CHANGE, CHANGE, CHANGE! This year, the changes to the college financial aid process are numerous. October 1 has always been the first day any U.S. citizen or eligible non-citizen expecting to apply for need-based financial aid can access, complete, and submit the necessary forms. The most common of these forms is the Free Application for Federal Student Aid (FAFSA), required by every institution before need-based financial aid can be awarded. The first BIG change taking place is that the FAFSA form won’t be available until December 1, because of the overhaul to the FAFSA and federal aid methodology.
A second form, the CSS Profile, is required by about 150 undergraduate institutions. It is owned and administered by the College Board and uses an institutional methodology to calculate need eligibility. This form opens as usual on October 1, 2023, for the 2024-2025 school year. Some colleges may require other forms as well. A list of CSS Profile colleges can be found here.
Who Should Apply?
- Anyone who believes they might qualify for need-based financial aid. Running the net price calculator on the college website of four, five, or six institutions a student plans to apply to will give you a pretty good idea of whether the student will be eligible for much, if any, need-based aid.
- Anyone who thinks they may require financial aid at any point during their child’s undergraduate career. Some colleges will not consider a request for institutional aid if the student did not submit the necessary forms when they first applied as a freshman or transfer student. Other colleges may require a waiting period of at least a full academic year for such students.
- Anyone who expects to have two or more children in college at the same time, which may significantly lower the threshold for need-based eligibility. Another change is that the FAFSA no longer uses the number-of-children-in-college as a factor in federal aid eligibility, but this sibling question remains on the new FAFSA form. Many colleges will continue to use this data in calculating institutional aid, often a much larger source of grants and scholarships.
- Anyone applying for merit aid at institutions that require the FAFSA or CSS Profile for these awards. Although most institutions do not require submission of these forms for merit aid, it is necessary to verify on each college’s website, or with the admission office that administers merit aid, whether these forms are required.
- The deadline to submit the forms varies by institution. Verify each institution’s required forms and deadlines on its website or with the financial aid office. Missing a deadline can seriously jeopardize a student’s eligibility for aid.
- For those planning to apply during the Early Decision or Early Action rounds, financial aid deadlines are usually November 1 or 15. Know your deadlines.
- Since these forms are designed to be submitted once listing all colleges requiring the form, it is crucial that they are submitted before the student’s earliest financial aid deadline.
- Make sure your 2022 federal tax returns have been submitted and processed. But even if you are behind on completing your tax returns, it is best to submit the financial aid forms prior to each institution’s deadline.
- The FAFSA and CSS Profile will ask detailed questions about your 2022 income, current assets, and demographic information. Before beginning to complete these forms, have your 2022 federal tax returns, current bank statements, and records of any other assets and investments on hand.
- On October 18, Launching College Success will be offering a detailed webinar on the FAFSA, any aspect of financial aid, scholarships and loans. Check out my website for more information and to sign up for the webinar.
- For current high school seniors or transfer students expecting to attend college in the 2024-2025 school year, the CSS Profile can be accessed and submitted at https://cssprofile.collegeboard.org/ beginning October 1, 2023. Trying to access the CSS Profile earlier than this date will direct you to the current year’s form, not the 2024-2025 form.
- The CSS Profile belongs to the student, though often an adult will complete it on the student’s behalf.
- It is recommended that the student or parent login to the CSS Profile using the student’s College Board account.
- Unlike the FAFSA, each biological parent and stepparent is listed on the CSS Profile. In cases of separation or divorce, the noncustodial parent will be sent a link to create their own CSS Profile. Neither parent will see the other’s completed form or financial information.
- A parent-owned 529 college savings plan for which the student is the beneficiary should be reported as a parent asset, not a student asset. Parent assets are assessed at 5 percent per year by the CSS Profile and 5.64 percent per year by the FAFSA. Student assets are assessed at 25 percent per year by the CSS Profile and 20 percent per year by the FAFSA.
- It may be confusing to figure out where to list a particular asset, but the important thing is not to list it twice. Doing so will reduce your child’s eligibility for need-based aid. Take the time you need to make sure all your information is submitted accurately and correctly.
After the Forms are Submitted
- Following submission of the FAFSA, the student will see their Student Aid Index (SAI) on their confirmation page once all contributors (parent/s) have submitted their information. The parents will not see this information since the FAFSA is the student’s, not parent’s, application. The SAI will also be included on the FAFSA Submission Summary (formerly the Student Aid Report) that will be emailed to the student. Ask your student to be on the lookout for this email after the form has been submitted and send it to you.
- The Expected Family Contribution (EFC) calculated by the CSS Profile’s institutional methodology will not be known to the applicant until they receive their financial aid offer from each institution.
- The SAI and EFC are the starting point for the financial aid office’s calculation of federal, state, and institutional financial aid. These two numbers may be similar, or may be very different, because of differences in the two methodologies.
- Important tip: Students should forward all emails from the Department of Education and financial aid offices to their parents. These could include requests for further verification and documentation.
Financial Aid Question on the College Application
Most college applications now ask, “Do you expect to apply for need-based financial aid?” It is important that the student’s answer is accurate and truthful. If you expect to apply, this box must be checked “yes.” If you don’t plan to apply, check this box “no.” Ask your child to check with you before checking off this box.k
If the student checks “no” but does file the FAFSA, one of three things will happen over which the family has no control:
- The college contacts the student to clarify whether or not they’re applying for need-based aid, inconveniencing already overworked financial aid and admission offices.
- The college doesn’t contact the student and processes the forms assuming the student is applying for need-based aid.
- The college doesn’t contact the student and assumes the student is not applying for need-based aid. The student would still be eligible for federal aid (student loans, federal work-study, FSEOG and Pell Grants), but may be ineligible for institutional grants, often the largest source of need-based aid.
It is best to answer this question accurately the first time and not play games.
What About Early Decision and Early Action Applicants?
This year’s delay of the FAFSA release until December creates some complications for students applying for need-based aid in the binding Early Decision and non-binding Early Action rounds.
- Colleges that only use the FAFSA and no other institutional forms will be unable to package financial aid awards until they have received the applicant’s Institutional Student Information Record (ISIR), the data sent to the institution after the student’s FAFSA is processed. Depending upon when the FAFSA is submitted by the family, this could be as late as January or beyond. Acceptance letters will most likely be sent on schedule in mid- to late-December with an explanation that the offer of financial aid will be delayed. For binding ED applicants there will be no requirement that they deposit until several weeks after the financial aid offer is sent to the applicant.
- Colleges that use both the FAFSA and the CSS Profile (or another institutional form) will have all the information they need to package a provisional offer of financial aid, but because the eventual award will likely include some form of federal aid this offer will not yet be official. Similar to institutions only using the FAFSA, the deposit date for binding Early Decision students will be extended until after the applicant has been sent the official offer of aid.
- Important tip: For families needing to compare financial aid offers before deciding where to enroll, applying in the binding Early Decision round is usually not advised.
Borrowing Federal Student Loans
Families who are applying for need-based financial aid should understand that the annual limit of federal student loans is usually included in the financial aid award. The exceptions are a few highly selective schools with large endowments that have replaced these loans with additional institutional grants in their financial aid awards.
For dependent undergraduate students, the annual loan limits are $5,500 for freshmen, $6,500 for sophomores, $7,500 for juniors, and $7,500 for seniors. For undergraduates requiring more than four years to complete their degree, the $27,000 4-year undergraduate loan limit increases to $31,000.
For those borrowing for the 2024-2025 school year, the interest rate is 5.50% and fee about 1%. With its built-in protections and low cost, federal undergraduate student loans are often the best option for students who need to borrow to help meet college costs. Borrowing up to the 4-year limit of $27,000 will probably not be too large a burden for a college graduate just entering the job market to repay, even at a starting salary of as little as $35,000 per year. At this annual income level, loan repayments over the typical 10-year term would represent about 10% of monthly pre-tax earnings.
Those who are sure they will not be applying for need-based financial aid but nonetheless want to take advantage of the low interest federal student loan program will still need to file the FAFSA to initiate the process.
To be sure your child’s college application is not put into the “applying for need-based aid” stack, I recommend these steps:
- The student should indicate on the college application that they do not expect to apply for need-based aid.
- By May 1, be sure to deposit at the school where the student will enroll.
- In May or June after depositing, your child should file the FAFSA listing only the one school where they are enrolling.
- After the FAFSA is processed (1-3 days after submitting), call the financial aid office and inform them that your child plans to borrow federal student loans. They will give you further instructions for completing the process. This leaves plenty of time to originate and disburse the student loan to the institution prior to first semester billing in August.
It appears that the Better FAFSA being released in December will not have fewer questions than previous versions, but it will be more interactive, more closely aligned with answers on tax returns, and simpler to complete. Filers should keep in mind that, by law, a third party cannot charge a fee for completing the FAFSA, though general guidance can certainly be part of a larger package of college or financial aid counseling.
The CSS Profile that will be released on October 1 will still be a long, invasive, and intimidating form, requiring several hours to complete, but usability has improved over the last several years.
Filers requiring further assistance can call the helpline phone numbers: 1-800-433-3243 (FAFSA) and 1-844-202-0524 (CSS Profile).
If you need some support for your high school student with the college search and admissions process, I can help. Reach out to me at email@example.com or 240-285-1920. I look forward to hearing from you.