ChooseFI | Financial Independence Podcast 154 | How to Hack the FAFSA for College Funding
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Nov 18, 2019 Financial aid experts Brian Eufinger and Seonwoo Lee share strategies for hacking the FAFSA to graduate debt-free. Topics include optimizing FAFSA for favorable outcomes, navigating financial aid in blended families, maximizing aid eligibility through smart financial decisions, analyzing 529 plans and state tax deductions, using HELOC for college funding, and early planning for college costs.
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How FAFSA, EFC, And Cost Of Attendance Work
- FAFSA produces an Expected Family Contribution (EFC) after you input family finances and that EFC is treated as the amount government expects the family to pay toward college cost of attendance.
- Cost of Attendance (COA) includes tuition, fees, room & board, books, and other charges, so the COA minus EFC equals the aid/loan gap families must fill.
Apply Only To Schools That Won't Gap Your Aid
- Check whether a school meets full need or practices gapping before applying because some schools reduce awarded need-based aid and force more loans on families.
- Prioritize applying to schools with large endowments or explicit policies that meet full demonstrated need to avoid surprise gaps.
Student Assets Hurt Aid Much More Than Parent Assets
- Student assets and income are penalized far more heavily than parental assets: student income is assessed at 50% and student assets at 20% on the FAFSA.
- Parental assets are assessed on a progressive scale and cap at ~5.64%, making account ownership a major lever for financial aid outcomes.