February 2024 Newsletter

This Month's Highlights:

• Whose Fault Is It Anyway?
• 3 FAFSA Changes Designed To Hurt You
• Financial Aid Insider: Get Ready To Ask For More Money

Dear Parent(s),

They say Punxsutawney Phil's predictions are 100% accurate. Let's be clear, they're not. The predictions are actually wrong 60% of the time. But the Punxsutawney Groundhog Club notes that the predictions aren't geographically specific. Punxsutawney Phil didn't see his shadow in a ceremony Friday morning at Gobbler's Knob in Pennsylvania. Per tradition, that means he's predicting an early Spring that is probably true somewhere in the world.

But, we think Punxsutawney Phil had some help with this year's El Ni?o predicting a warmer than normal year.

Whose Fault Is It Anyway?

For those of you who noticed there was no January issue of this newsletter, given the current disaster of the new FAFSA which has kept me extremely busy, I'm sure we will be forgiven.

The latest shocker came on January 30th, when it was announced that the colleges wouldn't be able to receive students FAFSA information until mid-March.

As you can imagine, further delays only mean one thing: students and parents will have very little time to evaluate their forthcoming aid packages.

We don't find it useful to cast blame on whose fault this is. That will be for others to decide. The important thing is what can we as consumers of higher education do about it?

Unfortunately, as it turns out, very little. Parents can file the FAFSA knowing they won't miss any deadlines.

To compensate, some colleges have prepared their own institutional financial aid forms so they can offer preliminary awards. To find out which colleges are using their own forms, stay vigilant on your student's emails. You can also visit the individual college's financial aid webpages and portals. There may be online forms waiting for you to complete.

According to the National College Attainment Network, a nonprofit whose mission is to close equity gaps in postsecondary success for students from all backgrounds, only 20% of the high school class of 2024 has submitted a FAFSA. This is a 49% decrease in national submissions from last year.? While it’s not clear if the lower numbers are a result of the FAFSA delay or other things, this is NOT what colleges want to see.

If you completed the CSS Profile form, your student may receive a preliminary institutional aid package soon. Institutional aid is money the colleges award on financial need, but except for student loans does not include federal aid.

May 1st is National College Decision Day [but be clear that some schools enforce different decision deadlines]. This year, we believe colleges will have to push that deadline to June 1st or perhaps even July 1st [and some already have]. This will be devastating to all concerned. We wouldn't be surprised if the colleges file a class action suit against the Department of Education for the financial losses they are sure to incur.

For the most part, current/returning students shouldn't be as affected, as upperclassman are packaged after the freshman class.

3 FAFSA Changes Designed To Hurt You

There are three main changes to the new FAFSA that parents may want to challenge the college on.

The elimination of the sibling discount (multiple students in college at the same time) could be a major problem. Let's say you had one student in college, and your Expected Family Contribution (EFC) is $60,000. But now you have three in college at the same time. The rules were that your EFC would be $20,000 for each one. With the new FAFSA, you could be expected to pay up to $180,000 for all three-- for ONE YEAR!

Another change is for parents who own businesses and farms. The value of both used to be excluded, but the new FAFSA counts their values, and the result can crush your college financial planning. Unlike liquid assets, the value of businesses and farms can't easily be leveraged for cash.

In the case of parents who are separated or divorced, the third problem is the FAFSA rule that says the parent who provides the most support is the one who should file the FAFSA-- even if they are not the custodial parent. That parent may in fact earn quite a bit more than the custodial parent. But, that doesn't necessarily mean that parent provides 51% or more financial support to the student. There are many instances where the high earning noncustodial parent pays child support, but this is not enough to cover all the expenses the custodial parent incurs, providing a home, etc.

This is the time to write appeal letters to the colleges your student have been offered admission.

Do you own a small business? Have 2+ kids in college in 2025? Are divorced or remarried? Contact me ASAP for strategies on how to lower the cost of college!

The new FAFSA may actually make it more difficult to appeal financial aid packages. However, the law says that colleges must review any request for reconsideration of additional funds. We imagine the financial aid offices will be overwhelmed. This means that how you appeal is more important than ever. What to say? How much to say? What to document? How to follow up?

Next month, we will provide some insight and examples of how to do that.

Michael Korch

College Funding Counselor, Inc. | CollegeFundingCounselor.com | +1 (206) 590-0398

P.S. If you find this newsletter helpful, please share it with other parents like yourself!

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