FAFSA Strategies : The B-School Application - Page 5
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FAFSA Strategies

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Senior Manager
Status: schools I listed were for the evening programs, not FT
Joined: 16 Aug 2011
Posts: 389
Location: United States (VA)
GMAT 1: 640 Q47 V32
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GMAT 3: 660 Q43 V38
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WE: Research (Other)
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Kudos [?]: 46 [0], given: 50

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29 Jan 2012, 15:31
MikeBolton wrote:
Upon further deliberation and a conversation with someone about the issue, I actually think FAFSA will check your credit and see the large credit on a credit card if you did pay a large amount to a card ahead of time. So actually, point 2 might not be viable after all.

And I don't think FAFSA interprets your current income as what you'll have throughout the program, necessarily - especially since they ask how many people in your household and how many will be attending school (you answer "1" for both of these and it's fairly obvious there will be no additional income for FT students). Since you have to reapply to FAFSA each year, things will equalize because the second year you will report an income close to $0 and will have spent most (or all) of your savings on the first year. So my interpretation is the first year you apply, FAFSA expects you to pretty much use all your savings (60% in your case), but the second year, you should be eligible for much more money (though after you max out the Stafford$20,500 it will have to come from Grad PLUS or private loans). Any members on the site that have finished an MBA and can comment on this thought?

FAFSA doesn't check your credit. It only creates your EFC based on last year's tax return which is 2011. So if you made 100K last year, your EFC for the 1st year of business school will reflect on your 2011 salary which is 100K. It will hurt you for need based aid, assuming you're in a full time program which most of us here are. I learned this the hard way freshman year in college when my dad got a big bonus at work before christmas during 12th grade.

The only credit check is for GradPLUS and it will basically make sure you don't have any of these:

1. Any debt that is 90 days late or more.
2. Any bankruptcy in the last 5 years (discharged or not)
3. Any debt that has not been paid and written off or put in collections in the last five years.

No FICO scores, are used for GradPLUS checking.
Senior Manager
Joined: 20 Jun 2010
Posts: 488
Concentration: Strategy, Economics
Schools: Chicago (Booth) - Class of 2014
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13 Feb 2012, 06:02
MikeBolton wrote:
And I don't think FAFSA interprets your current income as what you'll have throughout the program, necessarily - especially since they ask how many people in your household and how many will be attending school (you answer "1" for both of these and it's fairly obvious there will be no additional income for FT students). Since you have to reapply to FAFSA each year, things will equalize because the second year you will report an income close to $0 and will have spent most (or all) of your savings on the first year. So my interpretation is the first year you apply, FAFSA expects you to pretty much use all your savings (60% in your case), but the second year, you should be eligible for much more money (though after you max out the Stafford$20,500 it will have to come from Grad PLUS or private loans). Any members on the site that have finished an MBA and can comment on this thought?

I asked Booth's Financial Aid Director about FAFSA and the EFC this weekend. She said to ignore the EFC amount because it's irrelevant for graduate programs. Your EFC will not affect your ability to barrow the maximum amount.
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Senior Manager
Status: schools I listed were for the evening programs, not FT
Joined: 16 Aug 2011
Posts: 389
Location: United States (VA)
GMAT 1: 640 Q47 V32
GMAT 2: 640 Q43 V34
GMAT 3: 660 Q43 V38
GPA: 3.1
WE: Research (Other)
Followers: 3

Kudos [?]: 46 [0], given: 50

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13 Feb 2012, 09:44
MDF wrote:

I asked Booth's Financial Aid Director about FAFSA and the EFC this weekend. She said to ignore the EFC amount because it's irrelevant for graduate programs. Your EFC will not affect your ability to barrow the maximum amount.

Pretty much. It's a little different than college, where student's parents (most students are dependent) are expected to pay that EFC no matter what, and the PLUS loan for parents seems to be a loan where the parents have to pay it right away if I'm not mistaken.
Intern
Joined: 28 Feb 2013
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28 Feb 2013, 07:37
Hi all,

I didn't see any recent FAFSA discussion and wanted to ask a couple questions for those who may know:

1) Are MBA students receiving any grants through FAFSA (not just loans)?
2) For those of us who saved money and have it in cash, is it legal to transfer it elsewhere before submitting the form? I understand it's an ethical "grey area," but really not any different than using cash to pay off a mortgage or spending the money.

Thanks!
Director
Joined: 26 May 2010
Posts: 719
Location: United States (MA)
Concentration: Strategy
Schools: MIT Sloan - Class of 2015
WE: Consulting (Mutual Funds and Brokerage)
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01 Mar 2013, 13:51
maplesyrups wrote:
mbaconsultinghopeful wrote:
Hi all,

I didn't see any recent FAFSA discussion and wanted to ask a couple questions for those who may know:

1) Are MBA students receiving any grants through FAFSA (not just loans)?
2) For those of us who saved money and have it in cash, is it legal to transfer it elsewhere before submitting the form? I understand it's an ethical "grey area," but really not any different than using cash to pay off a mortgage or spending the money.

Thanks!

Hi,

1. Federal grants are only applicable to undergrad students (such as pell seog), unfortunately grad students will only qualify for unsubsidized loans (6.8% fixed interest rate) and, if you can pass the credit check, PLUS loan(7.9% fixed interest rate).
2. None of the grad loans are need based so there is no need to transfer your money around. Sub loans were eliminated for grad students in 2012. The only possible factor may be in institutional scholarships, but that would vary by school.

Within the last three weeks or so, I spoke to financial aid officers at both Sloan and Haas and both echoed what maplesyrups mentioned above.
Manager
Joined: 27 Jul 2007
Posts: 51
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Concentration: Finance, Entrepreneurship
GPA: 2.42
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05 Mar 2013, 16:07
I have a burning question! I'm trying to figure out if I can get funds to pay for things like flights and different treks and other expenses, but after speaking with a FInancial Aid advisor at Maryland she said that the funds would only cover room board + tuition+books. I would like to know if that's true???
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Intern
Joined: 12 Oct 2012
Posts: 11
Location: United States
Concentration: Strategy, Social Entrepreneurship
Schools: Merage '15 (M)
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06 Mar 2013, 21:05
TRISTLW wrote:
I have a burning question! I'm trying to figure out if I can get funds to pay for things like flights and different treks and other expenses, but after speaking with a FInancial Aid advisor at Maryland she said that the funds would only cover room board + tuition+books. I would like to know if that's true???

You can borrow up to your school's calculated Cost of Attendance (COA), which can be found on the Financial Aid website. Of course if you end up finding rent that's cheaper than the average calculated COA, you can use the funds to pay for whatever else you need for living expenses.
Current Student
Joined: 04 Oct 2011
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07 Mar 2013, 10:00
maplesyrups wrote:
TRISTLW wrote:
I have a burning question! I'm trying to figure out if I can get funds to pay for things like flights and different treks and other expenses, but after speaking with a FInancial Aid advisor at Maryland she said that the funds would only cover room board + tuition+books. I would like to know if that's true???

You can borrow up to your school's calculated Cost of Attendance (COA), which can be found on the Financial Aid website. Of course if you end up finding rent that's cheaper than the average calculated COA, you can use the funds to pay for whatever else you need for living expenses.

In all likelihood though this is doubtful. Most schools estimated budgets are low already before you even add travel expenses in. Talking to friends in school and running the numbers myself for realistic expenses most schools underestimate by at least 10% how much it will really cost to attend school. This means you will not be able to borrow enough money to fund additional items like travel.

The exception to this is school related travel. Some schools offer international trips are part of a class. You spend a month or a few weeks in a foreign country doing work for an actual course. In this case you can ask the school to account for this course required travel in your budget and they will raise it a few thousand. However I don't think you can do that, drop the class and then spend the loan on personal travel. So this is an unusual exception.
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Joined: 01 Aug 2012
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25 Apr 2013, 14:27
Hi All,

I am not seeing anything addressing a particular problem I am having with the student loan process so I am hoping someone on this thread may have some knowledge. My tuition and mandatory fees are going to be covered by my parents but I will need to take out loans the cover the rest. Most of the student loans I am seeing disburse to the school you are attending and then the office of financial aid hands over the amount of money that remains after tuition fees etc have been deducted. Having spoken with a Columbia Business School Financial Aid Officer briefly they indicated that they are obligated to subtract the tuition first and then disburse the loans even if the tuition has already been paid.

For tax reasons my parents have to pay the school tuition directly or else the money given to me or paid off on my loan is subject to a gift tax on them or income tax for me. Has anyone else had this type of situation and if so what was the solution? Were you able to get a private lender to disburse a student loan directly to you or work something out with the financial aid office at your school?

Thanks!
Senior Manager
Joined: 17 Mar 2011
Posts: 452
Location: United States (DC)
Concentration: General Management, Technology
GMAT 1: 760 Q49 V45
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WE: Information Technology (Consulting)
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30 Apr 2013, 09:52
lilmisskate86 wrote:
Hi All,

I am not seeing anything addressing a particular problem I am having with the student loan process so I am hoping someone on this thread may have some knowledge. My tuition and mandatory fees are going to be covered by my parents but I will need to take out loans the cover the rest. Most of the student loans I am seeing disburse to the school you are attending and then the office of financial aid hands over the amount of money that remains after tuition fees etc have been deducted. Having spoken with a Columbia Business School Financial Aid Officer briefly they indicated that they are obligated to subtract the tuition first and then disburse the loans even if the tuition has already been paid.

For tax reasons my parents have to pay the school tuition directly or else the money given to me or paid off on my loan is subject to a gift tax on them or income tax for me. Has anyone else had this type of situation and if so what was the solution? Were you able to get a private lender to disburse a student loan directly to you or work something out with the financial aid office at your school?

Thanks!

That's an interesting predicament. I'm sure you can work it out with the school such that they can cash your parents check before applying the loan - just reach out to them and see what they say.
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Joined: 18 Dec 2013
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09 Jan 2014, 16:43
MDF wrote:
MikeBolton wrote:
And I don't think FAFSA interprets your current income as what you'll have throughout the program, necessarily - especially since they ask how many people in your household and how many will be attending school (you answer "1" for both of these and it's fairly obvious there will be no additional income for FT students). Since you have to reapply to FAFSA each year, things will equalize because the second year you will report an income close to $0 and will have spent most (or all) of your savings on the first year. So my interpretation is the first year you apply, FAFSA expects you to pretty much use all your savings (60% in your case), but the second year, you should be eligible for much more money (though after you max out the Stafford$20,500 it will have to come from Grad PLUS or private loans). Any members on the site that have finished an MBA and can comment on this thought?

I asked Booth's Financial Aid Director about FAFSA and the EFC this weekend. She said to ignore the EFC amount because it's irrelevant for graduate programs. Your EFC will not affect your ability to barrow the maximum amount.

Question about EFC. I understand that subsidized loans are no longer available for grad students. However, can schools put together favorable financial packages based off of the EFC amount disclosed on the FASFA report? In other words, would it still be worth it to try to reduce EFC (through Roth contributions, other ways) in the hope that schools will offer favorable financial aid?

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27 Feb 2015, 12:02
Quick FAFSA question: Do I need to fill one out before getting my application decision, and send it to the schools that I have applied to? Or do I wait until I get in and then send in any financial aid documents?

I keep thinking this process must be similar to undergrad applications, but from this thread it looks like it's really different... no need based aid?!

Thank you!!
Re: FAFSA Strategies   [#permalink] 27 Feb 2015, 12:02

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