The process to apply for financial aid involves at minimum – filing a FAFSA and for most private colleges, a secondary form – a CSS Profile. FAFSA is a federal and free form and the CSS Profile is sponsored by the College Board and there’s a cost to submit that form. The CSS Profile also requires separate forms for both the custodial and non-custodial parents for divorced/separated parents.
– YES YOU CAN AFFORD COLLEGE!
First, let’s get a rough idea of your eligibility for financial aid.
If you haven’t already done so – there’s an estimating tool at the link below for the
FAFSA4CASTER– showing you what you can be expected to contribute towards the cost of education based on hypothetical levels of income and assets. This is a non-binding unofficial tool- you should have no fears of experimenting here.
If The FAFSA4CASTER indicates your Estimated Financial Contribution (EFC) estimates are above $60k – there is little if any aid to be received as the cost of attendance exceeds all public universities and is close to the cost of most private universities at 65 to 75k. Any assistance will go to families with more perceived need.
*** You do NOT receive money from FAFSA. This common misconception needs to be addressed straight away. The FAFSA is a federal form – linked to your IRS account. When you complete the form, your student aid report (SAR) will generate your estimated family contribution(EFC) . Colleges use that number as a guide to determining the package you receive. Some families are eligible for federal funds– Pell grants– these are no
Again, here’s the link algorithm is explained in detailed in this lengthy government publication here:
Rough guide- families at $150k in W-2 Earnings EFC $35k (unbelievable but true – see link above on the algorithm of the EFC calculation and more details follow- hang on – this is a lot to absorb.). It’s important to understand how your aid is calculated so you can engage in proper college planning.
It’s also important to avoid scamsters on social media offering to help you reduce your EFC by shady and illegal practices– I cringe every time this information crosses my FB newsfeed and wish I could send up a warning flag. There is no magic – and you shouldn’t pay anyone to help you file a free form or mess with your data- because the form is straightforward for most people. The form you file will link to an IRS data retrieval tool.
*** Any complex and unusual situations aren’t handled on the form but in direct communications with college admissions officers AFTER you are accepted and receive your award letter. That’s where I can guide you best to negotiating your aid package. Your FAFSA leaves little room for changing any variables within your control. Any service that advertises otherwise could get you into a ton of trouble.
IT’S ALSO IMPORTANT TO UNDERSTAND THAT WHILE THE FAFSA IS A FEDERAL FORM – ESSENTIAL TO RECEIVING ANY FEDERAL AID YOU MIGHT BE ENTITLED TO (I.E. PELL GRANTS OR SUBSIDIZED STUDENT LOANS), THE PRIMARY REASON YOU’VE FILED THIS FORM IS TO GENERATE AN EFC .
THAT VALUE IS USED BY COLLEGES TO DETERMINE WHAT IF ANY AID PACKAGE TO AWARD. IT’S THEIR MONEY AND HOW THEY DECIDE TO PROVIDE AID HAS NOTHING TO DO WITH THE GOVERNMENT.
LAST FALL, SOME ANGRY PERSON CALLED ME CLAIMING “I PAY A TON IN TAXES” AND SOMEHOW FELT ENTITLED TO ASK ME HOW HE COULD HIDE HIS MONEY AND RECEIVE MORE AID FROM FAFSA. FAFSA DOESN’T AWARD ANYTHING – IT’S JUST A FORM – A FORM USED TO GUIDE COLLEGES IN DETERMINING WHETHER TO GIVE YOUR STUDENT ANY MONEY THAT ALUMNI AND PRIVATE INVESTORS HAVE DONATED FOR THIS PURPOSE.
This is why it’s so important to know how much you can be expected to contribute as you get ready to determine your balanced list of colleges.
FAFSA has a “link/retrive to IRS” process- making this a fairly straightforward form for you to complete. For Seniors ’22–, the link is to your 2020 Federal 1040. If 2021 was a difficult year — we have a process to providing that information to colleges. Other data you’ll need to have on hand include the amount of money in savings, checking, college (529 or state pre-pay) , & retirement funds for both the custodial parent and student. If you have any “complex” issues that don’t fit the questions or windfalls from house sale, one time bonus, inheritance, or other oddities- let’s talk before you enter large numbers that affect your EFC
— Unusual — that means- income going up or down widely from 2020 to 2021 – job loss, windfall gains/losses, With the pandemic, it’s very likely your family had a reduction in income or business revenues, potentially experienced high medical expenses, separation/divorce -all of this – including supporting family abroad in troubled communities- please let’s talk.
RULE OF THUMB_ divorced or separated families – the lower earning parent (and that includes the income of the remarried spouse) should be listed as the custodial parent. If necessary – update and amend the 2020 tax form and school address to align. The gains to financial aid are significant and outweigh the puny tax deduction of one child. I can walk both parents through this discussion and maintain your privacy from your ex-spouse on financials.
Please check each college’s website to determine if you also need to file a CSS Profile. These are required at most but not all private colleges and few if any public universities.
There are some “tricky” questions you’ll feel are rather personal – and the best way to get over it to be assured the information is confidential. But mostly- if you want financial aid from a private university – you must play by their rules– meaning you must answer all the questions honestly on both the FAFSA and CSS Profile.
HOW IS YOUR FINANCIAL AID AWARD LETTER DETERMINED? UNDERSTANDING FAFSA -CSS PROFILE ?
As noted, to receive financial aid, you must submit a FAFSA. FAFSA is just a form – you don’t receive money from FAFSA. It’s a form that determines how much your family is expected to contribute to the cost of your education- the link to that algorithm is below- and includes a number of things- primarily your family income as reflected on the tax return and your assets. That form will link to your IRS return – so any ads or emails you see from “scamsters” offering to help you with your FAFSA and shield assets is something to ignore..
Please don’t become that misguided gentleman I referenced earlier in this newsletter– there’s no large pot of federal aid awaiting you to cover the cost of an education. There are Pell grants for lower income families — but the primary reason you’re completely a federal form is to guide private colleges in determining your “financial need” and then it’s up to each college whether to award you grants -that likelihood is based on the desirability of the student – a college might see you as needing assistance and award a parental plus loan rather than a grant. It’s their money and they can decide how to allocate and which students are of interest. This is why early college planning matters- because it allows the student to develop clear academic interests and nurture those interests both within and outside the classroom.
Parents if you want a task – please start the process of maintaining a list of all colleges where you’ll track BOTH THE FAFSA and CSS PROFILE DUE DATEs for PROSPECTIVE STUDENTS (these are DIFFERENT FROM CURRENT STUDENTS.)
HOW IS MY FINANCIAL AID PACKAGE DETERMINED:??
As noted, College Admissions is “need-blind”. There is no adverse impact on admissions if you apply for financial aid. Likewise, you don’t increase your chances of admission being a full-pay student.
Need Based Aid – Financial aid is awarded directly from the college based on your demonstrated financial need as determined by your FAFSA Estimated Family Contribution (EFC).
