This past week, the Department of Education released another announcement describing an error. The new issue could force the Department of Education to reprocess thousands of applications which will further delay the release to colleges and universities. The delay to these institutions will also shorten admission decisions for thousands of high school seniors because their aid packages have not been finalized. While waiting on the FAFSA, it may be beneficial to consider alternatives.
First, have your student log into the Department of Education/FAFSA website and verify the form has been processed. Once processed, you'll receive a Student Aid Index (SAI) score. This new score replaces the previous equation and evaluates expected family contribution amongst other variables. The purpose of the score was to help colleges more accurately assess student need; however, the commission of inflation as well as the recent issue may be concerning.
I highly recommend reviewing how your SAI may correlate to funding by visiting The College Investor and My College Corner. Both websites have charts and resources to help you navigate the amount of aid versus contribution money for college. If your FAFSA data has been transmitted and you have an SAI, this is what colleges and universities will be using to offer aid packages.
After you have verified your FAFSA form and data are complete, reach out to the admission representative or the financial aid office at your schools to see if they have received the information. The data is being released slowly and with the new error causing a reprocessing, there will be increased delays. Subsequently, many schools are not requiring students to commit until May 15 or later. Again, check with your school to verify any new timeline based on the receipt of your FAFSA information.
Now is the time to do some strategizing...list the schools you have been admitted to and if aid is known, make a note. Verify any athletic scholarships, outstanding grant applications, merit aid or other financial contributions - ensure these are calculated before deciding on school of choice.
In the event your financial aid packages are incomplete or the school has not received your FAFSA, now is a great time to do some research. Research federal loans first as once your FAFSA is on file, you'll be eligible for subsidized and unsubsidized student loans. Next, research any private loan options through credit union or other lending institutions. Be sure to check interest rates, payback timeline, co-signer or other necessary details. Other funding options may include 529 accounts or other investments made on your behalf by family members. Check the fine print on the 529s because not all schools can be paid for with 529 accounts. Case in point: room and board costs cannot be funded from a 529 if the school does not offer on-campus dining facilities and/or meal plan. A tax professional can assist with these fine points.
Finally, apply to scholarships...since the issues with FAFSA are well-known, the landscape for scholarships and other available funding has also changed. Many spring deadlines are being extended to accommodate for an increase in applications and some annual options are also changing the application criteria. Some scholarships are more focused, while others have decreased the amount to provide options to more students. Regardless, while you wait, apply, apply, apply!
I suspect the FAFSA issues will lead many colleges and universities to extend deposit deadlines as well as registration for first-year freshman courses. This will cause a bit of chaos and may be beneficial to last minute acceptances. Stay tuned, the next 30-45 days will be interesting for families with high school seniors!
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