Is Your Student Dependent or Independent?

A reader recently asked about being treated as dependent on or independent when it comes to financial aid. What does it matter, he asked, and how is it decided?

Federal and state programs provide 70% of our nation’s financial aid. They use taxpayer dollars to help students cover their college expenses. But there has long been a national consensus that the student’s family ought to pay as much of these costs as it can before the hard-earned tax dollars of its friends and neighbors are used to help it’s children.

So the big question becomes, “who is the student’s family?” For decades federal law has answered:

  • The student and his or her parents, if the student is financially dependentupon those parents; or
  • The student alone — or the student and spouse, if the student is married — if the student is financially independentof mom and dad.

Years ago, the law treated a student as independent if the parents were willing to increase their taxable income (and their federal income tax) by not claiming that student as a tax exemption. Congress found that many affluent parents chose to pass on claiming children in college because their families would qualify for more financial aid than they saved on their taxes. As a result, the “exemption test” gave way to an alternative set of circumstances under which Congress concluded it’s unreasonable to expect parents to support their children. With a few additional exceptions, these include being:

  • 24 or older as of January 1 of the school year to which the student’s FAFSA applies; or
  • A graduate student; or
  • Married; or
  • A parent with his or her own children; or
  • Someone with his or her own dependents; or
  • In the military; or
  • A veteran.

Any student meeting any one of these conditions is classified as an independent student. Parental finances are not reported on the student’s FAFSA and not used to determine the student’s “Expected Family Contribution (EFC)” — i.e. what the family is considered to be able to devote to the student’s college expenses by marshaling every dollar it possibly can for that purpose.

If none of the circumstances listed above describe the student, than he or she is treated as a dependent student for financial aid purposes. The FAFSA collects this student’s parental data, and those data are used to establish the student’s EFC, thereby positioning the student and parents, not other Americans, to act as the “first payer” of the student’s higher education expenses.

College Affordability Solutions provides a variety of services to the parents of current and prospective college students, including advising about how to complete the FAFSA. Call (512) 366-5354 or email collegeafford@gmail.com to learn more.

Don’t Miss Your FAFSA Priority Deadline!

The 2016-17 Free Application for Federal Financial Aid (FAFSA) became available January 1, signaling the start of the financial aid application process for enrollment periods beginning July 1 or later. But by when do you need to complete and file your 2016-17 FAFSA?

The answer: by your FAFSA priority deadline, which is the earliest FAFSA priority deadline for any of the schools you’re thinking about attending in 2016-17. And regardless of school deadlines, you also need to be mindful of your state’s FAFSA priority deadline. For example, if you’re a Texas resident interested in attending Texas schools, you should submit your FASFA before the State of Texas’ March 15 FAFSA priority deadline — even if all schools of interest to you have subsequent deadlines.

Why a priority deadline? FAFSA data are the key to proving eligibility for most of the best forms of financial aid — grants, need-based scholarships, the most inexpensive loans, and work-study jobs. But institutional funding for these programs is limited, and there’s never enough to adequately fund every eligible student. Money limits are also the norm in state grant programs, hence the state priority deadlines.

Submit your FAFSA before your priority deadline and the schools you list on it will get your data in time to assemble financial aid “packages” for you while there’s still money left for all the programs for which you’re eligible. You can still submit your FAFSA after your priority deadline, but it’s likely that your access to the best aid will be very limited because all or most those dollars will have already been awarded to other students.

So here’s what you need to do:

  1. Check the financial aid websites for the institutions to which you have or will apply for admission. Identify that school’s FAFSA priority deadline. Call its financial aid office if you can’t find this information!
  2. Use the first of your schools’ FAFSA priority deadlines, or your state’s FAFSA priority deadline, whichever is earliest, as your FAFSA priority deadline.
  3. If you haven’t already done so, go get your Federal Student Aid (FSA) ID so you can complete your FAFSA. Parents, this applies to you, too!
  4. Before your FAFSA priority deadline, complete and file your FAFSA following the instructions on fafsa.ed.gov. Be sure to list the Federal School Code for every college and university you’re thinking about attending before filing your FAFSA.

College Affordability Solutions offers various services including FAFSA completion assistance. Call (512) 366-5354 or email collegeafford@gmail.com to learn more.