Following is a transcript from Oswego Wealth Advisors’ FAFSA Webinar held on November 11, 2020. For video or audio recordings of this Q&A, please contact and a copy will be sent to your email.

Craig Childress, CFP: Welcome to Oswego Wealth Advisors. This is our first attempt at a live broadcast to talk about financial aid for your college students. 

Let me just tell you a little bit about Oswego Wealth Advisors. We have been doing financial planning for the past 20 years here in beautiful Lake Oswego, Oregon. And we are family fiduciary planners, putting our clients’ needs first and helping them to meet their retirement needsmoving from confused to having the feeling of peace of mind about their financial lives through our five-step process. 

Today we have with us, Courtney Childress. And if you think the last name is familiar, it is… this is my daughter. Now she is the newlywed, Courtney Varghese—I’ve got to get used to saying that. Welcome, Courtney! 

Courtney is the Assistant Director of Compliance for Financial Aid at Texas A&M University. She has 10 years of experience in the financial planning field. And so, Courtney, welcome. We’re glad to have you tonight.

Courtney Childress: Thanks! I’m glad to be here.

Craig Childress, CFP: Courtney, we want to talk about financial aid, and specifically, we want to talk about the FAFSA, the Free Application for Federal Student Aid. Can you begin by just telling us what the FAFSA is?

Courtney Childress: The name really explains itself quite well. It’s free – you don’t have to pay anyone to fill it out for you if you don’t want to. And it’s an application that’s required to be completed annually to be considered for any federal student aid, as well as some state and institutional or school financial aid. 

I would say a lot of people don’t fill out the FAFSA, or don’t want to fill out the FAFSA. But in my opinion as a financial aid professional, everyone should fill out the FAFSA. Especially the first year your student will be in college, at least to see what you might qualify for.

It’s also beneficial just to have it done in the case that your student receives a scholarship that requires the FAFSA to be completed. Or, in the case of a financial emergency, it’s nice to have the FAFSA already submitted for anything that might come up during the year. I definitely recommend getting that done every year.

One more thing, the FAFSA itself doesn’t provide any financial aid; it’s just an application. What it does provide is a score called the EFC or Estimated Family Contribution, and that is what determines your eligibility for the Pell Grant. It’s the score or the number that is sent to all of the schools that your student is applying to. So, the schools will receive your result, and then use that EFC to disperse the Pell Grant—if you’re eligible—or it’ll determine your financial aid eligibility by comparing it to their cost of attendance, which we’ll talk about some more later. It basically is what the schools received to help determine your financial aid.

Craig Childress, CFP: It sounds like that’s the difference between the actual cost of the semester or the school year and what the contribution of the family is expected to be. And then anything in between those two numbers is what the school may be able to provide.

Courtney Childress: Right. That’s what they’re going to look at to see what they can provide to the student.

Craig Childress, CFP: I know these come out and they need to be filed by a certain time. What are the deadlines? When should people really get serious about getting the FAFSA turned in?

Courtney Childress: The earlier the better is my recommendation for getting started. You can actually go ahead and create a username and password any time, regardless of when your student is going to start college. You can even fill out the FAFSA before your student starts college, if you really want to just get some practice. 

Both the parent and the student will need a username and password. It also will serve as your electronic signature. So, it’s good to go ahead and just get that done even if you’re not quite ready to fill it out yet. You’ll just want to make sure you keep that username and password somewhere you can find it again. You generally only use it once a year, and it’s easy to forget what it is.

The most important date to know about the FAFSA is October 1. That’s when the FAFSA  application opens up for the next school year. The 2021-2022 FAFSA just opened up this past October 1st – just six weeks ago. The FAFSA for the next school year (not the one we’re in currently) is already open and ready for students to start applying. 

Every year, you’ll want to be ready for October 1st to go ahead and start working on that.

Other dates to know depend on where you live and what school your student is planning to attend. Different states and different schools will have their own deadlines and priority dates. 

You really want to check with the schools that your student is applying to or currently attends, to determine when you need to submit the FAFSA to be most eligible for their financial aid and scholarships.

My recommendation is to complete the FAFSA by Thanksgiving every year. 

That gives you a good couple of months to work on it. And in future years, once they are in college, if you have an incoming freshman, it’s a great time because you’ll likely be together for Thanksgiving. If you need to fill it out together, the holiday is a great time to finish it up. 

If you really can’t get it done, I think getting it in by the Christmas holidays or New Years is sometimes acceptable. But I will say A&M has a scholarship application that’s due before the holiday break. It’s not dependent on the FAFSA, but there are often deadlines in the fall semester for scholarship aid for the next school year. It depends on your school. You really want to check and make sure you know what all of their deadlines and priority dates are.

Craig Childress, CFP: Gotcha, okay, thank you. That’s good. Well, we are getting ready to fill the FAFSA out… What do I need to do to get ready? What information is on there that I need to gather to fill the FAFSA out?

FAFSA Prep ChecklistCourtney Childress: The first thing you’ll need is personal information, like your social security number, date of birth, driver’s license number, those kinds of items. Those are things that you can easily gather. 

I will say one thing I’ve seen over the years is families getting their student information mixed up: one sibling’s social security number is on a FAFSA and the other sibling’s date of birth is on their FAFSA. That can definitely cause some snags in the financial aid office. Just make sure that you have all the right information for the right person. 

And that also goes for the parent and the student. In the same application, you’re going to be answering parent questions and student questions. Make sure you read the question carefully and answer for the right person: for the parent or for the student.

Something else on our checklist here is having your list of top colleges. You will want to know which schools the FAFSA needs to be sent to. It gives you an option to send it up to 10 schools. Make sure you know which ones you want to send it to.

In terms of financials, you want to have either your tax return or tax return transcripts for a student (if they’re not filing for a year but they work and have a W-2) handy too. Any assets that you have or nontaxable income, you want statements ready because the FAFSA will ask about that.

I’m going to share the FAFSA and show some instructions that are on the PDF form. They pop up on the application itself when you’re filling it out electronically, but I find this really handy and helpful to know exactly what to be looking for in terms of your assets and investments. 

FAFSA Google Search

So if you Google “FAFSA PDF 2122” or whichever year you’re looking at, it’ll pop up this PDF of the FAFSA. What you will do is scroll to the very end, and there are notes for each question on the FAFSA. There’s a section that talks about investments, money received in or on your behalf and the investments, and business and farm value.

Some of the questions on the FAFSA itself can get a little confusing. Some of the things it is not going to ask you for but often gets included are: the value of the home you live in; the value of the land you live on; your retirement accounts. Those are investments and assets that they don’t want to know about, so definitely don’t include those.

But there are some things that they do want to know and you must include. This is just a really concise place to find that list of information there.

One thing I know that we’ve talked about before is a 529 plan. They do ask you for the value of that to be included in your assets. The best place to hold that is with the custodial parent. The place that it’s going to affect your FAFSA the least as an asset of the parent that the student lives with. Otherwise, the student ends up having to put it into their assets or into their untaxed income on their behalf. Anything in the student’s name gets counted for a lot more heavily than a parent. So, that’s where you would want to put that if you have one. Most of the time, I think it is in a parent’s name, but if it’s not you can work on that.

Craig Childress, CFP: Something I might add here, if you’re working with us, we will be glad to help you with a complete list of assets that you need to put on your FAFSA form. Just to contact us and call the office… We can put that together for you and send it out so you have it right there next to the FAFSA form when you’re filling it out. That is just an added service, we’re glad to help you with. 

Courtney Childress: That’s really helpful. Sometimes it can get pretty confusing.

Craig Childress, CFP: We can walk you through. I will also make Courtney’s contact information available so you can reach out to her with questions.

Now, I’ve got the FAFSA filled out. What’s the best way to submit it?

Courtney Childress: Electronically. It is basically the only option, and the best option. If you do it by paper, it takes weeks and weeks and it may get lost—it’s just a bad idea. 

Some schools may require additional information, and how you submit that can vary from school to school. You’ll have to check with the school that your student ends up attending for how they want you to submit any additional documentation. Sometimes along with the FAFSA, you end up going through an audit process and they may require a copy of your tax return or something like that. A lot of times they have an electronic portal that you’ll submit it through so that it’s secure. But every school is a little bit different in that regard. 

So definitely, yes, talk with your school about anything else you might need and how they want you to submit that to them.

Craig Childress, CFP: So, really get to know your financial aid office and work with them. They’ll help you with that, I’m sure.

Courtney Childress: For the FAFSA, you are submitting electronically. And you are using your username and password as your signature. It requires both a parent signature and the student signature to hit that final submit button.

Craig Childress, CFP: You said earlier that both the student and the parents should get a login for FAFSA. Is that that I’m hearing?

Courtney Childress: Yes. Both of them need one. The student has their own login and then the parent has their login. It just has to be one parent—it doesn’t necessarily have to be more than one—but the parent can have the same login for multiple students.

Craig Childress, CFP: So, you should have one. 

Do you have any tips or tricks for us that would make this easier or make sure this gets done in a way that really works?

Courtney Childress: Well, I have a tip that goes a little bit different direction. And that is a privacy, Family Educational Rights and Privacy Act (FERPA), tip.

Once your student is admitted to school and is an incoming student, they become responsible for their own information. Privacy laws only allow schools to contact and converse with the student about their financial aid. But most schools know that a parent is typically helping the student or filing this documentation on behalf of the student. So, they make either a release form or an entrance to the student portal available to parents. 

You just have to, again, find out from the school what direction they go for that. Do they just have a release form the student has to fill out? Or do they have a parent entrance to the portal where you can get information that way?

I recommend finding out how they do that, and then having the student complete whatever is necessary to release that information to the parents. Also set up the time when the student will regularly be checking their portal or their email for notifications from the financial aid office—if that’s once a week or once a month—and then just making sure to send that on to the parent. 

If there is anything required or necessary from the financial aid office, the financial aid office is going to communicate to the student, not the parent. So, it’s good to be in good communication about what’s coming in so that you know what is necessary.

Craig Childress, CFP: So it sounds like the school will help because—here I am writing all the checks and I don’t have any information!

Courtney Childress: I know!  

Craig Childress, CFP: So, they will let us sign a release form or let the student sign a release to get information if we ask for it?

Courtney Childress: Typically, yes. They’ll either have a release form or let the student release that opening to the portal for the parents. 

Craig Childress, CFP: OK.  I filled out this FAFSA. How long does it take to get information back?

Courtney Childress: That depends. 

You’ll receive your response from the FAFSA application itself right away. You’ll receive your EFC immediately, you’ll be able to see that and then you’ll get a student report by email. Usually within a day or two of filing the FAFSA, if not right away, you’ll know what your Estimated Family Contribution is, what that score is, and if you’re eligible for a Pell Grant.

But the schools usually receive FAFSA results a little bit later. Schools typically can’t even gather the results until starting in November, and then they will wait to send out any notification of financial aid to a prospective student until the student is admitted. 

Typically schools are doing their big push for their first round of admission around this time of year—in late November, early December. That is probably going to be the earliest that you’ll get a notification of your financial aid.

A lot of times it doesn’t come through until January or February. That’s probably a little more normal to receive your financial aid notification. You’ll definitely receive something by March. National decision day is May 1st, when you make your first deposit. They definitely want to give you at least four to six weeks to make that final decision. 

A lot of schools are really trying to get that out earlier, so you can go ahead and commit earlier. They want to know who’s coming to their school next year. It could be anywhere from November to March. 

Craig Childress, CFP: Oh, wow, okay. 

Courtney Childress:  Yeah, that just kind of depends.

Craig Childress, CFP: It sounds like results from FAFSA are sent automatically, but that you’re just waiting to hear back from the school.

Courtney Childress: That depends on admission status and when the school is able to retrieve those from the Department of Education. There are several factors that go into getting financial aid notifications out to the student.

Craig Childress, CFP: Well, what can first-time applicants expect? And what about renewals?

Courtney Childress: First-time applicants can expect to receive a notification from a school—an award letter—either by mail or electronically. Some schools do both and some are moving to go purely electronic.

Sample Award Notification

This is an older sample of an award notification. What you see there are the scholarships and grants and loans that the student is eligible for at that school, and the Pell Grant and the Direct Loans. Those are gonna be the same at every school no matter where you go, but the other grants and scholarships may be different.

Down at the bottom, you can see that it shows the expected costs. That’s what we talked about earlier, that Cost of Attendance (or budget amount). What schools do is put together the cost of tuition and fees, and an average Room & Board. Then, they will put together some other typical costs (for example: transportation and miscellaneous costs, books and supplies) to come up with that overall budget or Cost of Attendance.

They’ll subtract from your FAFSA result, your EFC, and then they’ll come up with the amount to fill in the difference. It can vary a lot from school to school. It’s based on your school’s Cost of Attendance. For this school, the estimate is $53,000.00. If your EFC from the FAFSA is $10,000.00, that leaves $43,000.00 of what we call “need” for determining if we can meet that difference. 

A lot of schools are not full need schools, so they’ll give you some amount less than that. There are some schools out there that will meet all of that, and that’s pretty special. Most schools will just try and give you some financial aid to help minimize the gap, the difference in what you can afford. 

That’s an example, again, of what you would receive as an incoming student. That may be electronic or it could be in the mail.

For renewals or returning students: they will need to fill out the FAFSA every year as well as renewal applications for different scholarships that they have. Typically, they’re going to receive their financial aid notification in the Spring. So, you’re filling out the FAFSA in October, but you may not have your financial aid for next year until you’ve registered for classes, which is going to be probably in April. Or, you may not have it until grades are reviewed in May. And that just depends on how the school processes your financial aid.

Your second year can be a bit of a jolt when it comes so much later. They have to abide by Satisfactory Academic Progress regulations. That’s getting into another subject. But they have to review your grades before they can determine if you’re eligible for your financial aid next year.

Craig Childress, CFP: Makes sense. You mentioned a minute ago that you have to fill out the FAFSA every single year, this is not just a one-time thing?

Courtney Childress: Every year. Yes. So, every October 1st, be ready to fill out the FAFSA!

Craig Childress, CFP: Alright! How will I get the financial aid? Do they mail me a check? Do they send it to the school? How does that work? 

Courtney Childress: Financial aid is routed directly to the student’s bill in conjunction with the school’s business office. It will pay directly to the account. And then if there is a remaining balance to be paid, the business office will have an option for a payment plan. (Or you have loan options, or if you have other scholarships from outside sources for that.) But you really will just have to follow the instructions from the financial aid office to be eligible for your aid and then it’ll just go directly to your bill.

Craig Childress, CFP: Okay, nice. We have all these different things. I heard you talking about scholarships and grants and loans. Can you tell us the difference between those?

Courtney Childress: Typically, grants are aid that are determined automatically from your FAFSA result. They do not have to be repaid. 

Scholarships are an aid usually determined by applying, filling out an application — whether that’s through the school or through an outside source. And those do not need to be repaid.

Loans are a form of aid that must be repaid. You’re borrowing that funding and will have to repay that later.

And then work study is aid that has to be earned as the student works. You don’t receive anything upfront—you’re just receiving a paycheck as you work, like a normal job, but it’s coming from the school or from federal funding.

Craig Childress, CFP: What happens if the student’s eligible for financial aid, but Coronavirus or some other unforeseen issue makes it impossible to attend college in that year? Does the submission roll over to the following year, or do I lose it? Or what happens? 

Courtney Childress: Well, it depends. The FAFSA does not roll over. It has to be completed again every year. So, if you end up not using any financial aid the year that you fill it out—if you filled it out now, but do not end up going to school in the 2021-22 school year, then you would need to fill out the 2022-23 FAFSA next October to be eligible for your first year of college. Even if you don’t use the FAFSA, it won’t roll over. You just have to re-fill it out every year. 

It can vary from school to school though what institutional aid they will honor. Sometimes a school may allow a student to defer their admission and will honor certain financial aid that the student is eligible for. 

If the student takes a gap year before coming to school, then that really varies per school and per year. Some schools vary from year to year on if they allow that or not. That’s something you would definitely want to talk to the school’s financial aid office about.

Talking about unforeseen issues or extenuating financial circumstances, a student can contact their school regarding financial circumstances that are different from what you’ve put on the FAFSA. 

Something that I haven’t mentioned yet is the FAFSA is looking at the prior, prior year’s taxes. 

Right now, the 2021-22 FAFSA is going to look at 2019 tax information. We’re in 2020, but we’re going to look at last year’s tax information. So, if your financial situation has changed since 2019, you would want to contact the school and they can look at your information. 

Some schools will make a professional judgement to change what you would put on the FAFSA to better reflect what the situation is currently. 

The only way to do that is through the school. You can’t put different information on the FAFSA. You have to answer on the FAFSA what it asks. But then schools do have that option to take into account different information. 

That is something that you would have to do school by school. If your student is applying to three different schools, and you have some significant differences in your income, and you want to get an idea of what would be offered. In that situation, you would have to fill out documentation and kind of go through whatever that school’s process is with each school. And then you would have to meet again next year after you fill out the FAFSA again to go through that professional judgment process over again.

Craig Childress, CFP: It sounds like it’s really important to get to know the people that are helping you with financial aid. Should you send them cookies and flowers?

Courtney Childress: Maybe not right now, but in normal times…::Laughter::

Craig Childress, CFP: Different times, yes. 

Courtney Childress: Being friendly to your financial aid office on the phone or by email, goes a long way. If you’re making phone calls, call early in the morning when they’re fresh and available to answer your phone calls. It’s very important to get to know your financial aid office. And they’re definitely going to be willing to help you and help you figure out what you can do.

Craig Childress, CFP: Great. Well, we finished with school and have some loans. What’s the expectation to pay those back?

Courtney Childress: There are different expectations for different loans.

If you go with just the federal Direct Loans that students are eligible for by filing the FAFSA – they used to be called Stafford loans, now they’re just called your Direct Loan – those are expected to begin payment sequence after graduation. They won’t call you until it’s time to start paying, so if you want to get a head start on paying down interest (you get a gift from grandma and you want to pay it off—anything like that) you have to call them ahead of time. They will reach out to you once it’s time to start payment. You don’t have to worry about that. They’ll find you, and they’ll have a plan for you to make those payments. You’ll have a few options for how you want to do that repayment plan. It will be in six months after graduation.

Then there is another loan option called the Parent PLUS. That is a loan that parents take out in their name, that then goes towards the student’s account. When their parent is applying for that loan, it gives them the option to either start payment immediately, to wait until the student graduates, or to wait until six months after the student graduates. So whatever is best for you is what you would choose there. Same thing with those student loans, there’s no penalty for going in and making payments early or even paying it off early. That’s something you can do without federal loans.

Then there are alternative loan options either through a bank or credit union. Some states have loan options for students as well. Repayment really depends on the lender. Some start immediately upon disbursement, some wait until six months after graduation. When you’re applying for a loan that is through a bank or credit union or a state or any other option, you would want to check what their repayment policy is and what their terms are, not only their interest rates, but also dates.

Craig Childress, CFP: Courtney, this has been very informative. Thank you so much for taking time out of your evening to join us! I know you’re newlywed, so thank you again for being away from your new husband. We’ll have to give him special thanks for letting you work overtime tonight!

And thank you to our viewers and listeners! We are always available here at Oswego Wealth Advisors to help you with any of these concerns and help you with the FAFSA process as you apply for financial aid for your students—your children or your grandchildren. Please feel free to contact us and we will do all we can to help you out. 

Courtney, thanks again for spending time with us tonight, we really appreciate you taking time out of your day to do this.

Courtney Childress: It was fun. Thanks for the opportunity! This is great, and I always love to share financial aid information.

Craig Childress, CFP: Well again, from all of this here at Oswego Wealth Advisors, thank you so much and we wish you a very good evening. Take care!

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