5 FAFSA Myths Debunked

One of the most important financial documents for parents of high school aged children is about to become available this fall – the Free Application for Federal Student Aid (FAFSA). Financial industry veteran Joe DePaulo, CEO and Co-Founder of College Ave Student Loans, addresses five myths about the FAFSA and why there is an urgency for parents and their students to start it on October 1.

1. MYTH: My family’s income is too high, so I shouldn’t bother applying for aid.

FACT: Many factors, not just household income, help determine how much aid students receive and what type of aid they are eligible for. For example, the number of people in the household, child support costs, and the number of kids in college can impact a student’s award package. Minimally, most undergraduate students qualify for unsubsidized federal direct loans; access to these loans is not need-based, so your income doesn’t matter. If your student does decide to borrow, federal direct student loans are the best place to start since they have low fixed interest rates and repayment protections. A combination of savings, scholarships, and student loans often work together to make college possible for families.

2. MYTH: I haven’t filed my taxes, so I can’t fill out the FAFSA.

FACT: You can now use your tax returns from the “prior prior” year (i.e. up to two years ago) to fill out the FAFSA form. Even after you file your taxes for 2017, you won’t be required to update your FAFSA information. You do have the option to modify your FAFSA to reflect a more recent tax return though, and you’ll want to take advantage of that option if it helps you qualify for more aid. Get the FAFSA in early using the information that’s available to you at that time, but be sure to double-check whether an update to use a more recent tax return would benefit you.

3. MYTH: I fill out the FAFSA once my child has been accepted into college.

FACT: Fill out the FAFSA as soon as it becomes available – October 1 – the fall of your child’s senior year in high school. Some aid is first-come first-served, and some schools require your FAFSA to be completed before they’ll consider you for ANY aid – even merit aid - so your best bet is to get the FAFSA completed as early as possible. You can list all the schools your child is considering applying to on the FAFSA; you don’t have to know the exact plan to complete the form.

4. MYTH: Only students at the top of their class get financial aid.

FACT: Most federal financial aid programs do not consider a student’s individual grades; the student just needs to meet basic satisfactory academic progress standards.

5. MYTH: We didn’t receive enough aid for school; that school is off our list.

FACT: If you didn’t receive enough aid for school, you have options. There are several ways to cover the gap between financial aid and the cost of college, and you want to find the one that works best for you. Talk with your school’s financial aid office, look at your savings, see if there are scholarships and grants your student can apply for, and estimate what you can afford monthly out-of-pocket. If you need extra help to cover the costs of college, a private student or parent loan may be an option for you. Find one that offers good rates and a flexible repayment plan that fits your budget. Visit the College Ave Student Loans calculator to see how different loan options can save you money.

ABOUT JOE DEPAULO
Joe DePaulo, CEO and Co-Founder of College Ave Student Loans, is a financial services veteran and previously served as CFO, EVP of Banking and a member of the Board of Directors at Sallie Mae. Before Sallie Mae, he was CEO and co-founder of Credit One Financial Solutions, a company focused on debt consolidation. He previously held several executive positions as MBNA, including U.S. Card group executive and member of the corporate management committee. Joe received an AB degree from Georgetown University and an MBA degree from Amos Tuck School at Dartmouth College.

ABOUT COLLEGE AVE STUDENT LOANS
College Ave Student Loans is simplifying the student loan experience so students can get on with what matters most: preparing for a bright future. As a fintech lending company with a sole focus on private student loans, we’re using technology and our deep industry expertise to connect families who need to cover education costs with lenders who can provide that funding. By specializing in student loans, we are able to give our customers the attention they deserve and deliver loans that are simple, clear, and personalized for the individual: we help you find your perfect fit. We offer competitive rates, a wide range of repayment options, and a customer-friendly experience from application through repayment. Visit www.collegeavestudentloans.com.