Category Archives: Students and Parents

I Didn’t File A Tax Return for The 2019 Tax Year, Should I keep my W-2’s?

Quite simply, yes.

If you had income (earned and/or unearned) in 2019 and you are a single dependent who can be claimed as a dependent on someone else’s tax return, you may still be required to file your own return. The amount of your 2019 income will determine whether or not you need to file. See the instructions at the beginning of the 2019 IRS 1040 form, and look for page 10, Chart B.

Now that you’ve determined whether or not you should file a tax return, let’s just say you didn’t have to file because you didn’t make enough money. If this describes your situation, it’s still very important that you save the W-2(s) you received this year. You should have received one from each employer who reported your earnings and withholding tax to the IRS.

Why is it so important that you hold on to your W-2s? Think FAFSA! The Free Application for Federal Student Aid (FAFSA) will ask you to report your income from two years prior to the year that you’ll attend college. So, if you plan to go to college in the fall of 2020, you’ll need your 2018 income information. For the fall of 2021, you’ll need to supply the information from 2019.

Also, you’re still required to report your wage, salary and tip income even if you didn’t receive a W-2 from an employer. If you’re not sure what your income was in 2019, use the Income Estimator that’s available on your FAFSA.

Keep those W-2’s! You’ll need them when you’re applying for federal financial aid.

Happy “Pack Your Lunch” Day!

If you’ve taken a look at the Financial Aid Offer from your college of choice, you may have been surprised by the cost of room and board for one year of school. Your ‘room and board’ estimate covers two necessities that can’t be overlooked—a roof over your head and the food you’ll need to keep you going. Consider these tips to keep room and board costs low.

Where to live

  • Have you considered how much money you could save by living at home for another year or two? Nearby community colleges usually charge lower tuition, and they offer the same general education courses required at four-year universities. Add in your savings on room and board, and you’ve got a significantly lower total cost of attendance.
  • Living on campus? Consider this: a roommate can reduce the cost of room and board quite a bit.
  • Living off campus? As a general rule, you’ll find that apartments and houses located close to the campus will charge higher rent than those located farther away. Consider having two or three roommates if you have the space.

Where to eat

  • Colleges and universities offer various meal plans to their students, and meal plans are often required for those who live on campus. Consider trying one of the less expensive plans (less meals every week) and plan to prepare more meals in your dorm room, apartment, or off-campus rental. Maybe your roommate would agree to split the cost of non-perishable bulk foods that you both use frequently. Clip coupons for even more savings.
  • Limit eating out. Consider asking friends over for a potluck or ask them to bring sharable snacks.

Other ways to manage college expenses

  • Check out all available options for financial aid. Apply for scholarships every semester, not just your freshman year. New options are added each year and qualifications change. Don’t miss out on free money that you may be qualified to receive.
  • Is it absolutely necessary for you to have a car on campus? Consider riding your bike and using public transportation. Larger schools often have free or low-cost transit systems.
  • Graduate on time to reduce the total cost of completing your program.
  • Earn some money. Check on work-study jobs or find a part-time job in town.
  • Limit use of credit cards to true emergencies. You’ll likely spend less if you use cash, and you won’t risk paying interest on your purchases.

For more ideas on cutting the costs of college, be sure to read OKMM’s money management article, Getting Through College on Less.

A College Sent Me A Financial Aid Offer – Now What?

When you submitted your Free Application for Federal Student Aid (FAFSA), you listed one or more college codes that represent the schools that interest you.  Once your FAFSA’s been processed, you may begin to receive financial aid offers from these schools sent electronically or via the US Postal Service. It’s important to read each offer carefully, as they describe the types and amounts of financial aid a college or career technology center can provide to help you pay for one year of higher education.

On your financial aid offer you’ll see:

  • The total Cost of Attendance (COA) – An estimate of what it costs to go to that school for one year
  • Expected Family Contribution (EFC) – A number calculated from your FAFSA that’s used by the school to determine how much financial aid you’re eligible to receive (most likely not the amount you’ll be expected to pay)
  • Types and amounts of aid the school can offer you; this list is often called a ‘financial aid package’. Your offer may consist of:
    • Grants – aid based on financial need that typically doesn’t have to be repaid
    • Scholarships – gift aid awarded to you by colleges, state agencies, foundations, tribal and private organizations
    • Federal work-study – an opportunity for you to work on or off campus to earn money for college expenses
    • Federal student loans – funds awarded based on financial eligibility that must be repaid, with interest
    • Federal PLUS loan – a loan your parent(s) may borrow to help you pay for college; your parent(s) are expected to repay the loan (credit check required)

Now, subtract all of the financial aid shown on the offer from your Cost of Attendance. This will determine your estimated Net Cost, which is the out-of-pocket amount you’ll be expected to pay. If you should end up with a negative amount, the Net Cost would be zero.

What options are available to help you cover the Net Cost?

  • More scholarships – You don’t have to be a straight A student or a sports star to qualify for many different kinds of scholarships. OKcollegestart.org and UCanGo2.org are great places to begin your scholarship search.
  • A 529 College Savings Plan – visit ok4saving.org for more information
  • Military benefits – visit military.com/education/gi-bill to learn more
  • A monthly payment plan approved by your school

Don’t forget:

  • You don’t have to accept all financial aid offered to you, especially when it comes to borrowing student loans. Using a monthly payment plan while you’re in college can be less expensive than a monthly loan payment with added interest after you’ve graduated. If you’re unable to make a monthly payment to the school, consider making smaller monthly interest payments on any unsubsidized student loan(s). This will decrease your overall student loan debt once you graduate or leave school.
  • Pay attention to deadlines. Accept or decline your financial aid offer before the specified date.
  • If you receive more than one financial aid offer, you may want to determine what your net cost would be at each college. Ultimately, you’ll want to choose the school that’s the best fit for you.
  • To add more school codes to your FAFSA, log in as a returning user at studentaid.gov.

Financial Aid Awareness Month

Happy Financial Aid Awareness Month! February is the time to learn how you can fund your education with various financial aid options. In order to receive federal financial aid, you must submit a Free Application for Federal Student Aid, or FAFSA. Once your FAFSA has been submitted, your school’s financial aid office will notify you of your aid eligibility. Before you decide which options you’ll accept, take time to learn about the different kinds of aid that are available to you. Since they’re all beneficial, here’s an overview of each type of financial aid.

  • Scholarships. Potentially the most significant type of financial aid available is a scholarship. It’s free money you can earn from your own hard work, financial need, merit, family history, skills, hobbies or athletics. The more scholarship applications you complete, the more likely you are to win an award. While you don’t have to submit a FAFSA to apply for a scholarship, some programs may request that you do. Scholarship applications could ask you to write an essay, submit a video, take a photograph or complete a service project. To make sure your application matches the scholarship requirements, read all directions carefully before you start the process. If you’re not sure where to look for scholarships, UCanGo2.org and OKcollegestart.org are great places to start your search. Remember that scholarships can be the additional assistance you need to help you reach your educational goals.

  • Grants. Sometimes referred to as free money since they usually don’t have to be repaid, grants are given to those who demonstrate financial need. A common type of grant is the Pell Grant. The Federal Supplemental Educational Opportunity Grant, or FSEOG, is not as common since it is only given to students who show extreme financial need. For students interested in becoming teachers, there’s the Teacher Education Assistance for College and Higher Education Grant, or TEACH Grant. Students interested in the TEACH Grant should carefully read all guidelines. If the grant requirements are not met, the money could turn into a loan that must be repaid with interest. Additionally, there’s the Iraq and Afghanistan Service Grant for those who’ve lost a parent or guardian due to military service in Iraq or Afghanistan after 9/11. As with any type of financial aid, be sure to speak with your financial office if you have questions about grants.
  • Work-study. Also called earned aid, work-study allows students to work and earn money for college expenses while they’re in school. Work-study positions are part-time jobs that can be on or off campus. The supervisors over these positions tend to recognize that school is a priority and are usually mindful of your class schedule. Take advantage of these positions because they can give you work experience and time to focus on your academic responsibilities. Each school will have different ways to apply for a work-study job, so talk with your school to learn more about the application process.

  • Student Loans. While this type of aid is borrowed money that must be repaid with interest, student loans can help you bridge the gap between grants and scholarships. When it comes to borrowed money, it’s important that you borrow only the amount you need to pay school expenses! Federal loans can be beneficial due to their fixed interest rates (it will not change over time) and flexible repayment options. One type of federal student loan is the Direct Subsidized loan. This aid is for undergraduate students who demonstrate financial need. The government will pay the accruing interest on a subsidized loan while the student is enrolled in school at least half-time. Another federal loan, the Direct Unsubsidized student loan, is for students who do not show financial need. With this loan, the interest will always be accruing on the loan and students will be responsible for paying the interest. For those who need extra financial assistance there’s the Direct Parent Loan for Undergraduate Students or the Direct PLUS loan. Parents of dependent undergraduate students can apply for the PLUS loan to help cover additional college expenses for their child. In order to receive a Direct PLUS loan, parents must complete the loan application and meet certain credit requirements. Students will have six months from the time they graduate, drop below half-time enrollment or leave school to start repaying Direct Subsidized and Unsubsidized loans. Those who take out a PLUS loan will have to start repayment once funds have been disbursed.

Now that you know a little more about financial aid, use this month to decide which options could be right for you. For more financial aid information, go to StudentAid.gov.

What is Verification?

After you’ve submitted your FAFSA (Free Application for Federal Student Aid), it’s possible that your application could be flagged for verification. Verification is the process a financial aid office must complete to determine the accuracy of the information on your application. If your FAFSA is selected for verification, the financial aid office from the school(s) listed on your FAFSA may ask you to provide documentation about the addresses, names or financial data you provided. The aid officer will let you know which sections must be corrected and the documentation you’ll be required to provide to verify your information.

Being selected for verification doesn’t mean your FAFSA is incorrect. Annually about 30% of all FAFSA applications are chosen for this process and the financial aid office is required to verify your data. Monitor your email for requests for additional information and swiftly respond to those requests. Your eligibility for financial aid will not be reviewed until the verification process is complete. Follow up with the financial aid office to check on your application status because the more you cooperate with them, the faster the process will go. Verification is the last official step they’ll need to complete to provide you with a financial aid offer. The offer will list the amount and types of financial aid programs you may use to help cover your college expenses.

What’s With All The Acronyms?

As you plan for college and begin to explore the different ways to pay for higher education, you may come across some acronyms that are commonly used in the world of financial aid. We’ve listed some here, with brief explanations of each.

FSA                 Federal Student Aid – The branch of the U.S. Department of Education that oversees federal financial aid disbursed to higher education institutions for students who qualify.

FAFSA            Free Application for Federal Student Aid – A form submitted by you that is used to determine your eligibility for federal financial aid. One or both parents may also need to contribute their information.

SAR                Student Aid Report – Contains the data submitted on your FAFSA, along with next-step instructions. Once the FAFSA is processed, you’ll receive information on how to download and print this report.

EFC                 Expected Family Contribution – A number found on your Student Aid Report that’s used by a financial aid office to determine how much aid you’re eligible to receive.

COA                Cost of Attendance – The average annual cost for attending a specific college, university, technology center or proprietary school, which includes tuition, room and board, books, fees, supplies, personal expenses and transportation.

ISIR                 Institutional Student Information Record – A report sent to your selected college(s) that contains the data from your FAFSA.

MPN                Master Promissory Note – A document signed by you that says you promise to repay a student loan, along with all accrued interest and fees. Remember, you don’t have to accept the full amount of student loans you may be offered.

For a much larger list of the many acronyms and terms used throughout the federal financial aid process, visit StudentAid.gov.

What’s a Student Aid Report?

After you complete the Free Application for Federal Student Aid (FAFSA), be on the lookout for your Student Aid Report (SAR). The SAR is an electronic or paper document that summarizes the data you put on your FAFSA. It also provides some basic information about your eligibility for federal student financial aid. If you completed, signed and submitted your FAFSA electronically, this document will be sent to your email address within 3-5 days. If you did not include an email address, a paper version of the SAR will be mailed to your postal address in approximately 2-3 weeks. You can also access your SAR by logging in to your account at FAFSA.gov.

The SAR contains important information, like your Expected Family Contribution (EFC) and your Data Release Number (DRN). The EFC is a measure of your family’s financial strength and is calculated according to a formula established by law. It’s based on the information provided on the FAFSA, but the EFC is NOT the amount of money your family will have to pay for college. It’s a number used by your school to calculate the amount of federal student aid you’re eligible to receive.

Your DRN is located below your EFC on the SAR and is necessary if you want your college or career school to change certain types of information on your FAFSA. Speak with someone at your college financial aid office if there has been a significant change in income for you or your parents or you have a special circumstance you need to discuss with the aid administrator.

Your SAR might indicate that you’ve been selected for verification. This is a process schools use to confirm the information on your FAFSA is correct. Your college financial aid office will notify you if additional paperwork is needed to fulfill this requirement.

Review the remainder of your SAR for any errors. If you find anything that should be corrected, log back in to FAFSA.gov, access your FAFSA, and make the necessary changes. Then enter the appropriate FSA IDs and submit your FAFSA again.

How to make FAFSA Corrections

The Free Application for Federal Student Aid, or FAFSA, is a form you submit to determine your eligibility to receive financial aid. This form asks various questions on information you probably haven’t thought about before. Since these questions may be uncommon to you and your family, it’s easy to make a mistake when completing the application. If you need to make corrections to the FAFSA after you’ve submitted it, there are a few ways you can fix the errors.

  • Log back in – If you need to correct some information on your FAFSA, such as change your high school’s name or add more colleges to the application, you can simply log back into the FAFSA form. To do this, you’ll need your FSA ID. When you log in, you’ll see a box that shows information about your application status, along with your next steps in the FAFSA process. Under this box is a section that says, “You can also”. In that section, find the link to “Make FAFSA Corrections”. Click on the link to access your application. After you’ve made the necessary changes, submit the application again with the correct information. Don’t forget to sign the FAFSA again with your FSA ID!

  • Update your SAR – When you first submit your FAFSA, it generates a Student Aid Report or SAR. This report shows all the information you entered on your application. If you need to change your name or Social Security number, you can make those adjustments by printing out your SAR and correcting the errors. Unfortunately, the application doesn’t allow you to update this information on the electronic version. You can find and print your SAR in the “You can also” section of FAFSA.gov, after you’ve logged in with your FSA ID. Once you’ve printed out the report and made your changes, mail the corrected SAR to the address stated on the form. Additionally, if you need to change your name due to marriage, divorce, etc., you must first make those changes with the Social Security Administration (SSA). When SSA has corrected your information, you can then update your FSA ID, as well as the FAFSA form, with the right data.

  • Speak with financial aid – For small changes such as updating your email or mailing address, you can use the previous two methods. However, if you need to correct financial information on the FAFSA, especially if you used the IRS Data Retrieval Tool, you may have to submit corrections through the financial aid office at your anticipated school. Students who manually entered their financial information on the FAFSA can log back into FAFSA.gov and make changes. Those who used the IRS Data Retrieval tool to complete the income portion must speak with their financial aid office to fix any errors. Talk to the office about the errors that were made and learn how you can correct the mistakes. The financial aid office may want extra documentation, so be sure to give them all the required information. You can make changes to your name or Social Security number through the financial aid office as well.

Submitting the FAFSA with the right information is important. If you need to make changes, don’t wait. Adjust your answers as soon as you learn a mistake was made. Using any of these methods will help you successfully make changes. For more information on how to submit FAFSA corrections, go to studentaid.ed.gov.

What’s an EFC?

The Expected Family Contribution (EFC) is a number that’s used to help determine your eligibility for financial aid for college. Each school that you selected to share your information with on the Free Application for Federal Student Aid (FAFSA) will use the EFC to determine how much aid you may receive at their individual institution. Your EFC is calculated through a formula that uses your family’s taxed and untaxed income, assets and benefits. The size of your family, the number of family members who will attend college during the academic year and the age of your older parent will also influence your EFC.

Financial aid administrators will subtract the EFC from the student’s cost of attendance to determine their need for the following federal student aid programs:

  • Federal Pell Grants
  • Federal Subsidized Student Loans
  • Federal Supplemental Educational Opportunity Grants
  • Federal Work-Study

Other federal and state scholarship programs will also use the EFC to determine your eligibility for additional aid. For a detailed guide on exactly how an EFC is calculated, you can check out The EFC Formula.

It’s important to know that your EFC is not the guaranteed amount of money you or your family will be required to contribute to your cost of attendance. It’s only a number used by your school to calculated your financial aid eligibility.

The EFC is a very influential calculation, so it’s important to complete your FAFSA sooner than later. You can find the FAFSA online at FAFSA.gov.