How You Can Use the FAFSA4caster Tool to Predict Your Financial Aid

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If you belong to the 85 percent of students who will receive financial aid for college, you should be using the FAFSA4caster.

This free tool from Federal Student Aid estimates your federal financial aid award before you even submit the FAFSA.

With this estimate, you can compare your cost of attendance at multiple colleges. Plus, you can take steps to maximize the amount of aid you receive.

Let’s take a closer look at how this FAFSA estimator works as you figure out how to pay for college.

FAFSA4caster estimates your financial aid award

For many of us, financial aid is a big factor when deciding where to go to school. In fact, over 19.8 million students applied for federal financial assistance for the 2015-2016 school year, reported the National Association of Student Financial Aid Administrators (NASFAA).

Unfortunately, you don’t get to see your financial aid award until months after you apply — but that’s where the FAFSA4caster tool comes in handy.

“The FAFSA4caster tool is a great resource for college-bound students and their families,” said financial expert Amy Mahon of Reich Asset Management.

“Prior to filing the FAFSA and in advance of their college search, they should use the tool to estimate their Expected Family Contribution (EFC),” she added. “This will give them an idea of what they are expected to pay toward college based on their income and assets.”

Your EFC is the amount your family is expected to pay for college. If your EFC is lower than the cost of tuition, you could qualify for federal financial aid to fill in the gap. Plus, you could get other aid in the form of scholarships or college grants.

Once the FAFSA4caster reveals your potential EFC, you’ll have a sense of how much you’ll need to pay out of pocket. If your EFC is higher than you think your family can handle, you might reconsider applying to expensive schools. By comparing the cost of attendance at various colleges, you can make a more informed choice about where to apply.

How to use the FAFSA4caster tool

The FAFSA4caster tool is like an extremely slimmed down version of the FAFSA. You won’t have to go into detail about tax information, but you do need to enter your or your parents’ gross income from the previous year. You’ll also enter the worth of your assets, if applicable.

After collecting this information, you can estimate your financial aid in three steps.

Step 1: Indicate your citizenship

You need to be a U.S. citizen or eligible noncitizen to qualify for federal aid.

Step 2: Enter basic information about yourself and your parents

Next, you’ll enter data about yourself and your parents. This includes your date of birth, marital status, and family size. You’ll also say how much income you and your parents earned last year, as well as the worth of any assets your family might have.

Step 3: Review your financial aid estimate

Once you enter the required information, the FAFSA4caster will immediately predict your financial aid eligibility. It will indicate your eligibility for the following:

  • Direct Subsidized Loan
  • Direct Unsubsidized Loan
  • Federal Pell Grant
  • Federal Work-Study

For Direct Loans and Pell Grants, the tool will show the maximum amount you’re eligible for. But for work-study, you’ll just get an average, as in the example below. You won’t know the exact amount until you get your financial aid award letter.

Not only does this final page predict your financial aid, but it also works as an interactive calculator. You can enter the cost of a college you like and subtract your predicted financial aid from it. Plus, you can enter different values for state aid or scholarships if you’ve already earned some money for college.

By playing around with these calculations, you can compare your estimated net cost of attendance at various colleges. Instead of being in the dark about how much a college will cost, you’ll have a clearer sense of your tuition bill.

FAFSA4caster helps you make smart financial choices

The FAFSA4caster doesn’t just help you pick colleges based on affordability. You can also use the tool to get the most financial aid possible.

“[Families] can use this information to estimate potential aid from schools and also analyze if there are any ways — legally, of course — to reduce their EFC,” advised Mahon. “For example, clients can try to reduce their investment and checking/savings balances (assessed assets) if possible by paying bills ahead of time before the Oct. 1 FAFSA start date.”

In other words, it’s possible to restructure your assets to lower your EFC. If you have a complicated financial situation, Mahon suggested consulting with a personal financial advisor.

By investigating your EFC with this FAFSA estimator, you can make smart financial moves that could maximize your eligibility for financial aid.

Everyone should submit the FAFSA

Even if the FAFSA4caster says you’re not eligible for aid, you should still submit the FAFSA. According to Federal Student Aid, some students mistakenly think they’re not eligible for financial aid and miss out on assistance because they never filed the application.

Even if you’re not eligible now, filing the FAFSA is a safeguard in case your financial circumstances change in the future. Plus, many colleges look at the FAFSA to determine their own scholarships and non-need based aid.

To get the most aid possible, make sure to file the FAFSA as soon as possible; it opens on Oct. 1 every year. In the meantime, don’t forget to seek out scholarship opportunities to lower the cost of college overall.

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1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

(1)All rates shown include the auto-pay discount.  The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 11/4/2019. Variable interest rates may increase after consummation.


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Discover Disclosures

  1. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
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  3. Aggregate loan limits apply.
  4. Lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest interest rate offered on the Discover Undergraduate Loan and highest interest rates offered on Discover student loans, including Undergraduate, Graduate, Health Professions, Law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.250%% as of October 1, 2019. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please visit discover.com/student-loans/interest-rates for more information about interest rates.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

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Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).

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5 Important Disclosures for Citizens.

Citizens Disclosures

Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2019, the one-month LIBOR rate is 1.70%. Variable interest rates range from 2.80% – 11.06% (2.80% – 10.91% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Big Money Decisions, Student Loans

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