The Confusing Financial Aid Process- Verifying Taxes
The Financial Aid process is confusing especially when it comes to meeting deadlines and providing financial documents to verify tax information provided to colleges. Then add to this confusion, a typical high school senior is applying to an average of 6 to 10 different colleges for acceptance and financial aid – it increases the confusion exponentially!
Meet FAFSA/Financial Aid deadlines
All colleges require the FAFSA (Free Application for Federal Student Aid) to be completed in order to award Federal Financial Aid awards as well as many colleges use the FAFSA to offer individual college aid awards. Also, most if not all colleges require the FAFSA be submitted prior to the IRS Tax deadline which this year is April 17, 2012. Since most families do not file their taxes prior to the financial aid deadlines, they use “estimated federal tax” information in an effort to meet each of the respective colleges’ required FAFSA/ financial aid deadlines.
However, due to the fact that families use estimated federal tax information, many if not all of the colleges on their list require verification of the estimated federal tax information to finalize the family’s 2012-13 Financial Aid Awards. In 2012, there are not ONE but TWO options for families to “choose” from in order to verify federal tax information:
Option ONE
Go online, retrieve the already completed 2012-13 FAFSA and make corrections following the steps for the new IRS Retrieval Tool
Option TWO
Go online to order your 2011 tax return transcript
Adding to the confusion, each college typically recommends which Option works best for their respective financial aid process. In addition, there is a strong possibility that families will need to provide other information verifying different aspects of the household.
So, if a family’s federal taxes are completed at the IRS Tax deadline, there is very little time to verify tax information for the respective colleges and receive the final Financial Aid Awards package in time to meet the colleges’ “universal May 1st deposit deadline !“ This scenario is playing out in many households across the country creating more difficulties for families making an important financial decision regarding which college(s) through the financial aid process they can reasonably afford.
To summarize, many families do not file their personal federal income taxes early, thus delaying the financial aid process, the process of verifying tax information is different from college to college, thus delaying the final Financial Aid awards package, which results in families having very little time to make an important, informed decision about the true costs of in most cases an expensive college education.