The 2023 school year has started, or will soon, for kindergarten through college students.
Learning can be expensive, even for public school attendees. But it is higher education that poses the highest costs.
Uncle Sam can help cover some educational expenses, but the school-related tax benefits noted in my post last week are limited. That means that students and/or their families must come up with the bulk of the school payments.
That's usually done through traditional financial assistance, such as scholarships, loans, or other forms of financial aid.
FAFSA form for financial assistance: Most university students (or their parents) use FAFSA, the common term for Free Application for Federal Student Aid. This form, completed by current and prospective college students, helps determine their eligibility for student financial aid.
In addition to helping students obtain federal aid, the completed FAFSA form information is also used by states and colleges in awarding their own grants, scholarships, and loans.
Students' and their families' income is considered in making educational aid decisions. The Internal Revenue Service has made getting that info from tax returns to FAFSA more convenient via its online Data Retrieval Tool (DRT).
That option is one of this weekend's Saturday Shout Outs.
The Department of Education's Federal Student Aid office has details about using the IRS DRT.
You don't go to the IRS website. Instead, when you fill out your FAFSA online, the DRT option is available via the "Link To IRS" option. It will automatically transfer the requisite tax return information from the IRS website into your FAFSA form.
FAFSA revisions: And changes are coming to the FAFSA form, which is the second shout out this Saturday.
"A long-awaited, supposedly user-friendly version of the college financial aid form known as the FAFSA will be unveiled for the 2024-25 school year," says Ann Carrns in the latest New York Times Your Money Advisor column, A New FAFSA Form Is Coming, Along With Changes in College Aid. That link will let nonsubscribers read the article.
However, there are winners and losers in the FAFSA changes.
On the plus side, notes Carrns, the new form aims to simplify the process of applying for college aid. However, a tweak to the form's formula effectively eliminates the so-called sibling discount previously available to some families with more than one child in college at the same time.
Also be aware of the FAFSA deadline change.
The form usually is available online on Oct. 1. But this year, writes Carrns, the form for 2024-25 assistance (yes, FAFSA has a long lead time) won’t be available until a yet-to-be-specified date in December.
I hope all y'all students and families can find the financial assistance you need to lighten your college financial load. And I hope these FAFSA shout outs help.
You also might find these items of interest:
- 6 tax-smart financial gifts for grads (and the givers)
- August is prime back-to-school sales tax holiday time
- Tax credit lesson: American Opportunity vs. Lifetime Learning
- Make paying for college a family affair, with contributions from parents, kids, and Uncle Sam
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