Patience, all - update on 2024-25 FAFSA

Paying for College
461

It doesn’t necessarily imply that, because the Family Size is needed in a couple of other places. It is needed when comparing one’s AGI to certain multiples of FPL for the given Family Size. Also Family Size is used to determine Income Protection Allowance.

Actually Family Size should automatically come straight off the tax return, so presumably it is only asked on the FAFSA form to give someone the chance to claim a different size. It first asks a yes/no question on parent form “Is the parent’s family size different from the number of individuals claimed on their 2022 tax return?”, so “no” (which most would answer) means it takes the size from the tax return, while “yes” would presumably lead to more questions to dispute that size.

In any case Family Size is a needed input to the formulas, as I listed above, which needn’t imply it is also used for other things.

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462

All aid except unsubsidized loans is used when determining whether need is met. Even non need based aid like merit scholarships are used in the calculation. COA - SAI -total of all scholarships/grants = Need. Need can be met with federal need based aid of work study and/or subsidized loans (I’m going to do the examples without work study to keep it simple).

Example (all grant amounts are just numbers used for illustration - I don’t know what the Pell would actually be or whether the school might award a grant):

COA = $16,000; SAI = $3,000

Pell Grant = $5,200

Institutional Grant = $4,800

Total scholarships/grants = $10,000

Let’s calculate Need, which is used when determining how much federal need based aid (work study and/or sub loans) can be awarded. Need = COA - SAI - total scholarships/grants. In this example, Need = $16,000 COA - $3,000 SAI - $10,000 total scholarships/grants = $3,000.

The student can receive a subsidized loan in the amount of Need, which we determined is $3,000. All aid now totals $10,000 scholarships/grants + $3,000 subsidized loan = $13,000. Once this is awarded, the total of **SAI + all aid ** is equal to COA.

But notice that the total of all aid (not SAI + all aid) does not equal COA. Aid totals $13,000, so there is another $3,000 left until COA is met. This can be done using an unsubsidized loan, which does not count against Need. But the maximum a freshman can receive is $5,500 sub+unsub (of which up to $3,500 “can” be sub, depending on Need). This student already received $3,000 sub loan, so they can only receive $2,500 in unsub because they reached the max loan amount for freshman. After all aid possible is awarded, the student has no unmet need, but they have a gap of $500 between COA and total aid.

Now a $500 outside scholarship is received. The student has room for the scholarship, because there is a $500 gap. However, because Need has already been met with previous aid, adjustments have to be made so that there is no federal overaward. The total aid that counts in the formula used to determine whether Need is met is now $13,500. Note that we determined earlier that Need = $13,000. At this point, there is a federal overaward.. There is not an overaward of all aid, because the student had $500 room before COA was met. It’s an overaward of need based aid. The school can do one of two things (their choice, according to their policies): they can reduce their institutional grant by $500 or reduce the subsidized loan by $500. Either way, the total of all aid now equals Need again, so there is no federal overaward. And now the total of all aid equals COA. The award total went up $500, and there is no overaward . But if the portion of the awards that affect Need weren’t adjusted, there would be a federal overaward.

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463

Again, thanks for your time. It’s still all greek to me. Here is how it sounds to a layman.

Let’s say last year I had a kid at a college with total COA of 80k. My EFC was 20k, so in the end I arrived at the 80k through:

Parents wrote a check for 10k, student did work study for 5k, student borrowed 5k in a federally guaranteed loan, and the college gave me 60k in scholarships. So I fulfilled my 20k EFC and the college gave me 60k, which is not an overaward because we paid the 20k FSA determined that we could, through the various means that are allowed.

But this year my SAI doubles to 40k. That is, FSA says hey, that’s how much you can pay now.

So like last year I write a check for 10k, the kid does 5k in work study and the kid borrows 5k. Same 20k.

I call the college and say I look forward to getting my 60k in scholarships. But the college says hey whoa, you only need 40k, according to FSA.

I say yeah I know. They totally said we can afford 40k, but they are wrong. So send me the 60k anyway.

They can send me the 60k just like last year and not put me into overaward?

They can give me $60k in aid even though between my contribution, my kid’s work study contribution and my federal loan, I have only pitched in 20k towards the 40k FSA says I can afford?

They don’t take away my work study or take away my federally subsidized loan because the school gave me $20k more than FSA said I need?

464

Does this school meet full need and require CSS profile?

465

In this example they met it the previous year, so let’s assume so.

How would it be different if they didn’t guarantee to do so? My federally determined need just went down substantially. So it would be easy for them to meet this need. Although it would be difficult for me to find the other 20k.

But yes, let’s assume in the example that they meet need and that they don’t require CSS.

466

COA $60,000
SAI $40,000

Need = $20,000. (60k-40k)

You don’t qualify for Pell, just work study and loans for federal aid.The school can award $20,000 in total aid if they are going to award any federal aid. To award a combination of institutional scholarships/grants, work study and subsidized loans that exceeds $20,000 does put you in an overaward situation.

However, if the school were to not award you any work study or subsidized loans, they could give you as much of their own aid as they wanted. In this case, if they gave you $40,000 of their own aid and no federal need based aid, it would be fine from the point of view of a federal overaward. But if the school doesn’t want to do that, they don’t have to. And if their policy is to award subsidized loans and work study before institutional grants, then they can’t give you a grant that results in a federal overaward - so they are limited because of their policy.

I should add that they can award the annual max loan amount, unsubsidized only, if they were to award no work study or subsidized loans and as long as COA minus scholarships/grants is at least the annual loan max.

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467

Any idea how this applies if the college is one that doesn’t package loans and instead meets all need with grants? (But a federal loan is available should you want to take it). I’m going to guess that the available loan is all unsubsidized for those schools that have moved to meeting all need with grants so in that case there is no overaward to worry about because the federal aid of an unsub loan isn’t need based so the college can award as much as they want using their own calculation of need and not the SAI? (Unless the student receives a Pell Grant)

468

You’re correct. The loan would be available, all unsubsidized, in the scenario you described. But of course, the unsubsidized loan is limited to the annual loan maximum for year in school. And COA - federally calculated SAI - scholarships/grants must be at least as great as the loan amount.

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469

I’m not talking about family size. I’m talking about number of siblings in college at the same time. There is a difference.

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470

The question was left on the FAFSA, but it is not one of the questions that have to be on it after simplification. The fact that it was left on is perplexing, and I would not be surprised if it drops off for next year.

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471

What are the consequences of receiving an over-award?

472

Schools are required to resolve overaward situations. One of my jobs involved monitoring for overawards and adjusting aid when I found them. If we didn’t do that, we risked being dinged on our annual outside audit. If the student had to repay some money to the school because the school had to reduce awards that were already disbursed, they would owe a balance to the school. It’s possible that students might be reported to Federal Student Aid for an overaward (schools I worked for didn’t do that unless it was a very unusual situation). When that happens, the student is not eligible for federal aid again until they repay the government.

473

Oops! :face_with_open_eyes_and_hand_over_mouth:

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474

I guess I am just not getting it. In my example I said COA was 80k. Not 60k. So I think I am not even understanding what COA is. Sorry for the rambling.

Long short, last year if you had two kids in school and your EFC was 20k, you had to find roughly 10k per kid. Now that they can’t count both kids under the same SAI, you have to come up with twice as much, or 40k.

That seems bad to me. I am looking at the guidance and it specifically says school cannot just count both kids across he board, and that doing so would put the school at legal risk. And the federal guidance says, specifically, that any outside aid pushes you into overpayment. And there are rumblings that to do it the schools have to resort to professional judgement determinations.

Maybe it’s not a big deal and it doesn’t matter and schools can just do whatever they want. I know that’s not what you are suggesting, but I see absolutely zero chance that the average lay person will have any chance to make any sense of this or hold schools to account. But as someone with twins heading into school, and as someone who’s relative’s EFC/SAI just went from 30k to 60k, and will next year be 90k, I will believe it when I see it.

475

Sorry that I put $60,000 when it should be $80,000. But the facts remain the same. The federal SAI formula has changed, which is going to impact some families. A school can award only institutional aid if it wants to award a student more money than they could otherwise. Schools can also take educational costs of siblings into account when awarding aid, but this is not guaranteed and each case is determined on its own merits, within federal guidelines, and in accordance with school policies.

But it sounds like your children aren’t in school yet. So you know beforehand about the changes, and you can help your children set reasonable budgets for schools that you can afford. State schools, schools where your child might get merit, schools with automatic merit … there are options.

476

Yes, but I think I am pretty much confirming what I thought after all.

If a family had a EFC of 20K, and suddenly it’s 40, my question was whether the school and the family could just do whatever it is they were doing before. The school was happy giving X in aid, the family was happy paying X, the student borrowing Y the going federal rate and earning Z in work study.

Since everybody was happy with that last year, could they just do it again, or would it push them into overward. I believe that it does. There is no way to make everybody whole. Seems to me that either the family needs to pay/borrow/earn more through WS, or the school has to offer even more through financial aid to cover the lost loan/WS.

My question being if my EFC goes from 20k to 40k, who covers the extra 20k? If it were not for the overpayment rule, the school could just do what it had been doing. BUt if it does I get dinged the federal aid, however it’s coming in.

As far as having lots of time to figure it out, I don’t know. I can always turn down packages we can’t afford. But in addition to the change in the fafsa which is doubling my EFC, it has been delayed by months and I do not expect having clarity for some time, especially if I have to go through the turmoil of a PJ request, which thousands and thousands of other people will be doing.

Oy.

477

Only if the school awards the student federally funded aid (am I correct @Kelsmom). Some schools have deep enough pockets that they can award institutional aid to students to attend. For kids attending expensive private colleges, let’s face it, the bulk of their need based aid IS institutional aid. So…the colleges might have to pick up a Pell Grant and subsidized loan (if the student no longer qualifies) which for most colleges that meet full need for all shouldn’t break the bank.

478

It seems to me you are overcomplicating it. Run the NPC at some schools and show two kids; that should give you an idea. I’m going to have two kids in college for the 2024-25 school year. S24 will be attending a CSS school, so when he got his ED acceptance in early December, it had the entire package included - and it took into consideration two students. The money awarded was in the form of an institutional grant. S22 is at a FAFSA-only private school, but I’m going to ask them in a month or so where they stand on two students at the same time. My S22 gets merit from that school and some tiny housing grant of maybe 1k.

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479

I have been getting that same message every time I log in to check progress ( we completed the FAFSA on 1/5) and we are both receiving an email saying “Your Fafsa ID has been changed” . We all signed, checked and submitted. We received confirmation with a “SAI cannot be calculated” and also " Based on the criteria you don’t appear to be eligible for a Federal Pell Grant. However, you may be eligible for other federal, state, or institutional grants; scholarships; and/or work study programs. I just want to start a new FAFSA and resubmit at this point!

480

Sounds exactly like our issues. Are you able to find the SAI anywhere on the site? We likely don’t qualify but I would still like to know what it calculated. A assume the schools will each send us an offer noting that we don’t qualify,?