Introduction to the FAFSA

Sal: So I'm here with Sean Logan, who's the Director of College Counseling at Phillips Andover Academy, and Jim Ventre, Ven-tree, am I pronouncing it right, Jim? Jim: Ven-tree, yes. Sal: Ven-tree, who's the Director of Admissions and Financial Aid at Phillips Andover, and what we're hoping to talk, or start talking about in this video, is really just the financial aid process, and in particular, the FAFSA, so, I guess, wait a minute, I should probably do that in all caps, my first question for either of you is, I guess, "what is the FAFSA, "and what does it actually stand for?" Sean: Right, so the FAFSA is the free application for federal student aid, and it's really important for students to realize that free part of this name, because there is an opportunity to get on the web and go to FAFSA.com and somebody will happily help you with it, but you need to pay for it. So the first thing we talk with students a lot about is the FAFSA is a free form. You should not be paying for it. And the title again, it's by the federal government, they use a rubric to sort of figure out, based on this form, how much your family should contribute to a college education. Sal: And it's Free Application for Federal Student Aid? Sean: Student, yes, student aid. Sal: And just to hit the point home of what you just said, it should absolutely be free, and there are places where people will charge you to kind of optimize it, or fill it out for you, or... Sean: That's correct, so the first thing, normally when you start to type in on a search engine, FAFSA, a lot of times FAFSA.com pops up. It's a legitimate site, but they charge you something like 80, 85 dollars to help you fill out the form. So you want to go to FAFSA.ed.gov to start this process. Sal: .ed.gov, and there it will be free, and what is, when you fill out this form, in a future video we'll actually take a look at the form itself, but what do you input into it, and what comes out of it, and then who uses that information? Jim: I think for many students who are applying to college right now, they are accustomed to telling their story, in essays and in various pieces of their application, and they have to think of the FAFSA as just their family's financial story, and their financial story has many variables, but most importantly, the things that the FAFSA asks for are simplified as things that would be questions that students could probably answer right off the top of their head, in terms of their family income, and whether they own a home, or whether they rent where they live, it's things like that. Sal: And, I mean, I remember filling this, we were talking about this before, I guess clicking record, all of us were significant recipients of financial aid, of need-based financial aid, and I remember filling it out, I remember I kind of had my mom's tax form, which I had to fill out for her, right before filling out the FAFSA, Sean: Exactly (laughing) Sal: But that's essentially, I remember, at least this was in the early nineties, kind of the inputs that I needed to be able to fill out most of the form. Sean: And that's correct, yeah, I mean, one of the things that specifically looking at, in working with a lot of low-income families, one of the things to realize, is that it generally is actually a pretty simple form, because there aren't a lot of things that make it complicated. There aren't trust funds, there aren't investments, there aren't probably, in a lot of times, sometimes there are homes that are owned, but a lot of times they're just renting. Usually it's a paycheck that comes in, and it's sort of a standard paycheck that comes in for the year, so it's actually a pretty simple form, it's just getting students to step up and do it, is the real challenge. Sal: And the reason obviously, it's pretty obvious why they care about income, that's kind of the total amount of money your family's making, but then the reason why they care about things like home ownership, and if I remember properly, they ask things about the number of siblings you have, and they try to understand your family's expenses too, and the whole reason is to kind of figure out their ability to pay for college? Jim: That's right, so at the outset, students are asked questions to fill out on their family's financial circumstances, basically what the colleges are trying to do, is come to a conclusion, which allows them to have a picture of what the family is up against every month, every week, and what's left in the bank, so to speak, at the end of all the family operating expenses. Sal: And so what, after you fill out the form, where does that go, this is at the Department of Education site, but do they process it, or do they just give the form to the universities, what happens after that? Sean: That's a great point Sal, I think one of the misperceptions about the FAFSA is, I'm gonna submit this form to the government, basically, and then they're gonna crunch all these numbers, and then they're gonna determine a financial aid package for my family. I think that's a really common misperception. All the FAFSA does, is it looks again at your family's income, number of kids in the family, other assets, those sorts of things, and it determines an Estimated Family Contribution. What a college does with that varies greatly. And I think that's something that families need to understand. So all it is going to do is determine a number. That number might mean your family should be able to contribute 1000 dollars towards your son or daughter's education, 5000 dollars, or zero dollars for that matter, but that's all it does. Sal: I see, and the reason why this exists is so that colleges would have a somewhat uniform way of looking at this, and they can feel good that the data is real? Jim: That's right, and so one of the things in this Estimated Family Contribution is sort of this sense that the family is self-reporting where they stand in their family circumstances financially. And one of the things we want to caution about is that when you receive a sort of Estimated Family Contribution, or what they call the EFC, you want to make sure that's in line with your expectations, because sometimes that number can seem odd to the family when they understand where it came from, and they may have made a mistake in some way on the form. Sal: I see, but then that Estimated Family Contribution, then that gets sent to the universities that you have, usually at this point, have gotten admission to. Sean: It'll go to every university ahead of time, so if the student applies to seven schools, you're gonna want it there well before decisions come out, there are usually very strict deadlines to get things there in time, but then, usually what happens in the admissions office is if Sal, if I'm reading your application in the admissions office, and I say great, Sal Khan is gonna be admitted, and I call down to our financial aid office, this is all done electronically now, but the financial officer, what he will do is open up your electronic file, and he will see the FAFSA sitting in there, and then he will see that, and it will say, ok, the Khan family should be able to pay 1000 dollars towards Sal's education, we cost 50 thousand dollars, so now we're gonna have to create a financial aid package for 49 thousand dollars to make it possible for you to come here. Sal: And so that's before you've been officially admitted? Sean: It's typically when you get admitted, then the admissions office will say, ok now calculate a financial aid package. Sal: And are these, I can imagine a lot of students would worry about this, are these kind of separate processes, you know, or will the admissions officers be able to see the kind of Estimated Family Contribution, and then does that have the potential to kind of affect your chances of admissions? Jim: Oh absolutely, I think colleges are mindful of the programs that they have in place to support these students, and so the college's overall mission plays a role in how they're distributing financial aid, and the way they view students that they are going to support, through what they uncover in the FAFSA. Sean: And Sal, let me add to that, there's two important definitions here. One is institutions that are need blind, and institutions that are need sensitive. And that's an important question for students to ask as they are starting to research colleges. Typically need blind schools mean, whether or not you are applying for aid has no impact on an admissions decision. And, we will fund you to 100 percent of your demonstrated need, based on the FAFSA. Ok, so that's an important one. Needs sensitive, and this is getting to your point, there are schools, and again, the great majority of schools are need sensitive, because they have limited budgets, so they might take into account at some point in the process, financial aid. If we're sort of talking to really high-achieving, low-income students right now, typically they are still gonna make out very well, because even though the school might take into account need, and the student may need as much as a full ride, if they were really top, top students, that's still somebody they are going to support and probably pay for. If you are a student that's not as strong, that's when you might get caught in exactly what you are asking about, is though you need x number of dollars, you're sort of right in a range where we have a lot of choices, that may make you less attractive. So, again the story I always tell students is, the better student you are, not only the more opportunities you'll have for admission, but the better financial aid packages you'll be eligible for. Jim: That's right. Sal: And is it possible it might even go the other way, where when they look at your need, and they say wow, he or she comes from a family that didn't have all the resources of many of our other applicants, that that actually could be a positive, when you apply? Jim: Oh absolutely, I think the, for example Andover operates on a need blind admission initiative, and we're looking for students who meet the demands of our program, and when you see students who may not have had all the preparation in terms of leading up to coming to Andover, it's very compelling to find students who could manage the rigor of our program, and not have had that preparation, and so we would be very attracted to them, and want to provide a financial aid package that supports them at our school. Sal: Right. Jim: Colleges operate the same way. Sal: And Phillips Andover, obviously a well-recognized high school, and colleges, you're saying, are operating in a very similar way, or many do. Jim: Exactly, yes they do. Sal: Very cool.