Financial Aid Application Time
As college application season is fully underway, it is important to learn about the primary financial aid applications and types of aid your student could receive. The two most common applications used by colleges across the US are the FAFSA and CSS PROFILE, and they need to be filed prior to each year the student plans on attending college. Both applications open on October 1, so prepare to get them started now.
As college application season is fully underway, it is important to learn about the primary financial aid applications and types of aid your student could receive. The two most common applications used by colleges across the US are the FAFSA and CSS PROFILE, and they need to be filed prior to each year the student plans on attending college. Both applications open on October 1, so prepare to get them started now.
The FAFSA (Free Application for Federal Student Aid) is the standard form used by all schools to determine the amount of federal aid a student will receive. The FAFSA calculates the EFC (Expected Family Contribution), what the government considers a reasonable amount the family should be able to contribute to the student's educational costs whether or not a parent wants to contribute to their child's education. For the 2021-22 school year, you will file using prior-prior (2019) tax information. To make things simpler, use the integrated IRS Data Retrieval Tool which will pull your tax information to automatically fill out a lot of the form for you.
The CSS Profile (College Scholarship Search Profile) is used by around 150 colleges, primarily private, to determine eligibility for non-federal funding aka institutional aid. It is filed through the College Board online. This application uses prior and prior-prior tax year information. So if you are applying for 2021-22, you will use 2019 and 2020 information. Not sure if your college uses the CSS Profile? Check out the list of schools here and check directly with the colleges.
It is important to know that the earlier you file the CSS Profile and FAFSA, the more funding you may receive as some grants are given on a first come, first serve basis. Also, each state and college has their own deadline for when you need to file, and these often fall around the time the college applications are due. Start early and aim to have your financial aid applications complete two weeks before your student's first admission application deadline. You can actually submit them before you finish your college applications. If you are about to make a large purchase or make any significant payments, you should make them before updating your bank balance information. Other than that, do not delay completing your financial aid applications.
The CSS Profile digs a little deeper into your family's financials than the FAFSA. Some key differences are that it includes home equity of primary dwelling, family farms, value of small businesses, and for some schools, the non-custodial and/or stepparent income and cash value of life insurance policies. Before you begin, it is helpful to gather the materials you will need to complete the applications:
An FSA ID to sign the FAFSA electronically (you can apply for this special username and password online via https://fsaid.ed.gov/npas/index.htm and the student and the custodial parent will need separate IDs. The student needs to get their ID first.)
A College Board account to complete a CSS Profile – the student and custodial parent will share the login, if a non-custodial parent needs to fill out a separate application, you will receive notification after adding your schools to the list
Social Security Numbers
Federal Income Tax Returns, W-2s, and other records of income earned
Bank statements and records of investments
Mortgage statement
Records of untaxed income such as child support and interest income
List of schools student is applying to
Ensure that the information you have entered is accurate and complete to prevent any delays in the processing of your application. Make sure you have added any schools to which you are applying to the FAFSA and CSS Profile applications so that they receive the information. Filing the FAFSA is free, but the CSS Profile costs $25 for the application and first school and $16 for any additional. If you need to add colleges to either application later, you can always log back in and do that.
If your family's financial situation has changed for the current year and the tax information you must use for the application does not properly reflect it, it is important that you contact each of the colleges and inform them of your current situation. Examples may include hurricane loss, death in the family, loss of job or illness. For any questions regarding each college's financial aid policy and types of aid awarded, take a look at their website and feel free to reach out to their office.
Thinking of skipping the financial aid applications? While the FAFSA is primarily used to determine federal funding, some schools also use it to determine the distribution of their own institutional aid if they do not require the CSS Profile. A few schools also use the forms to help determine Merit Aid. Even if you think you will not qualify for additional aid, if you want to get any of the federal loans you still need to complete the FAFSA. And if you skip applying for aid one year and need institutional aid from the school in the future, you may have trouble getting it.
ADDITIONAL INFORMATION
Not sure of which parent should complete the FAFSA? https://studentaid.gov/resources/fafsa-parent-text
FAFSA Tips https://studentaid.gov/apply-for-aid/fafsa/filling-out
CSS Profile Tips https://www.nerdwallet.com/article/loans/student-loans/css-profile
Deciphering Financial Aid Award Letters
As I receive copies of my students' award letters, I continue to be astonished by how complex and confusing these letters can be, especially for those not familiar with the financial aid jargon. It is disappointing that some schools continue to take advantage of the students and families by presenting their packages in very deceiving formats leading families to believe some colleges are more affordable than they actually are. An important part of the work I do with my families is helping them decipher these letters and make an informed college decision.
After coming back from a fantastic training with uAspire on award letter review, now is the perfect time to share some of what I learned or was reminded of. As I receive copies of my students' award letters, I continue to be astonished by how complex and confusing these letters can be, especially for those not familiar with the financial aid jargon. It is disappointing that some schools continue to take advantage of the students and families by presenting their packages in very deceiving formats leading families to believe some colleges are more affordable than they actually are. An important part of the work I do with my families is helping them decipher these letters and make an informed college decision.
Award letters arrive sometime after the student has been accepted and completed the financial aid information such as the FAFSA and/or CSS Profile. Each school has their own timeline for when they send out financial aid information and it can arrive any time up until the May 1 decision day. Although we still refer to it as a 'letter' it is now usually an email or web page the student can access within their college portal.
First off, it is crucial that you understand which types of expenses you will incur and what the different types of aid are. Total cost of attendance should be broken down into several categories such as tuition & fees, room & board, and books & transportation. The tuition & fees and room & board are Direct Costs which are paid directly to the college. The other expenses are Indirect and can vary significantly depending on which classes the student takes, what activities they participate in, where they purchase their materials, and how and when the student will be traveling between home and college. The Indirect Costs are more controllable by the student.
Financial aid can be broken down into two distinctive categories – Gift Aid which consists of grants & scholarships and Self-Help which consists of loans, family contribution, and work study. Unfortunately, colleges often bundle the Self-Help into their financial aid package which leads families to believe they will be paying less. However, the loans and work study are entirely on the student and family to take care of. It is important to know that a Direct Parent Loan also known as Federal Parent Plus Loan is something which is not guaranteed and often has borrowing terms less favorable to other loans such as the federal student loans, yet colleges almost always include it as part of their package. Work study is also not guaranteed and students have to find a qualified job on campus and work to earn that money.
So when reviewing your financial aid packages, be sure to calculate your true total cost of attendance by adding all direct and indirect expenses and subtracting grants and scholarships from that total. Do not include loans, work study, parent contribution or anything else listed on the award letter which will require payment from you. This final number will be the amount you will need to fund yourself whether it is via federal loans, private loans, work study, or finding additional scholarships. If you feel that the financial aid office made an error in calculating your aid, your financial situation has changed or another school has made a more competitive offer, you can always consider appealing.
Be sure to weigh your college and finance options carefully before making a final decision. If the letters are not clear to you, do not hesitate to call the financial aid office and ask for clarification. In the end, you may need to ask yourself some difficult questions such as if a certain school is worth that high final price tag or if you would prefer to save that extra money for attending grad school later. Make use of some of the free online calculators to get a better idea of what your monthly loan payments would be. Remember to look into the terms of each loan such as if it is subsidized or not, when the repayment begins, if repayment plans are income based, what the interest rates and loan fees are, and if payment can be deferred. Whatever you decide, ensure you are making a financially safe decision.
For a breakdown of some of the financial aid terms, check out my previous post here: https://www.acmcollegeconsulting.com/blog/2018/10/22/all-about-the-fafsa
If you still have not filed the FAFSA, do it NOW: https://studentaid.ed.gov/sa/fafsa
If your school has requested additional financial aid forms or verification, be sure to complete them as soon as possible to ensure you receive the highest amount of aid possible. Remember, some aid is given on a first come, first serve basis.