Looking at a clock that begins ticking on January 1st, filing your FAFSA on a timely basis is one of the most important steps you can make in your college journey. Not only do many states have deadlines for state aid that are very stringent, colleges and universities are not working with an unlimited supply of money and most need-based funding is given out on a first-come, first-served basis until it’s gone.
What happens after you file your FAFSA though? Since virtually all schools have some kind of financial aid computer system to help manage their applications, things are going to happen in a fairly defined order. The purpose of this blog is to give you a working idea on what’s happening behind the scenes of a financial aid office, and why it’s happening that way.
Step 1—FAFSA is received: Most schools do not begin any processes until such time as you are accepted for Admission. Ensure you have given the Admission Office all requested items such as transcripts, ACT scores and essays (if required).
If you have been accepted for Admission, your FAFSA will be evaluated by the computer system to determine what other documents the financial aid office will need. Sometimes the Department of Education (DOE) will select a FAFSA for verification. This can be based on a number of mathematical reasons contained in the data you submitted, or simply a random selection. This requires the financial aid office to request various items such as IRS Transcripts (tax returns are no longer accepted), W2 Forms, Verification Forms, etc. If you are not selected for verification by the DOE, the school may still select you because of various policies and tolerances in place at your particular school. Schools are required to verify any conflicting information on your application.
In addition, if it’s discovered you’re a male and haven’t registered with Selective Service then you’ll have to go to the Selective Service website to either verify you are registered or register. If you’re an Eligible Non-Citizen and the numbers you provided on your FAFSA don’t match Department of Homeland Security (DHS) you’ll be asked to document your citizenship status.
Requests for IRS Transcripts can be waived if you (and your parent) simply go back into the FAFSA website and allow the IRS to transfer your tax data to the DOE. Once the data is transferred, you’ll likely no longer be required to submit IRS Transcripts. If for some reason you can’t transfer your data, you can go the IRS website and request transcripts that you can then submit to the school.
These requests for information are very commonly communicated to you by E-Mail, the school portal, or a combination of both. It’s your responsibility to monitor these communication tools. Some schools still communicate with freshman and Transfer students via the postal service, but even then after the first “paper communication” it’s likely all the rest will be done electronically.
If you’re not selected for verification by DOE or the school, very little “extra” paperwork will be required. It’s very important to clarify that being selected for verification doesn’t mean you’ve done anything wrong. Whenever any government agency or school is going to give you grant or scholarship assistance, they’re going to make sure it goes to the right recipient. Schools don’t like paperwork—schools are required by law to get what’s necessary to ensure the accuracy of the FAFSA data you submitted.
Step 2—FAFSA reviewed: Once you’ve completed the preliminary information requested by the financial aid office, your file will be reviewed to correct any errors (if applicable). You should not be surprised if after you’ve submitted everything you were initially asked for, that further information might be requested from you.
There are various reasons why the review can prompt further requests for information. One reason might be that the number of family members you reported in your household doesn’t match the number of exemptions on your federal tax data—this usually requires an explanation. Another reason might be that you’ll need to explain the value of a business or partnership. Yet another could be that there is evidence your family may have untaxed income that hasn’t been reported and that needs to be clarified. There are several other reasons why a second communication is needed—the school would like to request it all at once, but sometimes that’s not possible until the initial information is turned in for review.
Step 3—Your Financial Aid Award is processed: After your file has been reviewed and found to be accurate, the school will process your financial assistance awards. This process involved taking the various forms of aid you are eligible to receive and building a financial aid package. This package will normally consist of various grants, scholarships, loans and work-study dollars. I’ll cover the definitions of these forms of aid in another blog.
As with the document requests mentioned above, you will be informed of your award via electronic means such as E-Mail, school portal, or a combination of both. Again, as mentioned above, very often freshman and Transfer students will receive paper award letters—at least for the first time. With your award notification you’ll also likely receive other documents such as a “Federal Shopping Sheet” and very likely instructions for what you need to do next as it pertains to your awards.
If you have been offered federal loans or work-study awards, these need to be accepted before further processing can occur. This “acceptance” process will very likely be done on-line through the school portal, and you’ll have to physically check “Accept” or “Decline” for what’s been offered. Your schools computer system may also allow you to reduce the amount of loan or work you’re accepting. The important thing to remember is that anything with the word “loan” in it will need to be paid back after you graduate or cease being enrolled.
Step 4—You accept the loans and/or work you’ve been offered: Just when you thought the requests for information were done… As we all know, loans require paperwork. When a student accepts a Federal Direct loan or a Federal Perkins loan, a request will be generated via the school’s financial aid system for an Entrance Interview and a Master Promissory Note.
The Entrance Interview is generally an electronic process required of all first-time borrowers, although some schools require the student to do the entrance interview in person. If the school uses the Federal Direct Loan entrance interview process the student can complete both the Entrance Interview and Federal Direct Loan Master Promissory Note on the same website.
The Entrance Interview process informs the student of their rights and responsibilities under the Federal Direct Loan Program. At the end of the interview, the student must correctly answer a sequence of questions to help ensure that those rights and responsibilities are understood. The promissory note is the electronically signed document that signifies the student promises to repay the loan after graduation or ceasing to be enrolled at the school.
This process takes a minimal amount of time, and the good news is that normally, once it is completed, doesn’t have to be done year after year. The important part to remember is that until these steps are completed, the loan can’t be credited to the student’s account at the school. The school will receive electronic confirmation from the Federal Direct Loan Program that the entrance and promissory requirements have been met.
Step 4a—A parent accepts a Federal Direct Parent Loan (if offered): This process is very similar to the student process mentioned above. Prior to going to the website though, the school will request demographic information from the parent who is borrowing the loan. This information will be submitted to the Federal Direct Loan Program and a credit check is performed.
If the loan is approved, then the parent can go to the Federal Direct Loan website and complete the Master Promissory Note. If the PLUS loan is denied then the parent would have the choice of getting and endorser for the loan, or if not, it may be possible for the student to borrow additional Federal Direct Unsubsidized loan funds.
I hope this gives you some general insight as to what happens “after the FAFSA.” As I’ve alluded, this is very generic information and may vary from school to school. Always check with your individual school about their specific procedures.
I’d like to close with some very important tips that will help make your life easier as it pertains to the financial assistance process:
- The student (and parent) should monitor their electronic communications and read all communications from the school(s) where they’ve applied. If information has been requested, try to get it in as soon as possible so the process can move on.
- If the school offers the parent the option of having a proxy account (being able to view the student’s financial aid information) “encourage” the student to set this up so you can have access. These way things are much less likely to slip through the cracks.
- If you have questions, communicate with the school. Official there should be very happy to help with your questions.
- Allow some processing time for documents you submit to the school. In this electronic age, we sometimes get upset when we don’t get immediate feedback. The fact is though, after materials are mailed, go through the hands of the post office, are received and entered into the school’s computer system it is entirely possible and automatic request will be generated asking for the information again—it can’t really be helped.
Stay tuned for a future blog explaining the various financial assistance awards that a student might receive and how they should be viewed.