This doesn’t mean that their aid will be reduced. I agree this FAFSA rollout is a mess…and very delayed, and not working well, etc. BUT regarding need based aid…please wait and see.
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If they are at CSS Profile schools they probably still take siblings into account. If they are at FAFSA only schools, the school isn’t likely meeting full need/getting anywhere close to ones SAI or previously EFC…so aid might not be reduced at all.
I do agree that financial aid offices are swamped and it’s going to get worse once they get the FAFSA data at the end of the month. I don’t see many turning around all FA offers by the end of Feb.
When our kids were returning students in college, they got their financial aid packages for the following year near the end of the spring term…not in February.
What I can’t see is financial aid offices getting real aid packages to all incoming freshmen by April.
Hopefully they can do EA and ED packages by then (and RD by mid April), but I agree they are going to be deluged with contacts and prof judgment requests. Not to mention many FA offices are short staffed!
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Costs associated with multiple children in college may be considered by schools. Whether and how this might be done will vary by school. Students can request that the actual costs their parents are paying for siblings be considered. This is a huge, time consuming pain in the rear for schools, but they should establish a process for students to request this. How it will translate in terms of aid remains to be seen, but you CAN request that those additional college costs at least be considered. Of course, if the sibling has a full ride or goes to a low cost CC, there won’t be much impact - but if the parents are paying a lot for the sibling, it could result in changes beneficial to the student (although if the school doesn’t meet need, it might not make a difference in aid). For returning students, the sibling’s costs might allow them to avoid losing aid (might, not will - but won’t if you don’t ask).
The rules around how this can be considered are not set in stone. It’s up to schools to figure out if it makes sense for each individual case. If you like getting into the weeds, see this: NASFAA AskRegs: Can We Use Professional Judgment To Adjust For Number In College Starting With 2024-25?.
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Yes we saw that. I feel for the FA officers. Here’s what I see their solicitors pointing to: “the institution has to make its own risk assessment given the potential liabilities that could come from an audit, program review, or Office of Inspector General review accusing the institution of using PJ to intentionally circumvent the law.”
I see above someone mentioned that CSS schools might just count additional kids in college like before. I was even on a financial aid webinar with a SLAC that guarantees full financial need; they said they were just counting the extra kids, like before. But this guidance warns that they can’t do that: “the FAA cannot adjust for the number in college across-the-board for all students who report other family members in college on the FAFSA.”
So follow the letter of the law strictly and have kids withdraw, unable to pay. Or make an across the board determination that you’ll just treat it like you did before, and get killed in a federal audit. Or go case by case, essentially guessing what you think you can get the family to cough up, losing a bunch of them while killing your staff as they respond to call after call after call. All while following vague guidance that puts your institution at risk.
It’s no win. And really poorly structured. They people in charge had three years to role this out. Oy.
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A school can do whatever they want in terms of awarding their own funds. They can award institutional aid counting siblings if they want … but they have to make sure to keep the federal aid calculations separate. So the school that said they would count siblings in college may well do that when awarding their own aid. If they use Profile, they’re used to keeping federal and institutional methodologies separate.
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Still very confused how this works.
Say last year my EFC was 20k. School met my full need, even with all of their own money, and I paid 20k through family contribution, loan and work study. If right before school started I won a $500 scholarship from the Elks, it is my understanding that the school has to reduce my aid by $500 or I am in overpayment. So some combination of loans/work study goes away. Right?
Now let’s say my SAI goes to $40k. Whether the school or the Elks or some national scholarship gets me down to 20k, I am automatically in overpayment, right? The federal government says that I can pay $40k, and any aid from any source getting me below that is overpayment. So I am still paying $20k and the school says I am whole, but I no longer get a subsidized/guaranteed federal loan or work study to pay that $20k.
I am new to all this. So I am likely wrong and appreciate your help. But if the federal government determines need, and has a rule that says your aid is decreased any time aid from any source gets you into overpayment, it seems to me that the EFC actually matters in this regard, and I don’t understand how schools can just ignore the overpayment rule. If the scholarship from the Elks comes out of my loan/work study, why wouldn’t the scholarship from the University Scholarship Fund result in the same?
I am sure we will figure something out. But this process is bonkers.
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My S24 applied to LACs and has a sibling in college, so I was VERY interested in whether the schools would consider multiple siblings. From all the chatter almost all CSS schools are taking multiples into consideration.
But on another issue, I think the there are a lot of things that need to happen in a very short time.
So how is this practically going to work? Will FAFSA send an email to families on January 30 saying you have 48 hours to make corrections before we send it to colleges? But then after the family makes the correction, does it need to go into processing again??
As @kelsmom stated above, we assumed (so very innocently) that if a family submitted on 1/3, the form would be processed by 1/10 or so, allowing the family to make corrections, and then the form would be finalized by the end of January. Now, are millions of forms going to be opened up for “post-processing corrections” on the same day? If that is the case, what a cluster jam it will be trying to get FAFSA the next day.
I’m on several FB pages, and the mistakes people are making are often human errors, but many others are system errors. But either way, people need to be able to correct/fix/finalize.
And there also may be thousands of people who blissfully followed the advice of their state/district/counselor and mistakenly checked the free lunch question. What will happen to all those people who didn’t have to submit assets?
Anyway, the best thing that could happen now is if the gov’t could somehow process the millions of submissions already turned in during the next week or so in order to start getting the ball rolling.
This only applies to awarding of federal funds, I believe.
It’s confusing, at least to a lay person. Here are the guidelines:
It says in one place, “(unsubsidized aid can replace all or part of the
EFC).”
But in the very next paragraph it says: “While your school must always take care not to overaward a student when packaging his or her aid, circumstances may change after you have packaged the student’s aid that result in an overaward. For instance, the
student may receive a scholarship or grant from an outside organization.
When an overaward situation arises, you may be required to adjust the
Title IV aid in the student’s package in order to eliminate the overaward.”
So it says as long as it’s not subsidized, it can offset EFC. But in the next breath it says money from “outside organizations” qualify as overpayment and need-based aid must be adjusted accordingly.
I know that this is how many colleges around here treat it. If a kid wins money from a local scholarship, the college typically reduces the aid package accordingly. So if the Elks gives money to a kid in these circumstances, they are essentially giving money to the college. I know that in some circumstances the scholarship organizations have stopped sending money to the colleges and just give it directly to the kid. They are supposed to claim it. Do they? That’s up to them.
Let’s say that the cost of attendance is $60,000 and SAI is $20,000. You’re not eligible for Pell, so the only federal aid would be loans and possibly work study. The subsidized portion of loans is awarded based on need, as is work study (up to $3,500 subsidized loan for freshman year). The unsubsidized portion ($5,500 less any subsidized portion for freshman year) can replace the SAI. So in a simple example, need based on FAFSA SAI is $60,000-$20,000=$40,000. The school might award a $3,500 subsidized loan, a $2,000 unsubsidized loan, and a $34,500 institutional grant. This would fully meet need. If you got a $500 Elks scholarship, the award package does not have to be adjusted based on federal regulations. This is because it’s not an overaward … the $2,000 unsubsidized loan is not based on need, so up to $2,000 could be brought in from outside sources without requiring adjustments to aid. BUT … the school may have its own policies about how outside aid is treated. If the policy is that it decreases the institutional grant, that’s what will happen. In this case, the overall aid package decreases by $500 because unsubsidized loans have already been maxed out. If the school policy allows it to replace family contribution, the subsidized loan will drop to $3,000 and the unsubsidized loan will increase to $2,500.
A CSS school will award based on its own calculation of family contribution (from Profile), so it’s not always as simple as the above example. Let’s say SAI is $35,000 this year and the school decides to consider a second child in college for institutional aid. Perhaps they determine that the adjusted family contribution is $20,000 for awarding institutional aid. To determine institutional aid, the school will use $60,000-$20,000=$40,000 need. They might award an institutional grant of $34,500 and an unsubsidized loan of $5,500. In this case, the whole loan has to be unsubsidized, because it has to follow federal rules, using SAI to determine need: $60,000-$35,000=$25,000. Since the institutional grant is >$25,000 there is no federal need to allow a subsidized loan. In this case, a $500 scholarship would decrease the institutional grant. The federal loan is already maxed at $5,500 unsubsidized, so there’s no change to the loan. However, if the school chooses to allow the scholarship to replace family contribution, the loan still isn’t decreased … because the unsubsidized loan is not need based, and there is no federal overaward.
Yes, it’s confusing!
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@kelsmom I thought that since the question about multiple siblings was ON this new FAFSA that colleges could consider this when awarding their institutional need based aid.
Yes, they can. They still have to award a FEDERAL overaward.
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I feel like I’m being really thick headed here. But then what does this mean?
“While your school must always take care not to overaward a student when packaging his or her aid, circumstances may change after you have packaged the student’s aid that result in an overaward. For instance, the
student may receive a scholarship or grant from an outside organization.“
And why does the guidance for FAAs listed above say schools can’t issue across the board consideration of extra kids in school, which it says would be circumventing the new law? And why does it argue instead for the laborious process of professional judgement?
If the question on the FAFSA means colleges can just keep counting those kids, why would a college go the PJ route?
Is there going to be a correction period if we filed during the soft release or whatever they are calling it? I submitted yesterday. It seemed easy. Then I read that we no longer have to list a sibling’s 529 as a parent asset. If that is true I need to edit my form and right now it won’t let me. Does anyone know if 1.) there will be an edit period and 2.) is it true that siblings 529 (parent owned w/sibling as beneficiary) do not get listed as a parent asset?
I believe this is true for the FAFSA but that both will still be reported on the CSS
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We assume there will be a correction/edit time period, presumably at the end of the month.
Yes, only the 529 for which the student is the beneficiary is listed on FAFSA.
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delete, found my answer!
It would be nice if the little ‘i’ in the circle on the form that explains what they are including mentioned that!!!