this the case. Even then, the aid offered will be the difference between what the COLLEGE calculates the family can afford and what the college costs (often a big difference!). Most schools simply do not have the funds to bridge the cost differential. The admissions folks may say, “Don’t worry, we can help you afford our school,” but the family needs to understand what that actually means. The Net Price Calculator is a good start for understanding costs and potential aid.

A common mistake is when parents do not talk with their children about what they can afford. Parents need to tell students how much they can/will pay for school - for each year (and in total, if you want to make sure they get it done in 4 years!). This is really important. Every year, students are disappointed to find out that they can’t afford the schools to which they have been accepted. Honesty is definitely the best policy in this case.

The final thing people don’t realize is that the majority of federal financial aid is awarded in the form of loans. Yes, loans ARE financial aid. They allow many, many students to afford an education now that can be paid off in the future. Responsible borrowing for a degree has allowed millions to get a degree they might not otherwise be able to afford.

For your second question: When my D switched schools from the small LAC where she had a significant scholarship to a meets-need school, she received an excellent need based package. We knew it would be adequate because she had been accepted to that school the previous year, so we had received an aid package. This school provided amazing aid for three years.

My S had originally attended a state school where he had an automatic scholarship based on test scores/GPA. When he switched schools, he received an automatic transfer scholarship for his sophomore year. He lived at home when he attended that school, so it reduced our costs. We would have paid the extra for our S to attend another school (up to our maximum amount, which we shared with him), but he was happy at the local university.

@CaliforniaMomma, the FAFSA is not difficult to complete at all! I suggest completing it because some schools will require it in order to be considered for scholarships. Your student might get the scholarship even without financial need, but that form needs to be filed. It is required in order for a student to borrow a federal loan (even filthy rich students can borrow an unsubsidized loan). And heck, you might be surprised to get some institutional money, even if your only federal aid ends up being loans.

That said, whether or not you want to fill it out is a personal choice. My son did not complete one for his transfer school, because we knew we wouldn’t get any subsidized loans (which we would have had him borrow, because it’s free money if you pay it back before repayment begins).

The Profile is another story. This is a separate form which some schools require (in addition to FAFSA). More information is required for this than for FAFSA. Again, though, it might pay off. I think filing the form(s) freshman year at least is wise.

This statement is so important: “A common mistake is when parents do not talk with their children about what they can afford. Parents need to tell students how much they can/will pay for school - for each year (and in total, if you want to make sure they get it done in 4 years!).”

Parents, if you do ONE thing, please have this conversation with your kids in a timely fashion. That means before they make a list of colleges. Do it early. It’s very sad to see kids who post asking how they can afford to go to their dream school…or sometimes any school at all.

@kelsmom this is such useful info. I see a lot of posts from upset parents or students who get in and their FA is nowhere near what they expected because they got a different amount when they ran the NPC. They think the college has pulled a bait and switch.

What are common mistakes people make when running NPC’s and why are there sometimes big discrepancies in the amount of FA expected and the amount of FA awarded?

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I hope you can clarify subsidized versus unsubsidized loans.

We had made it a goal to avoid all loans. But for the last half of senior year we are doing subsidized loans with a plan to pay them off quickly.

The debt burden for so many young people is truly tragic.

@Lindagaf, thank you for asking your question. NPCs are pretty easy to complete, and they are accurate as long as the info entered is accurate. Of course, a student might be awarded a scholarship that would not be included in the NPC calculation (only automatic scholarships would be included) - but getting more is better than getting less.

The exception to the NPC being accurate is for self-employed parents at schools that use the Profile or their own financial aid form to collect information. FAFSA-only schools do not add back the business-related deductions, but many schools that use Profile or their own aid form will add them back. This can increase the parent contribution and therefore decrease aid. In this case, families are wise to contact the school’s financial aid office to ask for a financial aid estimate for their situation.


@compmom, thanks for bringing up subsidized/unsubsidized loans. Both are federal loans, and the total of these two loans cannot exceed annual maximums (for dependent freshmen, the maximum is $5,500). Subsidized loans do not accrue interest while the student is in school or for the grace period (six months after the student graduates, leaves school or drops below half time). Unsubsidized loans begin to accrue interest on the amount disbursed as soon as it is disbursed. Interest accrues separate from principal until the grace period defined above expires … and then the interest gets rolled into the principal so the borrower pays interest on the interest (to reduce this hit, pay off the interest before the grace period expires).

Subsidized loans are need based, and they cannot exceed an annual maximum. The total $5,500 loan can be a mix of subsidized and unsubsidized, or it may be all unsubsidized. For freshmen, only $3,500 of the $5,500 total loans can be subsidized. However, if there is insufficient need, the subsidized amount may be less than $3,500 (or none).

Subsidized loan eligibility is determined as follows: Cost of Attendance (COA) - Expected Family Contribution (EFC) - scholarships - grants - Federal Work Study (FWS) = Remaining Need. The subsidized loan can be awarded up to the annual maximum ($3,500 for freshman) or the Remaining Need, whichever is less.

Eligibility for unsubsidized loans is as follows: Cost of Attendance (COA) - scholarships - grants - Federal Work Study (FWS) - Subsidized Loan = Eligibility for Unsubsidized Loan. Typically, the unsubsidized loan offered will be $5,500 - the amount of the subsidized loan (if any). I say “typically” because if the Eligibility for Unsubsidized Loan is low enough, the unsubsidized loan will be reduced so that the total of all financial aid does not exceed the cost of attendance.

Note that some schools do not offer unsubsidized loans in aid packages, but students who qualify may request them from the financial aid office.

Parent PLUS loans may or may not be included in aid packages. They can be requested by the parent. Eligibility: COA - scholarships - grants - FWS - subsidized loans - unsubsidized loans. These loans require a credit check (for bad credit, not for good credit). If the parent is turned down for the loan, the student is able to borrow additional unsubsidized loans (an additional $4,000 unsubsidized loan for freshmen). P.S. If parents are divorced, the parent not included on the FAFSA can apply for a Parent PLUS loan.

Re filing out the FAFSA: we’re a full pay family, but have filed FAFSA each year (dc is a 3rd year now) - and dc received a COVID grant this spring. If we hadn’t, they wouldn’t have given us the grant. Any $$ in our pockets is a good thing from our perspective!

Thanks @kelsmom for this thread.

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After doing it for three kids, the FAFSA now takes me about 15 minutes :slight_smile:

great info @kelsmom on the loans…

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Would most of the common mistakes be along the lines of missing or incorrect information?

E.g. student’s parents are divorced. The college in question requires both parents’ finances. The student puts in only the custodial parent’s finances and gets an unrealistically optimistic estimate. Or the non-custodial parent, not wanting to let the custodial parent know the true state of his/her finances, gives an inaccurately low estimate of his/her income and assets to the student running the net price calculator, resulting in an unrealistically optimistic estimate.

Yes, errors entering information or omitting information will certainly lead to an incorrect NPC result. The only way to get an accurate idea of financial aid is to provide accurate information. And the only way to get an accurate initial award letter at acceptance is to provide accurate information.

Could you please comment on how retirement rollovers are handled on the FAFSA form? From my back seat, this is one of the most common errors folks who have done these rollovers make. They don’t deal with this data correctly on the FAFSA form.

Do you suggest waiting until FAFSA and Profile becomes available on 10/1, or contacting the FA office earlier?
My concern would be that for the ED application, knowing the FA amount would be necessary for our non-full-pay family, and waiting until 10/1 would leave only 1 month for their review and our decision, while they will probably be flooded with such requests at that time.

Although it’s relatively uncommon (at least from the perspective of someone on the aid processing side), errors in reporting retirement account rollovers can really mess things up for the student.

Retirement savings moved from one qualified retirement plan to another qualified plan should not be reported as untaxed income on the FAFSA. However, if a parent/student uses the IRS Data Retrieval Tool embedded in the FAFSA any rollover will be reported incorrectly.

The data retrieval tool does not identify and exclude tax return IRA and/or Pension distributions that have been rolled over into another account. It will take the IRA/Pension distribution minus the taxable portion of the distribution and enter the result as untaxed IRA and/or Pension on your FAFSA. This may result in a higher Expected Family Contribution (EFC) than you should have.

When transferring data in the DRT process, you will be asked if you had a rollover. When you check yes, you will be asked for the amount; enter it here. The amount you enter will be considered when the EFC is calculated. Some schools may want to verify the amount you reported as being rolled over; in this case, they will request documentation.

If you miss the rollover question, DO NOT attempt to correct the information yourself (not sure you even can, since that is probably not a field you can change). By changing any of the tax data, you compromise the data transferred from the IRS.

So what do you do to fix the issue? Contact the school to find out what information they want & how they want you to submit it. If you’re applying to more than one school, you need to do this for EACH school. They will most likely want a note requesting a correction to your FAFSA Untaxed IRA and/or Pension Rollover and a copy of IRS Form 1099 from the organization the IRA or Pension was rolled into. The school will make the necessary updates to the FAFSA.

@ArtsyKidDad, if you have financial aid concerns, I encourage you to contact the financial aid office as early as possible. Schools are typically slammed at the start of the school year, but they should be ready to talk a few weeks into the semester. While some may ask you to wait until after the new FAFSA is released, others have no issue talking with you sooner.

Given layoffs and unemployment due to Covid, it is likely that many families have finances significantly different than those reflected on their 2019 tax returns. As a result, initial awards may need to be appealed after admission. Schools that meet full need and don’t require loans are likely to be inundated with this type of request. What are your thoughts regarding how this will play out this coming year?