This is an exciting time of the year for many high school seniors and their families. All the hard work has resulted in the upcoming high school graduation and final college decision. College here we come! Even though the finish line may be in sight, families still need to verify a few financial aid steps before the transition to college begins. Creating a list and checking off the final items will minimize the time and effort needed to correct any possible problems that may occur. The remaining financial aid details include turning on DRT in FAFSA, verification, confirming the financial aid award letter, final bill and how to pay according to your cash flow.
Turning on DRT
In March 2016, EFC PLUS had a blog article titled, “Linking the FAFSA and the DRT”. This article provides our readers with a detailed explanation of the IRS DATA Retrieval Tool or DRT. For those who have not read it yet, the DRT is the step in the financial aid process that links the FAFSA with your IRS tax return. This process provides the college’s financial aid office the financial information that validates your FAFSA submission with your IRS tax information. This is an important final step in the financial aid process.
For those who have filed their taxes, it takes two to six weeks after your taxes are filed before it is available through the IRS system. Many families are in this phase now due to the timing of their tax submission. The DRT is not available to anyone who has filed for an extension or has an amended return for 2015. If you are in this category, please call your college for instructions. If you are unable to use the DRT process, some additional work will be required to satisfy the college verification process.
Once the student has committed to the college, the school will normally contact the student to request that the DRT process be complete. This is part of the data verification process. This typically occurs during the month of May. Depending on the school, anywhere from 30 to 100 percent of the families will be verified by the college. This is why the DRT is so important. It turns on a flag for the college financial aid office showing that the information matches.
In addition to verification, schools are required to do some audits of their financial aid submissions. These audits could be selected due to possible issues on the FAFSA but many are random. You need to remember that this involves a government process Proper documentation must be submitted. The DRT process does help prevent fraud as it is a direct link to your taxes and makes verification easy for the families and the school.
Confirming the Award Letter
Normally in June, families will receive the final award letter based on the college verification process. At this time, families should review the award letter and confirm the parts of the award letter they want. The financial aid award letter will state the merit aid and the need aid awarded to the student. The need aid may include federal subsidized and unsubsidized loans, student work-study and parent plus loans. If for any reason, you have decided that your child does not want a specific part of the award letter then this is the opportunity to decline it. This is also when colleges may adjust the award if there was a change in your FAFSA information. This part of the process is for the college to organize the information to create a final bill.
Final Bill & Way to Pay
The final bill for college will arrive sometime in July. I am just mentioning this so that families can start thinking about their payment options. The final amount will include the direct cost of attendance. A detailed list of your items such as tuition and housing options will be listed. Scholarships and loans will then be credited to the account, showing you a final balance. Many colleges break it out by semester.
Families should check with your school about payment options and if they have any tuition installment plans. Some schools do allow up to 10 payments in a year while other colleges want one payment each semester. The bursar’s office would be the place to start your inquiries. The first payment is usually due in August so there is plenty of time to plan.
Maximizing your cash flow and determining your payment options should all be part of your college funding strategy. To understand your college cost, a family should take a four-year outlook on the process. Seeing how your EFC calculation may change over the four years may change your perspective on how you allocate your funds for college. In June, EFC PLUS will have a webinar on Way to Pay for College Tuition. Please click here and join us as we take the mystery out of the college process. Our EFC PLUS software also breaks down the tuition amount and allows families to get a four-year customized projection of tuition.
Ownership and Electronics Notifications
Colleges want your child to take responsibility for their college experience. This begins before college even starts, with communications being sent directly to your child. Now is a good time to talk to your child and make sure they know how important it is to pass this information on to you. Seems simple but as a parent of former college students it was something I needed to address. Such things as bills, course schedules, school updates go to the child’s school link. This means unexpected bills such as a library bill or a doctor bill may be on this site and you may not be aware of it. This is not a problem but one that new college bound parents may not be aware of.
Again, congratulations on all the hard work it has taken to reach this milestone. Good luck in this next phase of life. College Affordability LLC is always here if you have any questions!