WASHINGTON — “Spoiler alert: college is really expensive,” the Education Department warns in a blog post as it invites students to apply for federal student aid.
Most students need some form of financial aid to pay for college, which can cost tens of thousands of dollars a year, but the process of applying for aid became more difficult earlier this year when an online tool for retrieving tax data was taken down because of security concerns. The IRS has now fixed the glitch, and on Tuesday the Education Department launched a revamped version of the Free Application for Federal Student Aid form.
A look at FAFSA and federal student aid:
What is FAFSA?
Each year approximately 22 million people apply for federal student aid and the Education Department awards about $120 billion in grants and loans. Aid can take the form of Pell grants, work-study and direct student loans, which are generally less expensive than private loans. The department says that while income is taken into consideration, no students should assume they won’t qualify for some form of aid. “Don’t make assumptions about what you’ll get — fill out the application and find out!” it recommends.
How it works
The application asks students for their demographic, financial and other family information in order to come up with their expected family contribution, or the amount of money the student or his or her parents will be expected to pay out of pocket. The difference between college tuition and that figure will determine that student’s financial need. A handy online tool called the FAFSA forecaster may help students understand their federal aid options. Applicants also need to list the schools they are applying to, and the Education Department recommends that students name all the possible colleges and universities they are considering, even if they may end up not applying to all of them or getting in.
How much aid?
Based on the FAFSA information, schools will calculate the amount and types of federal aid the student is eligible for and send the student a financial aid offer. Students may also be eligible for loans, grants, scholarships and tuition discounts from the state and from the school itself. This school year, the maximum federal Pell grant award was $5,920, the maximum direct subsidized loan was $12,500 per year and unsubsidized loan was $20,500. The average annual work-study award was around $1,730. There is also the Parent Loan for Undergraduate Students, or the PLUS loan, and its maximum amount is the cost of attendance minus any other financial assistance the student has received.
Online data tool
As part of the FAFSA launch, the government is reinstating a useful online IRS data retrieval tool that students can use to automatically link their tax information to their application. The tool was shut down this spring due to concerns that it could be used to steal personal information and then to file fraudulent tax returns. In September 2016, a Louisiana man unsuccessfully tried to obtain Donald Trump’s tax information using the tool, according to an Education Department watchdog. The upgraded version of the tool is meant to protect against such fraudulent activity.
The 2017 FAFSA, which went live on Sunday, will cover the 2018-2019 school year. And while it may look like there is still a lot of time left, the Education Department suggests that students start planning and applying early. Some colleges may have priority deadlines, while some states have a first-come-first-served rule for financial aid.
“Ah, deadlines. The sworn enemy of students across the nation,” the agency warns in a blog post. “By submitting your FAFSA form late, you might be forfeiting big money that can help you pay for college.”