By Julie Fields
Sidney Mulkey was preparing to enter her junior year at the University of Georgia when she was informed about a problem with her financial aid.
She traced the problem to an error in her Federal Application for Free Student Aid, commonly known as FAFSA, and discovered the problem was likely due to an error on a tax return. She tried to contact the IRS, but soon realized the issue would take time to resolve.
Meanwhile, she had to come up with $3,000 a week before school started.
Mulkey experienced a situation that was unexpected, yet there were ways she could have better prepared herself, according to Lance Palmer, a University of Georgia professor of financial planning.
Palmer said she could have used a tax preparation service that would have reduced the chances of the tax error in the first place, she could have built more savings to provide a cushion for such a financial emergency and she could have established credit that would have given her access to a temporary loan to pay the unexpected tuition bill.
Mulkey raised the $3,000 in time for the first day of school, but had to rely on donations from family and friends.
“I was humbled by the situation and the people in my life,” Mulkey said of the donations.
Mulkey, a music education major who sings in an a cappella group on campus, said she received Georgia’s HOPE scholarship, federal Pell grants and another needs-based scholarship to help pay for her education.
Mulkey explained that when transferring data from old tax returns to her FAFSA, errors mistakenly inflated her income. Instead of reporting income of $164, she mistyped and reported that she made $16,400. Mulkey didn’t immediately grasp the implications her mistake would have on her financial aid.
“I just didn’t understand the extent of what was going on,” she said.
Palmer suggested a few ways students can be proactive in case such a situation arises. It helps to have a credit card so that they can build credit and take out a loan, he said. Another thing that students can do is to build up their savings. Money saved from summer jobs and part-time jobs during the school year can help in these situations, he added.
The sudden need for such a large amount of money surprised Mulkey, but she luckily raised it from friends and family.
“At first I was offering to work for it … I didn’t want it to be a handout … but honestly I got an amazing response from friends and family,” recalled Mulkey.
Mulkey said her middle school choir teacher donated half the amount.
Mulkey has still not resolved the data error between the tax return and her FAFSA filing and is taking Palmer’s advice to prepare in case it causes a financial aid problem again.
“If this does happen again next semester, I’m trying to prepare myself by saving up money, and since I do work, I’m trying to work to put that money back,” she said. “I’m trying to look around and see if my bank or another bank would be willing to give out some type of loan or some type of scholarship.”
Julie Fields is a journalism student at the University of Georgia’s Grady College of Journalism and Mass Communication.