Speaker 1: Here are 5 FAFSA tips that can lower your EFC, or Expected Family Contribution. Hi everyone, I'm Tina Steele, the FAFSA Guru, and if you like what I have to say, be sure to subscribe to my channel by clicking the link below. Families are always looking for ways to reduce their expected family contribution so that they can get more financial aid. On average, families are expected to pay 30% or more of their annual income on their child's college education for just one year. And then, the more assets a family owns, the more that EFC goes up, which means less financial aid for the student. So here are some tips that can actually help you reduce that expected family contribution so you can get some more financial aid. Tip number 1. If you have a big chunk of money sitting in your bank account, consider paying down your mortgage, or putting some of that in your retirement accounts. The reason I say that is because those are two assets that are protected that you do not have to report on your FAFSA. The primary value of the home you live in, and the value of your retirement accounts, do not need to be reported. However, you do have to report the total money you have in your checkings and savings accounts, along with any cash on hand. And then, the government will expect that you can contribute 5.65% of that total asset after your asset protection allowance towards your child's education for the year. So if you have $100,000 sitting in your bank account, that could easily inflate your expected family contribution by $5,000 to $6,000. Now, keep in mind, when you contribute money to your retirement accounts, that does count as untaxed income on your FAFSA form, but it's still better to have your money invested in retirement, or the primary home you live in when it comes to the FAFSA, versus sitting in your bank account. Tip number two, if you're divorced or separated, be sure you're filling out the FAFSA with only your information. I see so many families make this mistake. So if you're the parent of a dependent student, and you're currently divorced or separated, only one parent needs to fill out the FAFSA on behalf of the student. This would be the parent with whom the child resided with most within the last year. And if the parent shared custody 50-50, then the parent who provided more than half of that child's support this last year should be the one filling out the FAFSA form. If you're an independent student going to college yourself, then of course, you're only going to report your income information on the FAFSA. Now, being separated doesn't mean that it has to be a legal separation. You just need to be separated and living in different households. If that applies to you, then only one of you need to fill out the FAFSA form. One common mistake I see related to this is when parents or a couple file a joint tax return for the last year, which is the year they used to fill out the FAFSA form. They automatically assume that they have to import the taxes into the FAFSA, which would include their and their spouse's income information. But that's not the case. If you filed a joint tax return for the year that you put on your FAFSA form, it's very important that you do not use the IRS data retrieval tool when completing the FAFSA. You want to manually input all of your income information on the form and separate your income out and not include your spouse's. This can make a huge difference when it comes to the EFC. And if you are divorced or separated and you did fill the FAFSA out already and you did include both of your income information, it's very important that you contact the financial aid office and let them know. They could make these changes to your FAFSA form and then recalculate your EFC, which could result in more financial aid for you. Tip number three. If this year's income for you or your family is going to be less than last year's income that you reported on the FAFSA form, it's crucial that you notify the financial aid office of every college that you're applying to. There's no way to put this information on the FAFSA form. The current 23-24 FAFSA that recently opened up requires 2021 income information. So there's a lot of families in situations where their 22 income is going to be a lot less for one reason or another. There's no way to fix the FAFSA and relay this. Instead, what you need to do is reach out to the financial aid office of every college that you applied to and notify them about this change. They will then send you what's called a special circumstances form and ask you to project what your 22 income is going to be. They can then use that income in place of the 21 income that you submitted on your FAFSA form and recalculate your EFC. This could be really significant in terms of more financial aid being offered to you, especially if the loss of income was thousands of dollars. Tip number four. Did you have a one-time source of income in the prior year that you used to fill out your FAFSA form that you will not see again? For example, in 2021, did you take out any money from your retirement account to help you live or did you receive a capital gain or dividends from the sale of stocks or a property or something like that? This type of one-time income could inflate your adjusted gross income and not provide a very accurate picture of what your regular household income is. This is another example of where it would be really important for you to reach out to the financial aid offices of all the colleges you've applied to, to let them know that your 2021 income was inflated due to whatever inflated it. Again, they will likely send you a special circumstances form and ask you to report this information and then they can take that money out of the equation and recalculate your EFC, which can help you get additional financial aid. Lastly, tip number five. Did you have any significant medical or dental expenses or major household repairs in 2021 or this year, 2022, or will you in 2023? A lot of times families have to pay out of pocket for medical and dental expenses, along with household repairs that need doing. Those expenses can add up. It's important to notify the financial aid offices about this if it applies to you so that they can take that into consideration and recalculate your expected family contribution. There are a lot of situations that it can apply to families that the FAFSA does not accurately reflect because it's asking for only one year's income information. The lower your expected family contribution, the higher your financial aid offer. You want to do everything in your power you can to reduce that EFC to help you really maximize those financial aid offers. Then once you do that, after you receive all of your financial aid offers, make sure you file a financial aid appeal. 80% of students who appeal their financial aid offers will receive additional financial aid and you don't necessarily have to have special circumstances to appeal your financial aid, but that's a whole other video you can find on my YouTube channel. So there you have it, five FAFSA tips that can help you reduce your expected family contribution or EFC, which will help you get more financial aid. And to learn more about the programs and services I provide, be sure to visit my website, thefafsaguru.com. I offer a free initial 10-minute consult call for anybody that I've never worked with before that you can schedule directly through my website. In addition to my programs and services, I provide one-on-one consultations to help families with whatever they might need assistance with, whether it's filling out financial aid forms, better understanding the financial aid process, appealing financial aid offers, figuring out the best loan, you name it. If it's financial aid related, I can help you with it. I hope that helped. Thanks so much for watching.