FAFSA:FACTS AND OPINIONS
by Howard Freedman
Copyright 2024 Financial Aid Consulting. All rights reserved. Without the author's permission, no portion of this article may be reproduced mechanically, electronically, by photocopying, or by any other means.Howard can be reached at finaidguy@gmail.comAn Overview
The FAFSA (Free Application for Student Aid) has existed since 1992. It has undergone metamorphic overhauls to generate a number called the SAI (Student Aid Index). This critical number is the calculated amount a family ‘should be able’ to contribute toward the annual cost of college. This is based on the prior year's tax return, student and parent incomes, family size, business ownership, assets, and specific demographics. It uses this data and algorithms to make qualified applicants eligible for at least a Subsidized and Unsubsidized Stafford loan. These loans are for $5500, $6500, $7500, and $7500 for the freshman, sophomore, Junior and Senior years. It is the only loan for which the student is responsible for repayment. Free money comes from FSEOG and Pell Grants, which are offered to the most needy. Finally comes the Federal Work-Study program, which encourages needy students to obtain employment in collegiate and nonprofit positions, earning up to $2500 of subsidized employment. The money is not handed to them as aid per se but is based on available employment if the student pursues it.
The SAI is also a benchmark for awarding college-controlled aid at their discretion. Parent PLUS and alternative loans are out of the FAFSAS picture. Merit aid is usually granted through the admissions department based primarily on academics, test scores, talent, athletics, and other criteria. According to the USA
Consulting Opinion
My consulting background taught me to be an objective, creative problem solver. Consulting has also taught me that change should involve a cross-section of the hands-on participants impacted by change and doing the work. They should be involved in system design specifications, testing, and troubleshooting. This happens when organizations are mandated to comply with aggressive implementation schedules.
Starting with the 2024-2025 academic year, the U.S. Department of Education made a massive FAFSA overhaul. They reduced the number of questions and added some new ones, yet added additional steps for the students' parents and contributors, coupled with redundant security steps that made the participants feel guilty of wrongdoing by completing the form. It ignored the fact that a short distance between two points is a straight line, not one that duplicates a process that could be quicker by eliminating dual inputs and removing questions that do not impact tree financial aid calculations. Change is positive if done incrementally to tweak the system to friendly product quality and constantly.
Recent improvements have helped the neediest families and those only interested in Stafford loans. It hasn’t helped those with multiple children in college, the middle class, and still left many afraid and cynical of this form.
I know that the acronym FAFSA stands for Free Application For Student Aid. Of course, the FAFSA, like the IRS form 1040 and other federal and state forms, is free. However, the Student Aid part is only for federal student aid and does not guarantee any other Free financial assistance.
I want to be creative by making the acronym for the FAFSA stand for Factual Advice For Strategic Actions. As stated on many occasions, the fears and duress regarding the FAFSA form come down to affordability, coupling financial alternative loans, and the appeal process if necessary.
To add another acronym, FAFSA is Financial Aid Frightens Some Adults. This is often the case when I observe many parents exiting financial aid nights at high schools or forums. Their first reaction is to refrain from completing a FAFSA since they may not qualify for much aid or need further clarification about the form. To some, it may feel like turning the Wheel of Fortune, giving it a good spin, and letting chance determine where it will end. That is why paying for college should never be left to chance.
My best comparison about completing the FAFSA on your own or retaining a qualified financial aid consultant can be compared to the IRS tax forms. There is no question that they are free to complete it, yet the IRS lists many services that can make it accessible for the neediest families or charge a fee. They even encourage using tax services. These tax returns and supporting documentation can be completed in many ways, such as via the do-it-yourself process, through a tax service, a CPA, user-friendly tax return software, or byual AI- talking to virtdriven customer service representatives. My point is simple: individuals have choices yet are undoubtedly capable of doing or getting advice on their own.
On the surface, it seems easy, so why not? It is not just about the mechanics of completing a FAFSA but the possible devastating after-effects results. Then, ask yourself if it was worth going through this process alone or seeking professional support.
To reiterate, the FAFSA is an essential form with online links to informative information that only does some of it. It is heavily used to account for 92% of student loan borrowing sources because of its convenience, without co-signers and flexible repayment options. One requirement qualifies the student for some aid, but it isn’t enough. Either the parent takes responsibility by applying for a Parent PLUS Loan or alternative financing.
That is why it is usually best to get personalized attention to overcome information overload, which can be overwhelming. Now that you better understand the FAFSA, Let me add another acronym for those needing my help: Finding Alternatives For Smart Adults Like You. I’m here to help you do that.