Ahh, the joys of October: the relief of cooler weather, the splendor of autumn colors, the aroma of pumpkin spice and the hair-pulling experience of filling out the FAFSA. Yes, for those of us with college-age or college-bound children, we get to add the completion of tedious financial forms to our list of fall activities.
Why do we do it? Do we have to do it? And is it worth it?
Simply put, financial aid is monetary support awarded to college students by the federal government, the state government or a college, itself, based on a student’s demonstrated financial need. So let’s look at the different types of aid available, the forms and formulas that determine that demonstrated need, and what else colleges do with the information we provide them.
The FAFSA
The FAFSA stands for Free Application for Federal Student Aid. So, by and large, when you fill it out, you are telling colleges whether or not you meet the threshold to qualify for federal government aid. The U.S. Department of Education offers such aid in the form of grants (the most common of which is the Pell Grant), work study (where a student takes a campus job and their earnings go straight to the college to pay for tuition or room and board) and loans. Typically, families have to make less than $60,000 per year to qualify for a Pell Grant, and the maximum you can receive is $6,195 per year. However, many colleges offer free tuition or at least partial tuition discounts to families at certain income levels. For instance, the University of Texas offers full tuition to students if their family income is less than $65K and partial assistance to families that earn up to $125K. In addition to federal aid and, in some cases, institutional aid, some students also qualify for state grants through the information they provide on the FAFSA.
The CSS Profile
If your child is applying to a private college, they likely have to submit a CSS Profile in addition to the FAFSA. Whereas the FAFSA is administered by the U.S. Department of Education, the CSS Profile is overseen by the College Board. Why fill out an additional form? Well, the colleges requiring the CSS Profile offer institutional aid (or their own money) to students, which can run from nothing to a full ride, depending on the family’s demonstrated need and the college’s ability to meet or exceed that need. For this reason, the CSS Profile captures a more thorough picture of a family’s financial situation.
How Aid Is Calculated
Both the FAFSA and CSS Profile employ formulas to determine a family’s Expected Family Contribution, or EFC. The EFC is then subtracted from the college’s Cost of Attendance (COA) to arrive at the family’s demonstrated need. The formulas used by both forms to calculate EFC are very similar, assessing a family’s income from the prior prior tax year (e.g., students entering college in 2021 provide their family’s 2019 earnings) at roughly 22-47%, depending on the family’s income bracket, and their assets at 5.64% (FAFSA) and three to six percent (CSS Profile). But, from there, the formulas diverge. The CSS Profile, for instance, takes home values into account when calculating assets, whereas the FAFSA only looks at savings and other liquid investments. The CSS Profile also collects information from both parents in the case of a divorce, whereas only the custodial parent fills out the FAFSA . On the other hand, the CSS Profile will take a closer look at expenses such as medical bills and private school tuition and adjust a family’s need accordingly. Both forms do take into consideration the number of household members in a family and offer discounts when there is more than one student in college. (Each student’s EFC is divided by the number of students in college on the FAFSA and multiplied by .6 on the CSS Profile).
Deciding Whether or Not To Apply For Aid
To be clear, application for financial aid is not a condition of admission to a university. Some families, after studying the financial aid formulas or estimating their aid through a college’s net price calculator (which, incidentally, is the best way to predict your financial aid award — google “net price calculator” followed by a college’s name to access one), conclude that they will not qualify and, therefore, opt not to apply. That is their prerogative. However, before you do this, be sure that a college’s merit aid– or scholarships based on a student’s merit and not their financial need– is not dependent on the filing of the FAFSA or CSS Profile. Another consideration is whether or not you will need to take out a loan to help pay for college. The Direct Loans offered by the Department of Education come with the lowest interest rates and most flexible terms available. Unsubsidized Direct Loans (up to $2,000 per year) are available to anyone who fills out the FAFSA, regardless of financial need. Another argument for applying for financial aid is the volatility and uncertainty of the economy. Should your financial situation change (job loss, medical emergency, etc.), a college with a financial aid form on file for you can review your situation through a process known as Professional Judgment and decide whether or not more aid is justified.
Application Deadlines and Accessing Forms
The deadline for applying for financial aid varies from college to college and can be dependent on whether or not your child applies early. Check each of their colleges for deadlines, and submit by the earliest. For access to both forms and help filling them out, see below.
FAFSA
FAFSA Help
CSS Profile
CSS Profile Help
