College aid amid a pandemic

As the health and economic pandemic continue to swirl, another college financing season is about to begin. While the process is always onerous, this year, many families will need to send extra documentation highlighting any changes to their financial condition as a result of the pandemic (or any other reason). It’s important to remember that many of the forms that grantors and lenders require – including the all-important Free Application for Federal Student Aid or FAFSA, are based on 2019 tax returns and financial statements, which is not going to capture the impact of COVID-19.


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For those who have seen a drop in income or assets, including those who are already enrolled, you will need to follow up all formal applications directly with each school to which the student is applying in order to submit your case to “professional judgment”. This is a process where the family highlights “unusual situations or circumstances that impact your federal student aid eligibility.” The financial aid administrator at each college has the discretion to override the normal outcome on a case-by-case basis, which may result in additional grants.


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Regardless of your situation, the process begins with the completion of the FAFSA, which determines how much students and their families will receive in college grants, scholarships and loans. It is available on October 1 for academic year 2021-2022. According to the Department of Education (DOE), which administers the FAFSA program:

• Federal student aid includes three different kinds of financial help: grants, low-interest loans, and work-study funds (a part-time job on or near campus). It is important to distinguish among the three, otherwise, you might find end up with a nasty surprise in four years.

• Your username and password combination (FSA ID) will serve as an identifier to allow access to personal information in various DOE systems. You can apply online for an FSA ID at any point, even before you are ready to complete the form. Guard the FSA ID with your life: there have been instances of hacking and phishing for this vital and important information.

• “There is no income cut-off to qualify for federal student aid. Many factors, such as the size of your family and your year in school, are taken into account” according to the U.S. Department of Education’s web site.

• FAFSA is also used for some state and some school financial assistance.

• Unlike most loans, the government will not consider a credit score as a means of qualification (except for Direct PLUS Loans). Also, you won’t need a cosigner to get a federal student loan in most cases.

• The process goes a lot faster if you assemble the following information before you begin: Social Security numbers for the student and parents (this may require contacting an ex, so be forewarned); the student’s driver’s license number, if applicable; federal tax information; records of untaxed income such as child support; and current bank-account and investment information.

• The DOE can access your tax information through the IRS Data Retrieval Tool. Using your FSA ID, the site will transfer you to the IRS, in order to retrieve the data.

In addition to FAFSA, there is another step to take. Also on October 1st, log on to the College Board’s CSS/Financial Aid Profile, which is used by nearly 400 colleges, professional schools, and scholarship programs to award non-federal aid. The CSS requires more work, because it is a more detailed accounting of the family’s finances, but it could be worth it as the CSS distributes about $9 billion in awards.

IMPORTANT NOTE: You should submit both the CSS and the FAFSA as early as possible because some money is awarded on a first come, first serve basis.

(Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at [email protected] Check her website at


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Video: Negotiating for financial aid (CNBC)

Negotiating for financial aid



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