#38 How to Get Financial Aid Now Transcript

THIS IS AN AUTOMATED TRANSCRIPT… PLEASE FORGIVE THE TYPOS & GRAMMAR! xo-Lisa

 

Stuart Siegel  00:00

Soup to nuts gathering everything took about 10 hours to do it right for for the average middle and upper middle class family. It’s about 10 hours a gathered on finish the process. With profile, you’re doubling that. It’s a really long form. And it’s pretty scary to most parents. And not only that, here’s if you’re divorced or separated, like so many families are have that situation now they’re gonna go after we call it the noncustodial parent. Now it’s called Parent number two, not only them, but they’re also gonna go after if they’ve remarried that parent

 

Lisa Marker Robbins  00:36

25 years ago when college was far less expensive than it is now for your family. Stuart Siegel’s spent 30 hours stumbling his way through financial aid applications, only to be disappointed in the outcome. This dad and licensed financial planner, immersed himself in congressional code and surrounded himself with experts in order to later correct his earlier mistakes with child number one. And guess what he made up for it with kids number two, and three. And Stewart earned a reputation as the financial aid negotiator. He later developed what he calls the Turbo Tax financial aid that catches your potential slips that he’s certainly made with child number one. If you’re listening in real time, the first week of October, financial aid applications have just opened up if you have a senior, but heed Stewart’s advice, and don’t complete those in the first two weeks of October. Then when you do apply what he’s going to teach you today to complete the forms correctly. I’m Lisa marker Robbins, and I want to welcome you to College and Career Clarity, a flourish coaching production. Let’s dive right in to a great conversation. Well, it is my pleasure today to welcome Stuart Segal of financial aid now to the podcast. This is going to be a timely episode. We’re recording it at the very end of August. But he and I both know that financial aid month is right up there. We’re almost to it in October, and we’re going to give this episode to our listeners. Because Stuart’s the guy that knows the mistakes that families make, and he wants to help them avoid him. As a matter of fact, you created financial aid now Stewart out of your own journey as a parent right and mistakes that you probably made along the way. Welcome. Thank you. Yeah, the journey started almost 26 years ago. And I had three children. And I went through the process. And I was a financial advisor at the time thinking this is a no brainer, I could just knock this out. And then I realized, you know, they’re asking me questions that I’m really not comfortable answering to the best of my advantage. So I just sort of took this leap into the unknown, which is financial aid 10,000 pages of rules and regulations. Yeah, over the past quarter century, I’ve got to know what it’s all about. Yeah, you’ve got the heart of a dad. At that beginning. That was you wanted to provide college for your kids. And then like, what kind of questions were they asking? So you so you obviously knew a ton about financial planning since you were in that space. But when families and my last ones in college right now, but would families go about doing those forms? What were some of the questions that families can expect to have to answer on the FASFA or the CSS Profile that felt to you? Like, I don’t want to answer these questions, or this is a lot. Sure the FAFSA s is about your income, your personal income, and if your student has income, and also how much money you have in the bank, what are your investments, so a lot of demographic information, which is not hard. You know, it’s kind of hard to mess that up. But it’s the way the questions are put to you. And you have to think and we can talk about this a little more. But basically, parents are very uncomfortable with putting down and knowing exactly how to value their assets. Yeah. And the thing is, after you file this thing, it’s kind of over. I mean, the schools have your information, they have that expected family contribution, or which is the EFC many people probably heard of and that’s the minimum amount of money you’d be expected to pay in any college. And the number one question I get from parents once they see that is how does the college and the government expect me to pay that and again, as we’re starting to talk, I’m like, You know what, we probably have some listeners that are like, What in the world is the FASFA? Let’s back up. What in the world is the FASB as an acronym? You go ahead and tell our listeners what that is.

 

Stuart Siegel  05:00

okay, yeah, it stands for the Free Application for Federal Student Aid. And this is the form that you have to fill out if you want to qualify for any federal programs like a Pell Grant, or a student loan, a federal subsidized or unsubsidized student loan, or even a parent loan that’s given, administered through the, through the Department of Education.

 

Lisa Marker Robbins  05:22

So if you want those, you have to fill it out. But like, some of my listeners are smart, successful, affluent families, they’re going right away, like, I’m not going to qualify for any of this need based aid that you’re talking about, perhaps. But if they want to use the federal student loan, they have to fill out the FAFSA as well, right?

 

Stuart Siegel  05:43

You have to do it. And there’s a lot of reasons why an affluent family should fill out the form no matter what. And we can go into those specific

 

Lisa Marker Robbins  05:50

Okay, let’s get to those a little bit later. But I’m going to just say right now, if we’ve got an affluent family who, you know, is looking to be smart about college and preserve their wealth, stay tuned, we’ll get to that after we get through these basics about why they shouldn’t dismiss going ahead and completing that. So okay, so the fast spa is it’s free, yes, fill it out, you talk all about your income, your assets, your students and calm. And after you fill out this form, then at the very end, it gives you what was that acronym,

 

Stuart Siegel  06:23

an EFC, or expected family contribution, which distill down just simply means that’s the minimum amount of money, you as a parent or a family are going to be expected to pay for any college. And the way it works is you take that number, and you merely subtract it from the actual costs of the school, which is known as the cost of attendance. And then you have a financial need. Now, if there is a positive number, then you qualify for financial aid and mode, a lot of schools will use the FAFSA, to give scholarships and grants their own money based on that form. So that’s why if you don’t fill it out, you might not qualify for some of that money, even if, because parents are really not a very good judge of what they’ll qualify for. Especially now, because college costs so much. So if their EFC was whatever they you know, whatever it is 200,000 Whatever, they can still get financial aid. It’s It’s It’s incredible how much the cost have come up and equalized the opportunities for families who are comfortable and think they might not otherwise qualify for. So it’s essentially a form that if you want to really get, you know, have a chance at reducing the cost save on the cost of college, you want to fill out that form.

 

Lisa Marker Robbins  07:46

Well, and so to your point, and I encountered this one time with one of my students, some colleges, even if you’re fluent, and you’re not going to qualify for any need based aid, they require you to submit the FAFSA to even qualify for their pool of merit money based on grades and academics and special talents and ACTN SATs scores, right? Yes,

 

Stuart Siegel  08:11

that’s true. And including seven states are making it a mandatory requirement for students to complete the FAFSA before they graduate.

 

Lisa Marker Robbins  08:21

Oh, wow. Is there a way that we can get that? I did not know that. Is there a way?

 

Stuart Siegel  08:26

Louisiana Louisiana has one Illinois one Tennessee, maybe I can’t remember. Yeah, but I haven’t written down somewhere.

 

Lisa Marker Robbins  08:32

I’ll link it in the show notes. So families say hey, if I live in one of these seven states, my high schooler has to complete so that legally has to complete the FAFSA that’s mandated Yep, it’s mandated. Wow, okay. I did you think you’ll learn something every day? I remember a few years ago and I so everybody would have to fact check this but I had a student who was applying to Purdue and so for the general funds for merit money that they were distributing, the student would be considered without the FASFA. But for the engineering, hot of funds, they were requiring the FASFA. I mean, that’s a unique situation. And I haven’t encountered it a ton. But I want to talk about like, what are the common mistakes families are making, because to me, one of the mistakes is not doing your homework and knowing what you need, you know that that’s unique, but don’t just make an assumption that you know, the ins and outs and the rules of how the money gets awarded to your point. Parents are not great at knowing how this money is going to get awarded and what they qualify for. So, yeah, at all families make assumptions, families, consider or don’t fill it out, and they really should fill it out. What are some other common mistakes that you See when October one hits, so everybody, that’s when the fast was available when we dropped this episode, we’ll be right after that. What are some of the common mistakes that you are going to see families making come October or November when it comes to completing the FAFSA when applying for financial aid?

 

Stuart Siegel  10:17

Well, hopefully my clients won’t make those terrible mistakes. That’s right. And I’m going to illustrate an example of somebody who completed the FAFSA, this was last fall, and contacted me to help fix them, because they were absolutely floored. Gentlemen, file the FAFSA, his expected family contribution was $322,000. Yeah. And he says there’s no way that’s more than four years of college cost, right. So I, he said, Well, you helped me I said,

 

Lisa Marker Robbins  10:49

Oh, that was a one year number, right? That’s for one year. So your EFC everybody is like when you get that number, it’s like, this is what we looked at your situation we expect you to pay in one year. And so one year, his one year number exceeded what it really costs to send his kid to school for four years, pretty much yeah, dying. So he got

 

Stuart Siegel  11:12

you, he was very upset and very concerned, didn’t have that kind of money. I looked at his student aid report, that’s what was generated after he completes the FAFSA, that gives you your official EFC. And I could see all the data that he put in, I look at his tax papers, and income tax returns and and his assets. And I found that with some adjusting, we got his EFC down to $600. From 322,000. Now the cat was out of the bag with some of the schools his student listed. And because I went in there, and I corrected it, to get that $600, which qualified him for a Pell Grant and a state grant. Because the Father, He included assets that never should have been on that form, business assets, retirement assets, all these things that are excluded. And here’s my bigger point, people do not read the instructions carefully. And even if they do read them and think they understand them, they’re misinterpreting what’s really being asked. So they’ll just put down numbers that the school will not correct. And unless you know you made a mistake, the financial aid package you get the first year is going to be the package you live with pretty much even though you need to reapply, it’s gonna be the same package you have to live with each year.

 

Lisa Marker Robbins  12:40

Wow. So that you just completely changed and found mistakes. So this guy is saying, Oh, and don’t forget about this money over here that I have in this business asset over here puts it on the forum when they never belong there. That changed everything for his family. So read the directions. Don’t overestimate your knowledge in this area. It’s it’s tricky to make mistakes. I’ve heard of a mistake before where I haven’t had this experience, because I don’t really deal with the financial side of college planning as a college major and career coach specialists but where there’s a question in there that says something about like, How many children do you have? And is actually asking about the student? Does a student have any children? And sometimes parents are clipping right or wrong quickly? And they answer that question thinking, well, da, my kid doesn’t my kids 17 They don’t have children. And they put in the number that the parent has, which in our family’s case would be five total. And that changes everything to Yeah,

 

Stuart Siegel  13:47

putting in the wrong dependents, you could qualify you as an independent student. And that’s going to be a big red flag for a 17 year old, for example, unless they’re married, have children or working on a postgraduate degree, something like you’re not going to be independent, they’re not going to be independent. And that’s a whole other issue getting into you know, that status and you know, making a resident and out of state and all that. But the The interesting thing about put you know, entering your assets, is if you know what you’re doing, you get it right the first time. Now, in that example I just gave you I just wanted to half the schools accepted the change. The other half did not. Now fortunately, of the ones that did did one of the schools was his top choice. So we ended up getting quite a bit of money. But it could have gone any other way. Because it’s so interesting. Well, colleges don’t want you changing assets on the form. You can correct them, but it raises all kinds of flags.

 

Lisa Marker Robbins  14:40

So essentially, it was he went in and corrected and then you were really appealing to the financial aid office to reconsider based on the corrected form which and half of them accepted that appeal. And half of them did not.

 

Stuart Siegel  14:58

Yes, it was using the form is an appeal wasn’t like a direct your you talk right? Right, right, right. You want to do that?

 

Lisa Marker Robbins  15:04

Okay, I screwed it up. Can you look at this again? Yeah. And half of them said, No, we won’t look at it again.

 

Stuart Siegel  15:09

Right. But as it turned out, it was fun. So, but it’s hard to, you know, here’s here’s a common expression. It’s easy to beg forgiveness than it is that, gosh, I always screw this up.

 

Lisa Marker Robbins  15:23

No, no, no, I know what it is. It’s easier to ask forgiveness than it is to get permission. Right. So yeah, and I actually just stole that out of your guests admission notes. So I’m quoting you back to you.

 

Stuart Siegel  15:39

It’s early. Here

 

Lisa Marker Robbins  15:41

you go. So yeah, so it’s easier to ask forgiveness. So be careful. Don’t put too much in there, if that raises that red flag for them, and I asked like, oh, gosh, I’m so sorry. And yeah, I do have this. Now. I want to talk about something here. There’s a whole nother list of schools that also requires what is known as the CSS Profile. Can you give so you gave a great explanation about what the FASFA is? Can you explain what the CSS Profile is?

 

Stuart Siegel  16:12

Yes, the CSS Profile is unlike the FAFSA seeking to get a much deeper dive into your finances and your resources, specifically, whereas the FAFSA is just asking pretty much income and assets, which are, you know, on the surface pretty cut and dried. But when you’re talking about if you own a business, or if you have a farm or other real estate holdings, or partnerships, or you know, grandparents or other relatives, or some of the schools are asking very specific questions about trusts that you might or might not have, and they’re just, you know, what was your income last year? What’s it going to be next year? How is you know, whatever catastrophe of the moment is going to affect your in your situation? What are you paying on student loans for your other kids for yourself? What are your medical expenses, I mean, it just goes on and on and on. And you’re expected to know all that stuff. So when I say to somebody, well your FAFSA get soup to nuts gathering everything takes about 10 hours to do it right for for the average middle and upper middle class family takes about 10 hours to gathered on finish the process. With profile, you’re doubling that it’s a really long form. And it’s pretty scary to most parents. And not only that, here’s if you’re divorced, or separated, like so many families are have that situation now they’re gonna go after that non what we call the non custodial parent. Now, it’s called Parent number two. And not only them, but they’re also gonna go after if they’ve remarried that parent, so

 

Lisa Marker Robbins  17:42

they want to know it all like CSS profile, they want to know it all. But there’s so if you’re uncomfortable with the FASFA, just wanting to know your income and assets, get ready to have your mind blown by what the CSS Profile is going to ask. So who uses the CSS Profile? I know it’s a smaller group, but go ahead and explain to our listeners who that might be like who would? Well if not everybody’s gonna have to fill it out, right?

 

Stuart Siegel  18:09

No, no, they won’t. It’s the list is much shorter than you’ll see listed. Because a lot of our graduate programs are private scholarship bodies, which most people aren’t qualified for. So it really boils out about right now this year, about 200 schools, and they could be

 

Lisa Marker Robbins  18:26

3000 or so four year universities. Yeah,

 

Stuart Siegel  18:29

right. So 200, but they tend to be the more the schools, they’re the brand name schools, the Vanderbilts, the Harvard’s the browns, the case, westerns, the Northwestern University, San Francisco, you know, rice, whatever. I mean, it’s Georgia Institute of Technology, University of Virginia. School,

 

Lisa Marker Robbins  18:48

but there are some exceptions. I mean, there are some state publics on there.

 

Stuart Siegel  18:52

Yes, there are like UVA, for example. Yeah. So do you want to

 

Lisa Marker Robbins  18:56

Michigan, that’s who I was saying, living here in Cincinnati, I was thinking about Michigan, we got a lot of students that apply there. So don’t make the assumption that the facet is all you need. Like we’ll link in the show notes to where they can get from the CSS profiles administered by the College Board. So we will link over to that list for this year of what schools and I think it gets updated every year. So we’ll provide the link so they can make sure whether they do or don’t have to do the CSS Profile. So that one if you saw the type of mistake you just described on the FASFA, I would say that mistakes are a plenty on the profile and families are filling it out.

 

Stuart Siegel  19:37

Oh yeah. And correcting them is terrible. Because on the FAFSA, you can make certain corrections and some of the schools are likely to see it, but the profile, you’re going to make some corrections you have to notify each and every school which leads me to the biggest and most painful mistake a parent can make on either form. Yeah, Would you like to know what it is?

 

Lisa Marker Robbins  20:02

Totally, you got my attention now. Okay, this is the worst mistake

 

Stuart Siegel  20:05

in terms of pain and suffering. When a parent does financial planning or you know makes a move with their retirement, let’s say they do a rollover, they take a 401 K or an IRA, whatever it is they they do it. Now, most accountants or CPAs will indicate that on their tax return, there’s two lines for that for a and for b. Now, if it’s not there, even though they had a rollover, when they file the FAFSA, and they use the Internal Revenue Service DRT is going to pull over all that untaxed income out included, and untapped. No, it was rolled. Yes, because the IRS doesn’t care. The FAFSA doesn’t care unless you make a specific notification to FAFSA, and so many people miss it. Because it’s not on your tax return. A lot of people just don’t see it.

 

Lisa Marker Robbins  20:59

Let’s I want to go back for one sec, because you and I know what the DRT is DRT another acronym, this is the episode that has the most acronyms of all my episodes on the podcast yet, and you know what we’re gonna do for our listeners, we’re gonna put like a glossary of all of these. In the show notes listeners, if you’re hearing FASFA, see us as EFC. Co A now Dr. T, we’re gonna put them in the show notes for you. So you have a glossary when you’re thinking about financial aid. So Dr. T stands for and what does it do?

 

Stuart Siegel  21:32

Tr T stands for data retrieval tool. And it the full is Internal Revenue Service data retrieval tool. So when you file the FAFSA, the schools want you to log in via the FAFSA to the IRS and transfer your tax information because they don’t trust you. And they’re gonna run until what’s on your return. Now, as I was saying, if your accountant didn’t notate it on your return, and you’re copying your information from the return to the faster, you still have to enter all that information manually. Okay, it’s just going to be affirmed or contradicted by the actual return from the IRA official transcript. So last one, this

 

Lisa Marker Robbins  22:14

rollover case, because the data is just flowing from the IRS for how your you or your accountant filled out your your tax return, is just going to flow straight into the fields where it’s needed on the FASFA. And in this case, with a rollover retirement account is going to look like income instead of No, that’s still invested.

 

Stuart Siegel  22:38

And here’s the worst part. Here’s one of the worst parts of it, there’s several worst parts the worst, you’ll never know it, because it’s not listed on the summary or the actual printout of the Student Aid Report. It never shows. So let’s say you realize, oh my gosh, my EFC which would you know, I did some checking, it should be 50,000. Now, it’s 500,000. Well, what do I do about it? Well, you can’t make a correction on the FAFSA, there’s no place for it. You can’t call the Department of Education and tell them to change it. You can’t call them they won’t do it. You have to go to each and every school that information was submitted and provide documentation that that was the case, which had a headache, it is I won’t go in everything you have to bring up but you know, that’s how to do it. But it’s a lot of work. And if you’ve applied if you’re smart, you apply to 10 to 15 schools, because if you want to get a deal, you need to be able to negotiate and leverage federal awards. That’s a lot of schools to send information to.

 

Lisa Marker Robbins  23:34

So that’s a that’s a tip for our family. So when you’re looking at the college list and applying from a financial aid standpoint, you’re looking at it saying you really need 10 to 15 schools on that list so that you’ve got offers that come spring. And we know negotiating is a dirty word. So you’re appealing for more money. Yeah, not to us, right. The thing. I always say to the colleges, the word negotiations, the F word, you know, financial aid office. That’s right. When you’re negotiating come March, April, and you’re appealing for more money, you’re gonna need to lean into those other offers you have at the schools where maybe your first choice schools where you need some more money or want some more money to make it more affordable.

 

Stuart Siegel  24:25

Sure, you need to have comparable schools because you never know what you’re gonna get. every school is different in terms of how they award the students that are applying and also their own. They apply their own financial aid policies. So not all schools have the kind of money and other school might have it just yeah, you need to be able to like you go into a car dealership, and you have to have I have an Acura Honda. I have a Infiniti you know, I’ve got a word for the same kind of SUV basically. But you’re closer to me. What can you do? And then you play that game. Most people hate that. But subconsciously. This is one of the benefits of if parents Work with us is we give you the actual copy and text paste information

 

Lisa Marker Robbins  25:04

in easier ask, Oh, it’s not intimidating, I asked you on because I just know that you know this stuff inside and out. And I know you’ve seen the mistakes, you figured out how to prevent families from making mistakes on both the FAFSA and the CSS Profile. So tell us a little bit as we’re wrapping up here about financial aid now, and what your tool can do for families.

 

Stuart Siegel  25:30

Back in 2003, I was servicing professional college funders, financial advisors. And for my own practice, we just in the fasten profile went online. So we said, let’s put, let’s put it online. So I was, I’m happy, actually proud to say we were the first one to go online. So thank you. So I’ve been working with us for a very long time. And what we were able to come up with was a system that I could license to the professionals, we call it the fast, soft, easy file system. Well, if that’s if it well, right, but that’s a for the professionals. Yeah, a couple of years ago, I started working on the idea that, you know, because everybody’s charging a lot of money for this information. And I’ve got a quarter of a century of information, why don’t I take that version, that professional version, and make like a TurboTax version of that software, and provide me as a virtual resident financial aid guru, okay, I hear echo

 

Lisa Marker Robbins  26:28

or Oh, come on stoer.

 

Stuart Siegel  26:31

So people can get the benefit of our process, and to get the software to be able to manage everything electronically, and keep track of everything. In fact, we stay on top of you every step of the way. So if you don’t have a list on your school, by September 15, you’re gonna get an email and a text saying for me, so you don’t have that you better do that. If you didn’t get your federal student aid ID. So the apparent the student can sign the FAFSA, you’re going to hear about it from me, if you haven’t filed your FAFSA, by clicking the button you’re going to hear. So we keep up with everything. And we have office hours for one level of service. So every week, parents can ask us anything about their situation in private, in a group session, but nobody knows anybody. And I can tell you how to put your assets and income, depending what it is on the facet, or the profile, and how to answer these questions. And low BFC which will increase your eligibility for more need based or even scholarship funds. Especially awesome. For the for the affluent family, you know, because they, like I said they don’t know exactly what they’re gonna qualify for. But if here’s one big reason, it’s a great show of interest. Because filling out these forms the college’s know, this is a pain in the butt, especially the ones that take Yes. And no, it’s an it’s no small feat. So that’s a distinct, hey, we’re interested. And

 

Lisa Marker Robbins  27:55

if I’m gonna sit here and take all this time to complete these forms for you, then we are really demonstrating a high level of interest, just like I always say to students, an optional essay, you know, it’s not optional, you’re demonstrating your interest of being able being willing to write yet another essay, because that will demonstrate that you are all in you want to go here.

 

Stuart Siegel  28:18

Yeah, a lot of schools will just look at the kid, the student, and well, this kid’s never going to come here don’t admit them. You know, they don’t have enough information on they just figure well, you know, what’s the point. So it’s a good indicator. The other one is, some kids are, you know, colleges are a business. So they’re looking for really good customers. And when you fill out that form, if you’re affluent, and they say that you can afford it, well there’s they know your students in competition or be you know, is in competition with other schools. So they might throw $20,000 at it, just just get your attention. So they like to know who it is. And if there’s a cusp between one student in our student, one has a lot of need, and the other one doesn’t. Well, there’s schools that really care about that, and they’re just gonna give the nod to the one who has more money. It’s unfair. That’s not how the system was designed. But that’s the business decision

 

Lisa Marker Robbins  29:08

on their side, right? I mean, it really is what this is fantastic. I love how you the metaphor of like, it’s the TurboTax for financial aid, but it sounds like you really leveled it up because you’ve got, you know, office hours and resources to help with anybody’s encountering stuff. So it’s financial aid. now.com Correct. We’ll link to it in the show notes as well as that Glossary of acronyms. So, Stuart, thank you for coming on College and Career Clarity, you are a treasure to our families. So appreciate it.

 

Stuart Siegel  29:47

My pleasure. Absolutely.

 

Lisa Marker Robbins  29:51

I feel like we hit the jackpot with episode number 36 on How to Know If college is giving you their best price, which I’ll link to in the show notes. woods, and Stewart’s Excellent advice on filing for financial aid. For my weekly college bound challenge this week, it’s going to depend on how old your teen is. If you have a senior, I want you to head on over to student aid.gov To be sure you have your FSA ID for you, the parent and your student. Then gather your forms to file the FAFSA and perhaps the profile. If you decide that Yep, you’re going to apply for financial aid. Stewart is a trusted advisor to many, so don’t hesitate to check out the service he provides via the link in the show notes. If your student is younger than 12th grade, then I suggest you head to student aid.gov Anyway, to learn more about federal student aid while you’re building your college list, episode number 32 of the podcast with Dr. Abby Sussman, of the University of Chicago talks about building your college budget while you’re making your college list. And before you’re in the hot state of making a decision. I’ll link to that one too. If you have a suggestion for a future episode or a burning college question, send me an email at Lisa at flourish coaching co.com I’d love to hear from my listeners. If today’s episode was helpful to you. Please share it with a friend who needs us to sharing following the podcast rating and reviewing helps us resource more students to launch into a successful future. Thank you for listening to the College of prayer clarity podcast where I help your family move from overwhelmed confused to motivate a clear and confident about your teens future