Campus Overload Live with Jenna Johnson: Understanding FAFSA

Feb 24, 2011

Campus Overload's Jenna Johnson introduces you to ambitious student leaders, journalists, activists, interns and newsmakers from colleges across the country in her blog daily. In her live chat, she'll be answering your questions about college life, on and off campus.

Mark Kantrowitz, a nationally recognized expert on financial aid, will be online with Jenna Thursday, Feb. 24 at 1 p.m. ET, to talk about changes in FAFSA and other ways to pay for college.

Have a question? Ask now.

Hello, everyone! Hope you had a great Presidents' Day...

This morning our education pod has been buzzing about the announcement that Harvard and Princeton will once again offer nonbinding early action admissions. I am interested to hear what you guys think of that decision...

But the main topic of the day is the FAFSA. If you have ever filled one out, I am sure you have questions. Here to answer those questions is Mark Kantrowitz, a true financial aid whiz.

Okay -- I can't wait to hear your questions. Let's roll.

My name is Mark Kantrowitz. I am the publisher of and, the two leading web sites about planning and paying for college. Fastweb is a scholarship matching site. FinAid is an encyclopedic guide to student financial aid information, advice and tools. Both sites are available to the public for free.

I am also the author of a newly published book, Secrets to Winning a Scholarship, which is available on in both Kindle and paperback formats for less than $10.

Today I will answer questions about paying for college, including questions about the Free Application for Federal Student Aid (FAFSA), scholarships, grants, student loans and saving for college. 

I completed the FAFSA for my daughter and I hope I did it correctly. Is there a way to see if it is accurate and correct and how can I check on the status and dollar amounts available?

After you submit the FAFSA the colleges will prepare financial aid award letters. The financial aid award letters will provide you with information about the types and amounts of aid for which your daughter qualified. If there are potential inaccuracies on the FAFSA, it will be selected for verification, in which the college will ask for copies of the source documents for the information on the FAFSA (e.g., IRS Form 1040, W-2 statements, etc.). To check on the status of your FAFSA, go to

Many of the independent scholarships out there are only for undergraduate students, and many universities only have a few select assistantships as a means of providing aid for graduate students. How can I, as a graduate student looking to foot the bill for my own master's degree, fund my education without incurring well over $50K in debt?

Financial aid for graduate school is a bit different than financial aid for undergraduate school. There is no general need-based grant for graduate school like there is for undergraduate school. Instead of scholarships, there are fellowships. (You can search for them on just as you can search for scholarships on the site.) More financial aid is in the form of loans. See for some statistics on the percentage of students graduating from graduate school with debt and the average amount of debt. Unfortuantely, of students applying for financial aid for medicine, law and business, almost 100% graduate with debt. There are also teaching and research assistantships for graduate school, where you get a full or partial tuition waiver and perhaps a small living stipend in exchange for teaching or research duties. Contact the graduate department at the colleges of interest to you, since financial aid for graduate school tends to be decentralized.

Our home needs $68,000 in structural (not cosmetic) repairs due to construction flaws that we haven't been able to "persuade" the builder to fix. So when we file our FAFSA, our assets will include that money (set aside for the repair, which won't happen until spring), yet that money won't be available for our child's college tuition in the summer. It feels wrong to exclude that amount from FAFSA, but by including it, we're not showing the true picture of our finances or the need we'll have for financial aid, since we can't get a scholarship for a home repair. What advice would you give us?

You must include the money on the FAFSA. Otherwise, if your FAFSA is selected for verification, there will be a discrepancy. After you file the FAFSA, ask the college for a professional judgment review. Some colleges will make such an adjustment, others won't. Try to make the case that the money is not reflective of ability to pay during the award year. 

Why can't the schools agree on one form to show our financial information? Some schools want the FAFSA, some want the College Board info (which means doing our taxes 2 months early because we have to include the current tax return, including our 1099s) and I think that others want different information. Our children applying for college is stressful enough!

Most colleges use the FAFSA. Only 250 colleges use the CSS/Financial Aid PROFILE form for awarding their own aid. The PROFILE is a much more detailed form. The colleges that used this form are chasing after a false sense of precision, essentially to try to prevent wealthy families from appearing to be poor by manipulating their income and assets. But this  unfortunately forces many families to answer many more questions. I have testified in favor of simplification of the FAFSA, but there's a risk that further simplification may cause some colleges to adopt their own forms rather than use the FAFSA if the form discards information that the colleges deem important.

Like many parents in the DC area, we don't qualify for aid based on the FAFSA. This is our second child going to college, is there any source for merit aid or other grants not related to income that we could pursue? So much money going out the door!

Financial aid eligibility depends significantly on the number of children enrolled in college at the same time. The federal formula more or less divides the parental contribution by the number of children in college when calculating the EFC. So having two or more children in college at the same time can significantly increase aid eligibility. You should submit the FAFSA every year even if you didn't qualify for aid last year because of this and because the f0rmula changes every year. Also, the FAFSA is a prerequisite for the unsubsidized Stafford and PLUS loans, which do not depend on financial need.

For scholarships, search the scholarship database for free.

For academic scholarships, ask the college admissions office about such awards. These are often automatic, but you won't find them at the top colleges. See for a tool for searching for them. (Such awards are also listed in the Fastweb database, but you have to list the college in your profile to see the available awards at that college.)

Nothing's more annoying than hearing that high-income households have rearranged their finances in a way that their applications for finaid are granted. I can't be there for the discussion, but please post links to articles that tell parents how to manage that.


The ability to manipulate finances is fairly limited. The main tip is to save for college in the parent's name, not the child's. 

I've been accepted and plan to go to a one-year grad program in September, overseas. I've done the FAFSA forms and even got the statement about how much they suspect I/my family can afford, which is pretty accurate. But I haven't gotten any notification from any loan agency offering me a loan. I NEED a loan to attend! How long does this process take, or should I be contacting loan agencies myself? I thought I read that they would contact me. I'm really getting worried I won't be able to attend. Please help!

Federal loans are now available only through the Direct Loan program. You will need to contact the college's financial aid office to obtain them. If the college is not eligible for federal student aid or the program is not affiliated with a US institution that is eligible for federal student  aid, you won't be able to obtain the Stafford and Grad PLUS loans for the college. In such a situation you'll be limited to private student loans. But many are wary of lending for non-US programs.

We don't yet know where our daughter will be attending college, much less what our actual costs will be. We have filed FAFSA and are not eligible for federal aid. Our finanal advisor tells us that our daughter will be eligible for up to $5500 per year of loans in her own name. We are submitting the financial profile form to the two universities that require it. What are our options as far as loans? I really don't want to take out a home equity loan if we can help it. Thanks for taking these questions.

The financial advisor is referring to the Stafford loan. The unsubsidized Stafford loan is available without regard to financial need. The annual loan limits for a dependent student are $5,500 during the freshman year, $6,500 during the sophomore year, $7,500 during the junior year and $7,500 during the senior year. You may also be eligible to borrow from the Parent PLUS loan program, which has an annual limit of up to the full cost of attendance, minus other aid received. The Stafford loan is not based on credit history, while the borrower on the Parent PLUS loan must not have an adverse credit history. An adverse credit history is defined as a five-year lookback for derogatory elements of the credit history (e.g., foreclosure, repossession, bankruptcy, default determination, wage garnishment, tax lien) or a current delinquency on any debt of 90 or more days. If you are not eligible for the Parent PLUS loan, then your daughter will qualify for increased unsubsidized Stafford loan limits. The additional limits are  $4,000 extra per year during the freshman and sophomore years and $5,000 extra per year during the junior and senior years. The unsubsidized Stafford loan has a fixed 6.8% interest rate and the PLUS loan has a fixed 7.9% interest rate. Contact the college's financial aid office after she's accepted the offer of admission to obtain these loans. 

I read somewhere that if you apply for a loan for a foreign school, you have to have a cosigner who resides in the US. I'm in my mid-30s, single, and don't really want to ask my parents to cosign for a loan. Is this a requirement? Thanks!

If the foreign school is not eligible for federal student aid, you will need to get a private student loan. Most private student loan borrowers these days require creditworthy cosigners to be eligible. For example, Sallie Mae recently said that 93% of its private student loans had cosigners. That compares with 50% before the credit crisis.

A commenter on my blog made a good point yesterday: "This year's FAFSA is so much easier to complete than last years. FAFSA is a requirement for financial aid of all types of aid - it is a right of passage. Breather in; breather out; repeat."

The new form is definitely shorter and easier to navigate -- but there is talk of simplifying it even more. What changes would you want to see?


Can financial aid differ from major to major? For example, the goverment has been really pressing the issue of getting people involved in math and science. So is there anymore incentive to do those subjects?

The National SMART Grant provided higher grants to Pell Grant recipients who majored in STEM fields (Sciennce, Technology, Engineering, Mathematics) plus national security languages. That program sunsets this year, however, and will not be extended. Some state grants are major-specific. Major-specific government aid is more common at the graduate level. However, there are many private scholarships that are major-specific. Free scholarship matching web sites like ask for your current or proposed major in order to match you with the major-specific awards for which you are eligible.

I'll soon be filling out the FAFSA for my daughter's sophomore year. Our income has gone down slightly in 2010, and our savings---thanks to college payments!---are also slightly less. Do colleges routinely give families the same aid package each year, or do they make adjustments for changing assets?

Each year's financial aid package is calculated fresh based on the current income and assets.

With 13% of the US college student body now identifying as single heads of households with minor children, can you speak to how these students can maximize their financial aid as well as how FAFSA and TANF benefits do/do not influence each other? Dr. Erin Taylor, SMART in Oklahoma (Single Mother Academic Resource Team)

TANF benefits do not reduce financial aid eligibility.

There is a question on the FAFSA about means-tested federal benefit  programs, such as TANF and WIC. The purpose of this question is to make it easier for these students to qualify for federal student aid. Depending on income, these families may qualify for the simplified needs test (which disregards asset) or automatic zero EFC (which then qualifies the student for a full Pell Grant).

How can I learn more about the different types of loans available and other ways of paying for college?

Mark's two Web sites are a good start -- and The Department of Education's student financial aid Web site is another treasure trove of information, including a few calculators that can help you budget and plan.

As you are searching for information online, pay special attention to who is sponsoring the site.

Can you talk a little about a student filing his or her FAFSA for the 11-12 school year who has either gotten married or divorced since Jan. 1 2011?

There is a recent change that will allow colleges to consider applicant marital status changes that occur after the FAFSA is filed. It is subject to the discretion of the college, but at least they can do this now. Previously updates due to a change in applicant marital status were prohibited.

When a student gets married, the FAFSA is based on the income and assets of the student and spouse, as opposed to the income and assets of the student and parent. The student is considered independent. If the student gets divorced, and is not independent by some other criterion (e.g., over age 24, graduate student, veteran, etc.) then the student will revert to dependent student status and  parental information will once again be required.

How realistic is the FAFSA's determination of the amount of financial support we as a family can contribute toward tuition? I have no idea how we will be able to live in this area and still get by if the school my daughter will be attending *really* expects us to contribute that much!

Most families will have to pay more than the FAFSA's expected family contribution (EFC) figure. This is partly because of gapping (where the college does not meet full demonstrated financial need) and partly due to the inclusion of loans in the financial aid package. Also, the EFC calculation does not consider unsecured consumer debt such as credit cards, auto loans and previous student and parent education loans. So you can think of the EFC as a harsh measure of ability to pay, and more of a rationing system than anything realistic.

Hello, I was wondering, generally speaking, how well university financial aid offices seem to be dealing with the change over from private lenders (who handled much of the actual work of getting money to students) to a government-managed system (which means that the offices themselves are responsible for much of the processing). My spouse is a 3rd year law student, and this year it's taken 7 weeks for him to receive the balance of his loan each semester (the school paid itself the first day of school). In the past, it was a week at most. Now, his institution's FA office has many other issues (like a director who spends 2/3 of her day in a friend's office chatting and has weeks of unread emails from students), so I was wondering if his experience is the new normal.

For the most part the transition to 100% Direct Lending has gone smoothly. There have not been very many serious problems, and those were addressed quickly. There's more work for the colleges on the back-end (you might overhear the financial aid administrator complaining about the reconciliation process, which matches their records with the US Department of Education's records). It should not take 7 weeks for the loans to be disbursed. The US Department of Education disburses funds at least weekly. So the delay is probably occuring in the college's financial aid office. I suggest asking the college why there is a delay.

I am wondering if there is a general rule of thumb regarding a family's income / asset level as to whether or not it even makes sense to even apply for FAFSA?

At the FAFSA.GOV website I entered financial information in the "FAFSA4CASTER". The only "aid" my son would receive based on my family's (2 adults, 3 children) income and investment assets (approx. 150k / 250k respectively) would be in the form of Stafford Loans and a work study job for him and PLUS loans for wife and I, his parents. Is there any other available grant related financial aid available to families whose income/assets disqualify them under FAFSA or is FAFSA the only avenue for financial aid beyond merit grants? 

A lot depends on the number of children in college at the same time. You are probably not going to qualify for a Pell Grant with that income and assets, as less than 1% of families with that income receive Pell Grants. But you do potentially receive other forms of aid from the federal and state government and the college itself. When you have two or more children in college at the same time you should see a reduction in your EFC and an increase in your aid eligibility.

I am a financial consultant. How does FAFSA treat assets held in non-qualified variable annuities (meaning not part of any retirement plan)? My understanding is that such assets do not factor into the EFC calculation in the same way that retirement assets do not.

Annuities that are part of a qualified retirement plan are not reported as an asset on the FAFSA. The regulations and statute are ambiguous as to non-qualified annuities, but my understanding is that such annuities (say, from winning the lottery or as a form of investment) are reported as an asset on the FAFSA.

Distributions from annuities that are not reported as an asset on the FAFSA are treated as income to the beneficiary on the subsequent year's FAFSA. This can have a severe impact on aid eligibility.

With federal and state governments cutting financial aid budgets, will the effect be immediate or is there some lag time (hopefully years) between the votes and when the financial aid drops? Also, with the dwindling pool of government student grants and loans, what is the best strategy for maximizing my student's financial aid?

Most of the cuts will be effective with  the 2011-12 academic year. There are some master calendar provisions with the federal aid that may cause a year delay in the effective date if they take too long to pass changes. Most colleges are putting together financial aid packages around now, so a change in federal aid now could cause a major headache for colleges and families.

This chat overwhelms me. Have you heard stories of friends and family fundraising to help meet their tuition goals? Why does it always come down to loans and forms and all that?

Oh phew -- I thought that I was the only one overwhelmed :)

Yes, yes, loans and scholarships are not the only way to pay for college. In addition to parents and students  saving ahead (a concept sometimes forgotten) or hoping for generous graduation gifts, I have read about a few families holding fundraisers to pay for college... although usually there's another factor in play, like a family illness or hardship.

Another new avenue: A few micro-financing Web sites have popped up, such as, which connect students-in-need-of-cash with individuals or organizations willing to lend.

I will have three in college next year, including my 24 year old who may or may not complete his associate degree this spring... the other two will be in 4 year schools. Will I be able to have his costs considered by the FAFSA or is he too old? Even at community college prices, this genius has cost me a fortune.

If you provide the 24-year-old with more than half his support, you can count him in household size and number in college on his sibling's FAFSAs even though he is considered an independent student on his own FAFSA.

I am almost positive that we won't qualify for aid under the FAFSA. Is it even worth filling out the form? Is there some ancillary benefit that we don't know about? Thanks!

Most of the financial aid officers I know always, always tell parents to fill out the FAFSA, even if they don't think they will qualify for aid. You just never know. Plus, some scholarships or programs require students to fill out a FAFSA to participate, so it's a good form to have on file.

I was talking with a friend who had to sell her home at a loss because she lost her job. Her family is now renting a house. She said that one bright spot is that, because they don't own a home anymore, they won't be expected to list it as an asset on the FAFSA and can't be expected to borrow against it. I don't want to burst her bubble... but is she right?

The family's principle place of residence is not reported as an asset on the FAFSA. Only second homes and investment real estate. On the PROFILE form net home equity is reported, but it is capped at 2-3 times income. If selling the home yielded an increase in non-home assets (e.g., cash in a bank account), that asset will be fully considered by both formulas. So in most cases selling a home increases the EFC and decreases need-based aid eligibility.

Please be kind when you correct her misunderstanding of the need analysis formulas. 

Some great questions so far -- keep them coming! We have about 15 minutes left to chat.

I am curious: Do parents always fill out the FAFSA for their children? Do any families encourage their children to fill out the paperwork themselves?

No Question - just a comment after reading some of the questions and your responses below. Our family too did not qualify for financial aid via FAFSA. It is sad how socialized our country has become in that the people that work so hard are having to foot the bill through through tax dollar subsidies for these types of programs but yet cannot qualify ourselves for our own children. The incentive to work hard in this country is being taken away slowly but surely. It makes me sick.

Passing along this comment from a reader...

As someone who is going to attend Medical School next year, I am confused about how FAFSA functions for it. I know that it differs from undergraduate funding, but in which ways? Will all of my med school loans come from filling out the FAFSA? Or will I diversify between private and public lenders?

Your med school loans will come from the federal Stafford and PLUS loans, which you will obtain through the college's financial aid office. You generally will not need private student loans until you are in your residency and internship.  

I about to begin a second BSN degree in another career field (nursing). This is the only way in for many "older" workers who wish to change careers in mid-life. I'm no longer a dependent, single, have been unemployed for awhile and have some modest savings. I was so disappointed to find out that there is no need-based aid given to second degree students. I'm eligible for some sub and un-subbed loans, but not enough to cover my costs. The first time around, my parent's income made me ineligible for need-based FAFSA as well, but this time around, I could really use it. Why is need-based aid not an option for those of us taking this educational route? It must be so discouraging for many people who want to better themselves or try something new.

The lack of aid for a second bachelor's degree is due to a statutory restriction. I address this in my Ask Kantro column.

How will having a 22 year old starting graduate school (independent for financial purposes) affect, if at all, any financial aid that our 18 year old will eligible for (she will be a freshman in the fall)? Also, how do parents' finances play into the financial aid prospects for our independent grad student? Thanks for your help!

As noted in the answer to a previous question, if you are providing more than half support to the graduate student, you can include him or her in the family size and number in college for the sibling.

For federal student aid the graduate student is considered independent and the aid will not depend on parent income and assets. However, the colleges may still ask for parental information for the college's own aid funds, depending on the field of study. This is especially c0mmon for law school, where some colleges ask for parental information even if the student is 30 years old.

On a lighter note: The financial aid staff at Fresno Pacific University put together a funny video about applying for financial aid. Financial Aid Director Ken Isaak explains the process to Tad Sockington, a rather clueless sock puppet. 

The Sockingtons - The Deadline from Fresno Pacific University on Vimeo.

We have 10 minutes left. Any more questions?

Does the FAFSA take the age of the parents into account when calculating the EFC?

Yes. The asset protection allowance is based on the age of the older parent. The older the parent, the higher the asset protection allowance. The asset protection allowance is intended to be the present value of an annuity which will supplement Social Security benefits at retirement up to a moderate income level. That sounds complicated, but for most parents of college-age children it shelters about $50,000 in assets. Other than that, the FAFSA does not consider the age of the parents.

Can you explain how this suggestion helps you in the fasfa process? How does it increase your chances of aid?

Money in a qualified retirement plan is ignored as an asset on the FAFSA. However, the current year contribution to the retirement plan is treated as untaxed income and added back to taxable income. So it is best to make such contributions prior to the previous year so that they count as neither income nor assets.

I am in my 30s and considering going back to school for a second bachelors... I clicked on the link you provided in your answer to the nursing student... Good info, I hadn't realized that. Given the restrictions, do I even need to fill out the FAFSA for a Stafford Loan (assuming I qualify for one)? I've got some GI Bill left, which will help with tuition, but I'll definitely still need some loans to cover living expenses while I'm a student. Thanks.

To get the unsubsidized Stafford you must file the FAFSA even if that is the only form of aid you expect to receive. 

Lots of great questions today! Mark, thank you so much for taking the time to explain the fascinating world of financial aid.

And good luck to everyone filling out the FAFSA!

Thank you for all your questions. I found them to be very interesting. For more information about planning and paying for college, please visit and My new book, Secrets to Winning a Scholarship, is available on for $9.95 paperback and $5.95 Kindlle. 

In This Chat
Jenna Johnson
Jenna Johnson writes about college students and campus trends for the Post. She also runs the blog "Campus Overload," which chronicles national college news, drinking fads, admissions buzz and the latest exploits of Hill interns.
Mark Kantrowitz
Mark Kantrowitz is a nationally recognized expert on student financial aid and paying for college. He is the founder and publisher of, the leading source for clear and unbiased financial aid information, advice and tools; and publisher of, the most popular and complete free scholarship matching site. He has two Bachelor of Science degrees from the Massachusetts Institute of Technology (MIT), a Master of Science degree from Carnegie Mellon University (CMU), and is ABD on a PhD from CMU.
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