“An investment in education always pays the highest returns” – Benjamin Franklin

Do you know this about student loans?

This article is not discussing the current hot topic of student loan forgiveness.  The headlines have created strong opinions but many people are not aware of all the recent changes to the Free Application for Federal Student Aid (FAFSA) process.  Here is a quick breakdown in the event you are looking for assistance this fall.

Simplification

The application has been simplified, taking the overall form from 108 questions down to 40.  Given all the changes, the availability date has been postponed until December 2023. However, as of this article, an exact final date has not been set.

Pell Grant

For students who have an exceptional financial need, the Pell Grant Program should be at the top of your list. The Federal Student Aid is changing eligibility and how award amounts are going to be calculated.  Part-time students will also see a reduction in award amounts.

Multiple Children

If you have more than one child, the biggest change is in this part of the calculation.  The new process eliminates any discounts for families with multiple children in college at the same time.  This further reduces any financial eligibility for each child.

Custodial Parent

In the past, either parent could complete the application if the parents were living together. However, for divorced parents or parents who are separated, this change now requires the “custodial parent” to complete the application.

Additional Information

Need more information about student loans, parent loans, private loans, loan forgiveness, or repayment information? We recommend you check out www.savingforcollege.com.  This is a great resource.  It can help you estimate the cost of college with calculators that let you select specific colleges. Or, you can also look at in/out of state average college expense estimates.   There is also the main Federal Student Aid website https://studentaid.gov/h/apply-for-aid/fafsa. 

Next Steps

Most parents will need to wait until their student makes their final selection before looking at their student loan eligibility.  Keep in mind that the student loan application helps determine the student’s financial need.  The process will look at the difference in the Cost of Attendance (COA) at the selected school less the Expected Family Contribution (EFC).  The EFC formula is the index number used to determine eligibility, a worksheet to calculate by hand the EFC can be downloaded from the FAFSA website.  However, it is already calculated in the free application.

If you are looking for counsel, Box Financial Advisors’ purpose is to help our clients make biblically wise financial decisions.  We do this through our financial planning and tangible asset investment strategies.  Request a complimentary initial meeting or check out our other resources that may help you at www.boxfinancial.com.