Stretching Your Dollar: New FAFSA Guidelines

<div class="block">Kalman Chany, author of Prince Review&#39;s <i>Paying for College</i>, joined &#39;Stretching Your Dollar&#39; to talk about what college students should know about the updated FAFSA guidelines. Changes include new deadlines, modifications to qualifying incomes and ways to maximize the amount of federal student aid.</div>

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For the vast majority of you who say you want to learn more about the new FAFSA. This next segment is for you. The changes aimed at streamlining the process of getting financial aid for college include a new eligibility formula and revised deadlines. So for more on what you need to know, I'm joined by Carmen Cheney, founder of campus consultants and author of the Princeton reviews annual book Paying For College. This 2024 edition comes out September 21st. Welcome you for having me on the show. Yeah, we're happy to have you. So let's dive in. So we'll start with the new deadlines. When should students be applying for federal aid with this new FAFSA? Ok. There are various deadlines set by the school. But the important thing about the new FAFSA under simplification is the form is not going to be available until sometime in December, which everyone's thinking may be as late as December 21st at 11 59 a second before the ball drops at Times Square. So what does that mean for families and students trying to plan for college? Ok. So what that means is families need to be alert. It's not the Oklahoma land rush in most cases that schools have priority filing deadlines and they control what the deadlines are. Some states have deadlines too, but many are pushing them back. For example, University of Vermont has already announced they're going to delay their traditional priority filing date. So you need to look at the individual schools and know from your state agency when you need to file by it. So we also are learning that there's a change in the way that affordability is calculated for families. What can you tell me about that? Ok. In the old rules, they call the number that was generated by the data crunched through the formula, the expected family contribution or EFC that's been replaced with the student aid index or SA I. And so there are major changes to the formula now, even though the form is not out, it's important for families to plan ahead, they're going to be winners, they're going to be losers. So you need to understand how your eligibility is going to change with the new rules and then plan accordingly. So is there any way for families who are watching this program that they can maximize the amount of aid that they receive from the federal government? The biggest mistake a lot of families make. They think that applying for aid doing the form is a participation process. You just fill out the form, but there are numerous ways you can answer the questions on the form. The key is knowing how to answer those questions strategically, the best advantage so that you have the lowest sa I lowest student aid index and demonstrate the highest need for aid. OK. And what would be the best way to answer some of those questions to get that? That depends like the common answer for anything with financial aid. It depends, it depends on your circumstances. It depends where you live, what colleges you're applying to, what your income are your assets are, et cetera. So there are different ways to do that. So there's no cookbook answer to follow, but you need to understand the methodology and the formula and then fit your situation to best way into that formula. Get the lowest student aid index, got it. Now the sibling discount we're learning is going away. What does that mean for families? Ok. So the sibling discount under the old rules were that whatever their parents were expected to pay to college in the formula was divided by the number of dependents in college during that academic year that's going away for people that are low income, that's not gonna have much impact because if they, they, they were at maximum eligibility, they're still at maximum eligibility in most cases. But for middle income families, this is gonna be a big shock and that's why many of the poll respond said they didn't really worry about this. They should because these changes are so significant, they're going to be again, winners and losers, but some colleges will still take those multiple students into account. Now, what about for a student whose parents aren't together anymore? The family has split up or at least the parents are separated. Does this impact them? And if so how, OK, one of the key changes are in the past, the parents were separated, parents, a dependent student, they looked at which parent did the student spend the most time with in the 12 months before you complete the form. Now, it's based on who provides the greater amount of support. But unfortunately, the Department of Ed has not yet defined what that means by support. When do we expect that to be defined? Maybe when the form comes out hopefully before, but that's a big factor that's going there. Also, if you're separated is going to be informally separated, still counted as it has in the past or do you need to be legally separated? I see. Interesting. Ok, so we'll be waiting for those updates. Anything else our students need to know about changes to FAFSA as the school year kicks off again. You want to before you apply, understand how your numbers are going to go into the formula, how that eligibility is going to be determined. It's not simple. Ok. That's a simplification according to the department is not going to be easy, but you need to know how to do things before you apply because they take a snapshot of your situation, you want to show the highest eligibility for aid. All right. Thank you so much for joining really great information.