Deciphering the Mysteries of the FAFSA Tom Melecki, PhD Director, Financial Aid Policy The University of Texas at Austin

Today... Why the FAFSA? Why the FAFSA? Why is it so complicated? Why is it so complicated? Common FAFSA errors Common FAFSA errors What’s next for FAFSA? What’s next for FAFSA?

Why the FAFSA?

FAFSA replaces ACT/CSSFAFSA replaces ACT/CSS 1992 ACT competes with CSSACT competes with CSS 1974 College Board forms CSSCollege Board forms CSS 1954

Why the FAFSA ?

Why is it so complicated?

Common FAFSA errors

6. Missing parent information Mostly when parents are divorced/ separated Custodial parent Stepparent “Other” parent

Solutions... Custodial parent Parent the student lived with more during past 12 months, but If student did not live with one parent more than other Parent who last provided more financial support

Solutions... Stepparent If divorced/separated/widowed parent is remarried New spouse is stepparent Answer all parental questions about both parent and stepparent

Solutions... “Other” parent Legal parents living together Biological/adoptive Same-sex legal parents married and living together Unless they adopted, not grandparents, aunts, uncles, foster parents, legal guardians, widowed stepparents

5. Misreported assets Overstate net worth Cash, checking, savings Investments Business/farm Report parents’ retirement assets

Solution... Report investment net worth Net worth = current value minus debt Investments are not family home Except part with own entrance, bath, and kitchen if rented to non-family

Solution... Don’t report certain assets Life insurance Retirement 401(k) plans Annuities Keogh plans Non-education IRAs Pension plans Funds under Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA)

4. Inaccurate income Incorrect AGI Federal income tax Forgot to report Untaxed income

Solution... AGI and federal income tax 1040 form Lines 37 and A form Lines 21 and EZ form Lines 4 and 10 Watch out for misplaced decimal points!

Solutions... Untaxed income Instructions for FAFSA Item 94 Half of untaxed income answers can be pulled straight from lines on federal income tax return

3. FAFSA filed too late After priority deadline for State Institution

Solution... Do some quick research! Most state priority deadlines on right side of first page of FAFSA Institutional deadlines on financial aid office websites

2. Wrong identity Name: Misspelled, incomplete, unofficial Social security number: Incomplete, digits transposed

Solution... Use social security card Complete FAFSA using social security card’s: Exact name Social security number

1. FAFSA never filed We’re not eligible, anyway: Income too high Home too valuable Too much saved for retirement Takes too long Too much work to complete

Solution... Always submit a FAFSA! 2 million students could have qualified for Pell Grant had they submitted FAFSAs 1.3 million would have qualified for maximum Pell Grant FAFSA-on-line takes only about 30 minutes

Keep good financial records! Prior year’s W-2 forms Federal income tax returns Untaxed income records Current Bank statements/investment records Social Security Card Driver's license Alien registration/permanent resident card

Complete it carefully Read all FAFSA Questions Instructions Double-check every answer Do it again Do it again some more!

Whenever in doubt Go to fafsa.ed.gov Step-by-step instructions Use FAFSA4caster View instructional videos Call for help Government at Financial aid office

What’s next for FAFSA?

FAFSA Reforms? FAFSA Parent Income = Family Size = 2-Question FAFSA Prior-Prior Year FAFSA