FAFSA and Income

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
vto35
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FAFSA and Income

Postby vto35 » Wed Jan 04, 2012 4:14 am

I just filled out the FAFSA and they based my EFC on my current income. Is there a way to get them to base it on projected income after I quit my job to go to law school and my income = $0?

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paratactical
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Re: FAFSA and Income

Postby paratactical » Wed Jan 04, 2012 4:22 am

vto35 wrote:I just filled out the FAFSA and they based my EFC on my current income. Is there a way to get them to base it on projected income after I quit my job to go to law school and my income = $0?

If there was a way to legitimately do that, wouldn't everyone going fulltime do so, thus negating the usefulness of the ECF?

vto35
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Re: FAFSA and Income

Postby vto35 » Wed Jan 04, 2012 4:30 am

paratactical wrote:
vto35 wrote:I just filled out the FAFSA and they based my EFC on my current income. Is there a way to get them to base it on projected income after I quit my job to go to law school and my income = $0?

If there was a way to legitimately do that, wouldn't everyone going fulltime do so, thus negating the usefulness of the ECF?



No, because if it wasn't true it would be fraud. For example, when I was getting my masters, I was still working full-time thus making my EFC legitimate.

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paratactical
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Re: FAFSA and Income

Postby paratactical » Wed Jan 04, 2012 4:32 am

vto35 wrote:
paratactical wrote:
vto35 wrote:I just filled out the FAFSA and they based my EFC on my current income. Is there a way to get them to base it on projected income after I quit my job to go to law school and my income = $0?

If there was a way to legitimately do that, wouldn't everyone going fulltime do so, thus negating the usefulness of the ECF?



No, because if it wasn't true it would be fraud. For example, when I was getting my masters, I was still working full-time thus making my EFC legitimate.

Do you realize you're not allowed to work fulltime while going to law school fulltime?

vto35
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Re: FAFSA and Income

Postby vto35 » Wed Jan 04, 2012 4:40 am

paratactical wrote:
vto35 wrote:
paratactical wrote:
vto35 wrote:I just filled out the FAFSA and they based my EFC on my current income. Is there a way to get them to base it on projected income after I quit my job to go to law school and my income = $0?

If there was a way to legitimately do that, wouldn't everyone going fulltime do so, thus negating the usefulness of the ECF?



No, because if it wasn't true it would be fraud. For example, when I was getting my masters, I was still working full-time thus making my EFC legitimate.

Do you realize you're not allowed to work fulltime while going to law school fulltime?


YES. THUS the basis of MY ORIGINAL QUESTION.

IF I'm not working because I have to quit my job to go to law school then the EFC that is based on my full time income is TOO HIGH and disqualifies me for more financial aid that I would get if it was based on the non existent income I would have next year.

bmili
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Re: FAFSA and Income

Postby bmili » Wed Jan 04, 2012 9:56 am

your fafsa is based on the previous year so you quitting your job this year is irrelevant to what it is considering (I am in same situation). When you file your FAFSA next year, your loss of income will be taken into consideration. Also, from my understanding, EFC is for only need based aid and to determine whether or not you qualify for subsidized loans. You should be able to get loans for full cost of attendance ($20k stafford unsub, Grad Plus loans for remainder).

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paratactical
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Re: FAFSA and Income

Postby paratactical » Wed Jan 04, 2012 11:08 am

vto35 wrote:
paratactical wrote:Do you realize you're not allowed to work fulltime while going to law school fulltime?


YES. THUS the basis of MY ORIGINAL QUESTION.

IF I'm not working because I have to quit my job to go to law school then the EFC that is based on my full time income is TOO HIGH and disqualifies me for more financial aid that I would get if it was based on the non existent income I would have next year.


paratactical wrote:If there was a way to legitimately do that, wouldn't everyone going fulltime do so, thus negating the usefulness of the ECF?

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albusdumbledore
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Re: FAFSA and Income

Postby albusdumbledore » Wed Jan 04, 2012 11:18 am

If you've got good credit, I actually don't really see the point of doing FAFSA anymore. Subsidized grad loans don't exist anymore, and the rates on regular stafford (6.8%) and grad plus loans (7.9%) pretty much suck. And they have origination fees. Get a private loan, unless you've got bad credit or something.

bmili
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Re: FAFSA and Income

Postby bmili » Wed Jan 04, 2012 11:59 am

albusdumbledore wrote:If you've got good credit, I actually don't really see the point of doing FAFSA anymore. Subsidized grad loans don't exist anymore, and the rates on regular stafford (6.8%) and grad plus loans (7.9%) pretty much suck. And they have origination fees. Get a private loan, unless you've got bad credit or something.


There are plenty of things to consider for either type of loan. Things such as the need for a cosigner and fixed vs variable interest rates should all be factored. There is no one size fits all.

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albusdumbledore
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Re: FAFSA and Income

Postby albusdumbledore » Wed Jan 04, 2012 12:18 pm

bmili wrote:
albusdumbledore wrote:If you've got good credit, I actually don't really see the point of doing FAFSA anymore. Subsidized grad loans don't exist anymore, and the rates on regular stafford (6.8%) and grad plus loans (7.9%) pretty much suck. And they have origination fees. Get a private loan, unless you've got bad credit or something.


There are plenty of things to consider for either type of loan. Things such as the need for a cosigner and fixed vs variable interest rates should all be factored. There is no one size fits all.

With decent (even mediocre) credit, you'll almost certainly beat the rate on the government loans. 7-8% is high and there's a reason everyone can get them. Private lenders will compete for your dollars. The OP has worked a job and if I had to wager a guess, probably has good enough credit to pull a better rate. Granted, I wouldn't get a private loan if you want to use LRAP (depending on the school) and certainly there are other considerations, but an 8% fixed interest rate blows. Hence my suggestion.

bmili
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Re: FAFSA and Income

Postby bmili » Wed Jan 04, 2012 12:40 pm

Things that will blow are: 1) A monthly/quarterly reset on variable interest rates (LIBOR or PRIME + Spread) when interest rates inevitably go up from incredibly historic lows. 2) In order for you to get that sweet rate, to really make it cheaper than a Stafford loan at 6.8%, your going to need a cosigner, leaving your debt to your parent, spouse, etc when you pass on.

As I said, you just can't simply compare interest rates. It depends on everyone's unique situation.

Edit: Im done posting on this topic because there is nothing more of value to add

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NCGuy
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Re: FAFSA and Income

Postby NCGuy » Thu Jan 05, 2012 2:25 pm

albusdumbledore wrote:
bmili wrote:
albusdumbledore wrote:If you've got good credit, I actually don't really see the point of doing FAFSA anymore. Subsidized grad loans don't exist anymore, and the rates on regular stafford (6.8%) and grad plus loans (7.9%) pretty much suck. And they have origination fees. Get a private loan, unless you've got bad credit or something.


There are plenty of things to consider for either type of loan. Things such as the need for a cosigner and fixed vs variable interest rates should all be factored. There is no one size fits all.

With decent (even mediocre) credit, you'll almost certainly beat the rate on the government loans. 7-8% is high and there's a reason everyone can get them. Private lenders will compete for your dollars. The OP has worked a job and if I had to wager a guess, probably has good enough credit to pull a better rate. Granted, I wouldn't get a private loan if you want to use LRAP (depending on the school) and certainly there are other considerations, but an 8% fixed interest rate blows. Hence my suggestion.


The federal government has far more safety nets in place for lenders than a for profit bank. I don't even know if any bank does IBR or allows forbearance for as many things as the government.

It's more expensive but far safer to just borrow from the government.

ExcelBaller
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Re: FAFSA and Income

Postby ExcelBaller » Sat Jan 21, 2012 10:21 pm

Op I asked this question to a fasfa rep and she said to inform and discuss this with your schools financial aid office since they prepare the award package

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rinkrat19
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Re: FAFSA and Income

Postby rinkrat19 » Sat Jan 21, 2012 10:27 pm

This is what Northwestern's fin aid person told me last year (verbatim, from her email).

Let me explain how the FAFSA works in relation to how we use the information. When you complete your FAFSA, you entered information about your income, assets, etc. Congress has designated a formula to determine your Expected Family Contribution, or EFC. Please keep in mind that you are considered your family, not your parents or other relatives. The EFC is what the Congressionally-determined formula believes you should contribute to your education for just this upcoming year, based on last year's taxes and your current savings/assets.

We know that the EFC is not a realistic number for most people since very few people have thousands of dollars lying around. However, the EFC does act as a starting point for us to determine your loan eligibility. Some of the federal loans are need-based and we use the EFC to determine your need level. Here's how we determine need for loans. We take the total cost of attendance (tuition, books, housing, health insurance, etc.) and subtract your EFC. If the number remaining is positive, then you have that amount of need. Then, our Financial Aid Office can award you need-based loans up to their annual limit. Historically, our Financial Aid Office has replaced the EFC with a non-need based loan so you can borrow the EFC amount if you don't have those funds.

Finally and most importantly, I want to address your concern that we will be getting financial information that won't accurately reflect your income as a student. Each year, you will complete a FAFSA for every year in law school and your EFC will drop for next year (since you will begin school in September) and it will generally drop further during your 2nd and 3rd year since your earnings will occur only in the summer months. Please keep in mind that every student that wants to borrow loans will need to do this and everyone will be in the same boat as you, having worked for 2010 and a large chunk of 2011 with a massive drop-off in earning. When we look at the information from both the FAFSA and the Need Access application, we look at the previous year to get a better sense of need-based issues. Even though we use the Need Access application for both scholarship and loan purposes, we use it quite similarly as we do the FAFSA.

I know this is probably a longer answer than you expected, but hopefully, this will give you some peace of mind over the financial aid application and some clarity about how we use that data.




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