The fall semester is just around the corner, and parents and students alike are gearing up for the big move back to campus. Going to college is an expensive venture. From tuition and textbooks to stocking up a dorm room with all the essentials your child will need, most college students could use all the financial assistance that the government could possibly offer. Whether you are sending your child to college for the first time, or you are a seasoned veteran, you are bound to face some changes when it comes to financial aid in the year ahead. Beginning in the 2013-2014 calendar year, there were a considerable number of changes to the FAFSA Federal Student Aid program. Here is a look at some of the major changes to FAFSA in 2013 and how they will affect students' financial aid.
Pell Grants Increased Amount
Pell grants are a federally funded grant that are rewarded to students who are at-need, and meet financial requirements. Pell grants are intended to help lower the out-of-pocket costs of college tuition for financially struggling families in the United States. In the 2013-2014 school year, the maximum Pell Grant amount is $5,645, which is a $95 increase over last year's reward amount. Please note that you may not receive the total reward amount; this is simply the maximum allowed for the 2013-2014 calendar year.
Repeating Courses Is Now an Issue
Thanks to new federal rules and regulations for financial aid, students are only eligible for federal aid for the first retake of a course the student has passed previously. This can be an issue for students who were not able to transfer credits between colleges, or for those who simply want to repeat the class to gain a better understanding of it.
Qualification For Automatic Zero EFC Changed
The qualifications for Automatic Zero EFC, or Expected Family Contribution, has been changed for the 2013-2014 calendar year. A student can receive an automatic Zero Expected Family Contribution when his or her family's income is $24,000 or less annually. Note that this is a $1,000 increase from last year.
IRS Data Retrieval
The FAFSA filing process has changed, and it is recommended that all students use the IRS Data Retrieval tool to obtain their or their parents' federal tax return. Using this tool will eradicate common errors on FAFSA forms, and keep your application for student financial aid running smoothly. Tax information is available through the tool approximately 2-3 weeks after tax return submission, and by now all data should be in and finalized. Also keep in mind that Federal 1040 tax returns are no longer an acceptable form of verification for the FAFSA.
Fees for Federal Direct Loans Increased
On March 1, 2013, all Federal Direct loan borrowers saw an increase in their loan fees. During the 2013-2014 calendar year, the loan fee for direct educational loans from both subsidized and unsubsidized organizations increased from 1% to 1.05%. If you are a borrower of a Direct PLUS loan, you should be aware that the loan fee was increased from 4% to 4.204%. This is a nominal increase, but you should be aware that if you have a federal direct loan, you can expect your loan bill to increase in the coming months.
The verification process for student financial aid for the 2013-2014 calendar year has undergone some significant changes, and if you have gone through the process before, you may want to read on to learn more about these changes. The Department of Education now separates applicants into multiple verification groups depending on what you report on your FAFSA. Each group has a set checklist of items that need to be verified and completed in order for your application to be approved. During the verification process, it is vital that you send the required information and documentation to FAFSA and your college or university’s Financial Aid officer.
The Bottom Line
Similar to other years, 2013-2014 has seen some changes in how to file and receive financial aid. Keep in mind that loan rates, grant rewards and financial requirements have changed, so it is important that you know what the exact requirements are prior to filing your FAFSA forms. Also remember that there are updates to the FAFSA website as well, and there are plenty of helpful resources on the FAFSA website such as the FAFSA/IRS Outreach, FAFSA Webinar and more. Prior to filing for financial aid, be sure that you fully understand all the changes and how they can affect your filing status.