FAQs about Financial Aid

Here are some of the most commonly asked questions about financial aid

 

Topics:

  1. General Questions about Eligibility and Applying
  2. FAFSA Questions
  3. Home Schooling and Financial Aid
  4. Divorce and Financial Aid
  5. What is the relationship between bankruptcy and financial aid?
  6. Miscellaneous and Unusual Questions

 

General Questions about Eligibility and Applying

I probably don't qualify for aid. Should I apply for aid anyway?

Yes. Many families mistakenly think they don't qualify for aid and prevent themselves from receiving financial aid by failing to apply for it. In addition, there are a few sources of aid such as unsubsidized Stafford and PLUS loans that are available regardless of need. The FAFSA form is free. There is no good excuse for not applying.

Do I need to be admitted before I can apply for financial aid at a particular college?

No. You can apply for financial aid any time after January 1. To actually receive funds, however, you must be admitted and enrolled at the college.

If I enroll less than full-time, can I still receive financial aid?

Yes. Although financial aid is awarded based on full-time enrollment, the award letter gives the student the amount of financial aid, by semester, he/she will receive at all credit hours. Some funds can only be received if the student is enrolled half-time (6 credits or more).

Why can't I submit my financial aid application before January 1?

The need analysis process for financial aid uses the family's income and tax information from the most recent tax year (the base year) to judge your eligibility for need-based financial aid during the upcoming academic year (the award year). Since the base year ends December 31, you cannot submit a financial aid application until January 1. After all, your parents might earn a year-end bonus or realize capital gains from selling stocks on December 31. If you submit the financial aid application before January 1, it will be rejected.

Do I have to reapply for financial aid every year?

Yes. Most financial aid offices require that you apply for financial aid every year. If your financial circumstances change, you may get more or less aid. After your first year you will receive a "Renewal Application" which contains preprinted information from the previous year's FAFSA. Note that your eligibility for financial aid may change significantly, especially if you have a different number of family members in college. Renewal of your financial aid package also depends on your making satisfactory academic progress toward a degree, such as earning a minimum number of credits and achieving a minimum GPA.

How do I apply for a Pell Grant and other types of need-based aid?

Submit a FAFSA. To indicate interest in student employment, student loans and parent loans, you should check the appropriate boxes. Checking these boxes does not commit you to accepting these types of aid. You will have the opportunity to accept or decline each part of your aid package later. Leaving these boxes unchecked will not increase the amount of grants you receive.

How is financial aid paid?

Financial aid awards, except College Work-Study, the Federal Direct Stafford Loan and the Federal PLUS loan, are accepted for all students. Financial aid pays to the student’s account based on the start date of the class. However, financial aid refunds will not be issued until the fourth week of the semester. HOW FINANCIAL AID IS PAID provides specific information on financial aid payments, based on the type of award.

Are my parents responsible for my educational loans?

No. Parents are, however, responsible for the Federal PLUS loans. Parents will only be responsible for your educational loans if they co-sign your loan. In general you and you alone are responsible for repaying your educational loans.

You do not need to get your parents to cosign your federal student loans, even if you are under age 18, as the 'defense of infancy' does not apply to federal student loans. (The defense of infancy presumes that a minor is not able to enter into contracts, and considers any such contract to be void. There is an explicit exemption to this principle in the Higher Education Act with regard to federal student loans.) However, lenders may require a cosigner on private student loans if your credit history is insufficient or if you are underage. In fact, many private student loan programs are not available to students under age 18 because of the defense of infancy.

If your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments, not them.

Why is the family contribution listed on the SAR different from the family contribution expected by the college?

The federal formula for computing the expected family contribution is different from those used by many universities. In particular, the federal formula does not consider home equity as part of the assets.

If I take a leave of absence, do I have to start repaying my loans?

Not immediately. The subsidized Stafford loan has a grace period of 6 months and the Perkins loan a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period is used up.

If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.

I got an outside scholarship. Should I report it to the financial aid office?

Yes. If you are receiving any kind of financial aid from university or government sources, you must report the scholarship to the financial aid office.
Unfortunately, the college will adjust your financial aid package to compensate. Nevertheless, the outside scholarship will have some beneficial effects. At some universities outside scholarships are used to reduce the self-help level. For example, at MIT the outside scholarship is first applied to reducing the self-help level, and only when the scholarship exceeds self-help does it replace institutional grants. At other universities outside scholarships are used to replace loans instead of grants.

Where can I get information about Federal student financial aid?

Call the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243) or 1-800-730-8913 (if hearing impaired) and ask for a free copy of The Student Guide: Financial Aid from the US Department of Education. This toll free hotline is run by the US Department of Education and can answer questions about federal and state student aid programs and applications. You can also write to:

Federal Student Aid Information Center
PO Box 84
Washington, DC 20044

Are work-study earnings taxable?

The money you earn from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full time and work less than half-time).

Federal Work-Study earnings during the calendar year should be included in the totals for AGI and Worksheet C on the FAFSA. Work-study earnings should only be included in Worksheet C when they represent financial aid to the student, since the answer to this question is used as an exclusion from taxed income. The student should also be careful to report amounts based on the calendar year, not the school year.

Is it legal for a 17-year-old student to sign a promissory note for a student loan, even though the student has not yet reached the age of majority?

Normally, a minor cannot be held liable for a contract that they sign. However, in 1992 the Higher Education Act was amended to permit eligible students, defined as per Title IV regulations, to sign promissory notes for their own Federal student loans. As such, student loans represent one of the few exceptions to the so-called "defense of infancy". The specific citation is section 484A(b)(2) of the Higher Education Act of 1965 (20 USC 1091a(b)(2)), and applies to Stafford, PLUS and Consolidation Loans. It does not appear to apply to Perkins and Direct Loans, although it was clearly the intent of Congress that it should.

Several states have also passed similar laws that consider minors to be competent to enter into a contract for an education loan. This extends similar protection to private and non-federal loans. All private education loans require a cosigner when the student is under the age of majority, just to be safe.

Will failure to meet the deadlines affect the possibility of receiving aid?

Yes.  For the best chance of receiving aid, submit all materials by the deadlines.

 

FAFSA Questions

Where can I get a copy of the FAFSA?

The online version of the form is available at http://www.fafsa.ed.gov.

Are photocopies of the FAFSA acceptable?

No. Only the original FAFSA form produced by the US Department of Education is acceptable. Photocopies, reproductions, facsimiles and electronic versions are all not acceptable. (See DCL GEN-95-21.)

How soon after January 1 should the FAFSA form be sent in? Is it better to wait until the income tax forms have been completed?

Send in the form as soon as possible after January 1. Do not wait until your taxes are done. Although it is better to do your taxes early, it is ok to use estimates of your income, so long as they aren't very far off from the actual values. You will have an opportunity to correct any errors later. If you wait too long, you might miss the deadline for state aid. Most states require the FAFSA to be submitted by March 1, and some even as early as early or mid-February.

I sent in my FAFSA over four weeks ago but haven't heard anything. What should I do?

If you haven't received a Student Aid Report (SAR), call the Federal Student Aid Information Center at 1-800-4-FED-AID (toll free) or 1-319-337-5665. You must provide them with your Social Security number and date of birth as verification.
You can also write to:

Federal Student Aid Programs
PO Box 4038
Washington, DC 52243-4038

to find out whether your FAFSA has been processed or to request a duplicate copy of your SAR.

I was born on January 1, when I will be 24 years old. Can I check Yes in the answer to the FAFSA question "Were you born before January 1, ..." to qualify as an independent student?

The official answer is no. If you check yes, your SAR will be flagged for verification. However, most financial aid administrators would use professional judgment to override the default dependency determination for a student born on January 1 who also demonstrates financial self-sufficiency.

What does “verification” mean?

Verification is a process required by federal regulations, by which Macomb Community College compares information reported on the Free Application for Federal Student Aid (FAFSA) against tax returns and all supporting financial documents, (i.e., Social Security, unemployment, etc.) Students are randomly selected for verification by the U.S. Department of Education or by Macomb Community College, based on certain criteria. Macomb Community College verifies information included on the FAFSA if the student reports income less than $3000 per household member, has conflicting information in the file, or if the student is selected for verification by the Central Processing System (CPS). Applications selected for verification are indicated by an asterisk (*) next to the EFC number on the Student Aid Report (SAR).

What do those acronyms on the Student Aid Report (SAR) mean?

The acronyms on the bottom of the SAR represent intermediate results in the need analysis. To fully understand their meaning, you will need to be familiar with the federal need analysis methodology, such as is used by the EFC Estimator. The meanings of the acronyms are as follows:

EFC

Expected Family Contribution

TI

Total Income

ATI

Allowances Against Total Income

STX

State and Other Tax Allowance

EA

Employment Allowance

IPA

Income Protection Allowance

AI

CAI

Contribution from Available Income (Independent Student)

DNW

Discretionary Net Worth

APA

Education Savings and Asset Protection Allowance

PCA

Parents' Contribution from Assets

AAI

Adjusted Available Income

TPC

Total Parents' Contribution

TSC

Total Student's Contribution

PC

Parents' Contribution

SIC

Dependent Student's Income Contribution

SCA

Dependent Student's Contribution from Assets

If an asterisk appears next to the EFC figure, the student has been selected for verification. The asterisk is followed by a code that explains the reason why the student was selected for verification. The letter explains the reason for selection, and the number indicates the priority, with code 1 the highest priority and code 25 the lowest priority (although there are higher codes).

Why do I have to provide parent information?

Parent income and asset information is required because the U.S. Congress says families have the primary responsibility to pay for the student’s college education. Parent information is not required if the student meets one of the following criteria:

• Born before January 1, 1986

• Married

• A veteran of the U.S. Armed Forces

• Serving on active duty in the U.S. Armed Forces for purposes other than training

• Has legal dependents other than a spouse and supports dependents 50% or more. The dependants cannot be supported by someone other than the student

• Student is an orphan, ward of the court or in foster care at any time since turning age 13

• Student is an emancipated minor as determined by a court in Michigan

• Student is under legal guardianship as determined by a court in Michigan

• Student is determined to be an unaccompanied youth who was homeless, on or after July 1, 2008, by a high school or school district homeless liaison

• Student is determined to be an unaccompanied youth who was homeless, on or after July 1, 2008, by a director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development

• Student is determined to be an unaccompanied youth who was homeless or was self-supporting and at risk of being homeless by a youth basic center or transitional living program.

For more answers to frequently asked questions please click here.

 

Home Schooling and Financial Aid

Are there any programs that provide student financial assistance to homeschooled children?

Homeschooled students are eligible for federal student aid for college if they have "completed a secondary school education in a home school setting that is treated as a home school or private school under State law" (Section 484(d)(3) of the Higher Education Act of 1965). Homeschooled students have not been required to take the GED or take an ability-to-benefit test since the Higher Education Amendments of 1998. High school dropouts must take a GED exam or an ability-to-benefit test, but students who have completed a home schooled secondary education that satisfies the requirements of state law do not. For additional information, see Federal Requirements for Homeschoolers Seeking College Admission and Financial Aid, Home School Legal Defense Association (HSLDA), May 2003.

Many private scholarships are open to homeschooled students. Some scholarships, however, require a high school diploma or GED. If a scholarship requires a high school diploma or GED, ask for a clarification or exception before applying. If you encounter resistance, it can help to point out that in 2005 the winner of the Siemens Westinghouse Competition in Math, Science and Technology's $100,000 scholarship was a 16-year-old homeschooled student.

There aren't many scholarships specifically targeted at homeschooled students, other than those sponsored by the Home School Foundation.

 

Divorce and Financial Aid

An entire section of FinAid is devoted to the topic of Divorce and Financial Aid. It discusses which parent is responsible for completing the FAFSA, the obligations of non-custodial parents to pay for college, college support agreements, the obligations of step-parents, and the ability of non-custodial parents to take advantage of the various tax benefits for education.

 

Bankruptcy and Financial Aid

An entire section of FinAid is devoted to the topic of Bankruptcy and Financial Aid. It discusses both whether student loans can be discharged by bankruptcy, as well as the impact of a bankruptcy on eligibility for student aid.

 

Misc. and Unusual Questions

I have heard about a scholarship for left-handed students. Can you tell me more information about it?

This question comes up frequently, because the popular press and scholarship matching services like to use it as an example of unusual scholarships.

The only scholarship for left-handed students is the Frederick and Mary F. Beckley Scholarship of up to $1,000. This scholarship is awarded to left-handed students who will be attending Juniata College. This scholarship is not available to students who aren't enrolled at Juniata College. For more information, write to Office of Student Financial Planning, Juniata College, 1700 Moore Street, Huntington, PA 16652.
To find other scholarships for students with specific interests or abilities, see the profile-based aid section. FinAid also has a page devoted to unusual scholarships.

What colleges have cut their tuition rates instead of increasing them?

A handful of schools have instituted one-time tuition rate cuts, temporary tuition freezes, or level tuition rates (same tuition rate all four years). A list of these colleges can be found in the Tuition Freezes, Tuition Cuts and Level Tuition section of FinAid.

Which colleges have committed to providing free tuition or no loans in the aid package for low income students?

A handful of schools have instituted policies that ensure that low income students have no loans in their financial aid packages. See No Loans for Low Income Students and Free Tuition for additional information.

Is financial aid available for illegal aliens and undocumented students?

See Financial Aid and Scholarships for Undocumented Students.

Why doesn't the FAFSA include line 58 of IRS Form 1040 (self employment tax) with taxes paid?

Line 27 of IRS Form 1040 subtracts one-half of self-employment taxes from AGI, corresponding to the employer's share of FICA taxes. The employee share of FICA taxes is calculated automatically by the need analysis formula based on income earned from work. If you include line 58 in the total for taxes paid, contrary to the FAFSA instructions, you are double counting the self-employment taxes

What happens if I withdraw from all of my classes?

After the first week of classes, you are required to pay all or a portion of your tuition and fees depending on when you withdraw from classes. Federal regulations require that we prorate your financial aid based on the length of time you were in classes. For example, if you attended classes for 35 days of the semester and there were a total of 110 days in the semester, you would be eligible for 35/110 or 31.81% of your federal financial aid.

To officially withdraw from Clarendon College, you must notify the Enrollment Services Office.

For a copy of our Refund Policy, please refer to page 29 of the College Catalog.

What happens if I stop attending any or all of my classes?

Enrollment must be verified at the time loan disbursements are received from the Department of Education. If you have never attended a class, you will be considered to not be enrolled in that class. For example, you register for 6 credit hours but only attend one of the classes, when your enrollment is verified, you will be considered to be enrolled for only 3 credit hours and therefore ineligible for some types of financial aid including student loans.

If you begin attending classes but later stop, at the point you stop attending classes, you will be considered to have unofficially withdrawn from those classes. If you have not completed at least 60% of the semester, some or all of your financial aid may be revoked.

Federal regulations require that we recalculate your financial aid if you do not attend classes beyond the 60% point in the semester. The amount of financial aid that you qualify for is determined by the number of classes in which you are enrolled, the type and amount of financial aid you received and how long you attended classes.

If there is a medical or family reason why you must withdraw or stop attending classes, please contact the Director of Financial Aid to discuss how your aid will be affected.

What is Satisfactory Academic Progress?

In order to maintain eligibility for financial aid, you must maintain a cumulative grade point average of 2.0 on a 4.0 grade scale. You must also complete 75% of credit hours you have been enrolled. In addition, you must complete your program within the normative time frame established for undergraduate students.

You will be informed by the Financial Aid Office if you fail to maintain satisfactory academic progress and will be notified of the procedures to appeal for continued financial aid eligibility. Please refer to the Satisfactory Academic Progress Policy for more information.

Can I get financial aid for summer courses?

The Higher Education Opportunity Act (HEOA) of 2008 allows for eligible students to receive up to 200% of their Pell Grant during one academic year.  Specific conditions must be met in order to be eligible for a Year Round Pell (YRP): 

• You must receive 100% of your regular scheduled Pell grant award

• You must have completed 24 credit hours for the academic year

• You must be enrolled in at least 6 credit hours for the semester/term that you will receive your Second Pell Grant

How does financial aid work if I am taking classes at another school?

Clarendon College students who elect to attend another college or university as a Concurrent/Transient student may be eligible to receive aid from Clarendon College for those courses.

You must be enrolled in a minimum of 6 credit hours at one institution to meet eligibility requirements. Students who enroll in 3 hours at one school and 3 hours at another are not eligible for funding except Federal Pell Grants.

Aid awarded at Clarendon College may be processed and paid after receipt and processing of your Consortium Agreement and Enrollment Certifications from the host institution. No additional aid will be disbursed until the process between Clarendon College and the host institution is complete.

Reminder: Federal financial aid regulations prevent you from receiving financial aid disbursements from two separate institutions in the same academic term. Doing so will result in non-compliance and may jeopardize your financial aid eligibility.آ  Please contact the Director of Financial Aid to discuss how to receive aid at both schools.