Unless you qualify for federal and/or state funds, most families receive little to nothing from public colleges. Many private colleges, on the other hand, offer need-based financial aid resulting from your EFC calculation. Private schools offer much more merit scholarships as well.

Only about 10% of 4-year colleges require the CSS Profile Form in order for them to assess eligibility for need-based financial aid. These colleges are referred to as Profile Schools, or Profile Colleges.

 

Most colleges use the FAFSA form to calculate a student’s EFC (Expected Family Contribution). This calculation is used to assess eligibility for federal and state financial aid as well as institutional aid (i.e., money from the college’s own endowment funds).

 

Profile Colleges use the FAFSA for federal and state financial aid eligibility, but they use the CSS Profile Form for institutional aid assessment. The Profile Form is much more comprehensive in its questioning than is the FAFSA. For example, the Profile Form asks about such things as home equity, business assets (regardless of the size of the biz), retirement funds, and younger children’s assets, whereas the FAFSA does not.

 

Even if your student applies to only one Profile School AND your income and assets make you eligible for need-based financial aid, you should complete the CSS Profile Form.

There’s not a one answer solution for this question. A large number of college freshmen enter undeclared. This is not uncommon, but for a student who has aspirations of entering an impacted curriculum or otherwise selective college within a university and assumes they can “slip in under the radar” by entering undeclared and then transferring late in the sophomore year, they will most often be very disappointed.

 

The accurate answer to your question is this: The necessity to declare (or not declare) a major depends on a number of factors, including the college, the major, even the student’s academic credentials.

The vast majority of colleges in America are what we call “pay-and-go”. Your son can easily get into many colleges with a GPA of 2.5. These colleges may or may not be the ones he has in mind.

 

The real concern is if your son should go to college or not? The first question to ask is why he wants to go – if he has a big enough why his GPA will go up and he will be willing to do whatever it takes to make his dream come true.

There’s one major difference that should be considered. Early Action is NON-committal, while Early Decision IS. You can apply Early Action and in the event that you’re accepted you don’t need to commit until May 1st. However, if you apply Early Decision and you’re accepted, you agree to attend as well as accept the financial aid award offered which may or may not be a good offer.

Definitely not. Many students consider taking a GAP year after high school even if they plan on going to college. Higher education, however achieved, is all about planning for a career. What’s important are skills and knowledge. There are many alternatives to achieving this, including:

 

Community college

Four Year Colleges/Universities

Trade & Technology schools

Military Service

Apprenticeships

Online & Distance Learning programs

The cost can vary from approximately $50 to about $80 or so with the high end being $100 with additional costs of mailing, etc.

Every child’s situation is different but on average probably six (6) as a minimum with approximately 12 as the maximum.

They are not easily obtained. Athletic scholarships are highly misunderstood. Only a small number of exceptionally talented high school athletes even have a chance of being recruited into a Division 1 college. And for those fortunate ones who are, the vast majority will find only a partial scholarship being offered them. Most often it doesn’t come even close to paying for tuition, not to mention room & board, books, and living expenses. The other thing to keep in mind is that in the event of an injury, the scholarship can be removed.

No, that just isn’t possible. But, with proper planning, by both the student and the parents, any student can achieve higher education; receive valuable skills, and training, without going into debt. There is no one way, one-size-fits-all solution. This is a process that the whole family take part in and is what the SAFE Steps is all about.

EFC is based on the federal algorithms (properly called the Federal Methodology), contained within the FAFSA form and calculates what you are expected to pay and has nothing to do with affordability.

No, the EFC, as calculated by the FAFSA form should be viewed as a benchmark used by colleges to assess a child’s eligibility for need-based financial aid and not as the yearly amount that you can expect to pay for attending the college.

Unfortunately, the answer is YES. That is, if you are referring to need-based financial aid. Schools requiring the FAFSA and/or CSS Profile form will NOT make your son a formal (final) financial aid offer until your income tax return has been filed with the IRS. Some schools will give you an estimate based on your estimated numbers, but nothing formal. And remember, need-based money can “run dry” from colleges own funds, so this could result in a lack of financial aid that would otherwise have been offered.

This type of scholarship is considered a Scholarship Prize. Such scholarships can be used for any purpose, including a computer, car, travel, etc., even clothes. However, if part or all the funds are used for such purposes, then 100% of the scholarship funds are seen as taxable income.

 

If a portion of the scholarship is used to pay for college tuition but the rest is used to buy a car, then 100% of the scholarship funds are treated as taxable income. On the other hand, if ALL of the funds are used to pay for qualified educational expenses such as tuition & fees, required books, supplies, etc., then the scholarship would qualify as tax-free income under IRS guidelines.

Penalty-free withdrawals from regular IRAs can be made to pay for undergraduate or graduate qualified higher education expenses for the taxpayer, the taxpayer’s spouse, or the child or grandchild of the taxpayer at an eligible educational institution.

 

The taxpayer will owe federal income tax on the amount withdrawn, but will not be subject to the typical 10% early withdrawal penalty. The penalty-free IRA withdrawal is available only if the withdrawal is used to pay for “qualified education expenses”.

 

Qualified education expenses include tuition, fees, books, supplies, and equipment. Room and board are also included if the student is enrolled on at least a half-time basis.

 

Any tax-free item under IRC Section 117 must reduce these education expenses such as, scholarships or grants, IRC Section 135 qualified U.S. Series EE bonds, veteran’s education benefits, and other tax-free educational benefits.

No, FAFSA and CSS do not care whether income is taxable or not. In most cases all income must be declared. There is a section for Untaxed Income.

 

No, this is not true. Until your child turns 24, gets married, has a baby, or enters the military, they are considered a dependent student in the eyes of the government and the colleges.

 

 

 

 

 

 

Financial Aid Forms fall into 3 categories:

 

The Federal FAFSA Form

College Board’s CSS Profile Form

Institutional Financial Aid Forms (private colleges)

The individual college websites will indicate which of these is necessary. Some colleges require only the FAFSA, while others require the FAFSA and the Profile, and yet others, all three.

 

For many public colleges, the only “financial aid” offered some families is in the form of loans… the student Stafford loan and the parent PLUS loan. The SAFE Steps strongly advises AGAINST these loans.

There’s nowhere on the FAFSA or CSS Profile forms to enter any type of “deduction” for student (or parent) loan debt. However, depending on the specifics, some families are able to take advantage of tax credits and deductions.

 

Tax credits, of course, reduce tax liability and translate dollar-for-dollar to more cash flow for college. Also, there’s a “Student Loan Interest Deduction” on the 1040 Form. Since this is positioned “above the line”, any such qualified deduction reduces Adjusted Gross Income (AGI), resulting in a reduced EFC.

 

If you’ve taken out higher education loans and have future FAFSA filings, you should plan on discussing this important topic with your tax professional.

This is a great question. Many moms and dads are shocked when they learn that some colleges boast at “meeting 100% need”, with the financial aid award being comprised of nothing but loans.

 

There are 2 basic categories of student loans: subsidized and UN-subsidized. There’s somewhat of a case to be made that the subsidized loans are financial aid, only because these loans are interest-free to the student as long as the student is enrolled at least half-time in a college. The fact that the government/tax-payers is paying the interest lends itself to categorizing this type of loan as financial aid but it’s still a loan that must be paid back after graduation, and with some level of interest.

 

Now for the 2nd category of loans… unsubsidized. While the government and many colleges consider these too to be “financial aid”, it’s really a stretch. Granted, the payments are deferred until after graduation, BUT these loans begin accruing interest the day the funds are disbursed to the college. And the federal Stafford loan (the most common/de facto standard) could rise up to the capped interest rate of 8.25%.

While student loans, subsidized and unsubsidized, always offer deferred repayment terms until post-college graduation, subsidized loans are vastly preferred to unsubsidized.

 

Federal subsidized loans accrue NO interest as long as the student is enrolled in college with a status at least equal to half-time. For students receiving the maximum subsidized Stafford loan of $3500 for the freshman year, even if they were to continue into an advanced degree program (Masters, even Ph.D.), the day they graduate (many years later), the principal on their freshman loan would still be $3500.

 

Federal unsubsidized loans accrue interest from the moment the funds are disbursed to the college. We advise AGAINST taking out federal unsubsidized loans. Interest rates are uncertain and these adjust each summer. They can potentially exceed 8%.

The only student loan that is guaranteed to undergraduate college students is the federal Stafford loan. Every freshman is entitled to $5500, sophomores $6500, and juniors and seniors each receive $7500. There are additional education loans you may have heard of including Perkins loans, (parent) PLUS loans, and private loans, but these are not entitlement loans. Adding up the Stafford loan amounts mentioned, students can borrow $27K over 4 years, and if a 5th year (or more) is required to achieve the undergrad degree, an additional $4K (total) is available, maxing the Stafford loan out at $31K.

It is possible to borrow the entire amount for college costs but we at The SAFE Steps advises against this. Here is some information that you may find helpful:

 

The only “entitlement” loan that a student can expect to receive is the Stafford loan. This amounts to $27K over 4 years. Families who do not receive any financial aid, either Need or Merit based, can choose to borrow the balance in one of two manners:

 

Federal parent PLUS loan. This is NOT an entitlement and must applied for by EITHER Mom or Dad. Depending on the financial profile of the family, some parents are approved and some are not. You can borrow up to the cost of college, NOT counting financial aid offered. The interest rate for this loan is 7.9% and there is a 4% origination fee.

Private loans. Institutions like Sallie Mae, Chase Bank, Citibank, etc. offer student loans with the contingency that Mom or Dad must co-sign. These loans vary in interest rates as a function of credit history, risk, etc.

There’s no limit on how many times a student can take the SAT exam. Having said that, it’s better, in our opinion to prepare ahead of time in order to limit the number of times the exam needs to be taken. Same situation for the ACT exam. Many students have a clear preference of one of them over the other. If they feel confident that with additional preparation they can increase their score substantially, they should take it once more. This approach works well for most students.XZZ

There are a number of online courses as well as tutor and classroom options available. We would suggest ePrep as a good online option. Click here to check it out.

The ACT is just a little shorter than the SAT. There’s an optional essay section. With the essay, the ACT is 3 hours and 25 minutes. Without the essay, it’s 2 hours and 55 minutes. It’s comprised of 5 sections:

 

English, 1 section

Math, 1 section

Reading, 1 section

Science, 1 section

Writing, 1 section

 

Each of the 5 sections counts for 36 points and the composite (total) score is the arithmetic average of the 5 section scores, so a perfect score would be 36.

  • English: 20.3
  • Math: 20.9
  • Reading: 21.3
  • Science: 20.8
  • Composite: 21.0

The SAT is 3 hours and 45 minutes long. It’s comprised of 10 sections:

 

Math, 3 sections

Critical Reading, 3 sections

Writing, 3 sections

Experimental, 1 section

The Math, Critical Reading, and Writing all count for 800 points each, so a perfect score would be 2400. About half the colleges aren’t counting the essay.

For 2012, according to Kaplan, the average SAT sub-scores were as follow:

 

Math: 514

Critical Reading: 496

Writing (Multiple Choice): 488

Writing (Essay): 7.1 (out of 12)

Total Average SAT Score: 1498

The PSAT will be offered in October and November of 2016 to 10th and 11th graders. There are three possible PSAT test dates this year: Primary: Wednesday Oct. 19. Alternate: Wednesday Nov. 2.

Here are the 3 elements that define the scoring system for the ACT:

 

Correct Answer: +1 point

Omitted Question: 0 points

Incorrect Answer: 0 points

 

Here are the 4 elements that define College Board’s scoring system for the SAT:

 

Correct Answer: +1 point

Omitted Question: 0 points

Incorrect Answer (multiple choice): -1/4 point

Incorrect Answer (non-multiple choice math questions): 0 points

The vast majority of colleges in America are what we call “pay-and-go”. Your son can easily get into many colleges with a GPA of 2.5. These colleges may or may not be the ones he has in mind.

 

The real concern is if your son should go to college or not? The first question to ask is why he wants to go – if he has a big enough why his GPA will go up and he will be willing to do whatever it takes to make his dream come true.

The Financial Aid Office of a college handles need-based financial aid, but the Admissions Office administers all merit-based financial aid.

You may appeal though the likelihood of the appeal being successful is doubtful. There is always a possibility but it is rare.

According to NACAC (National Association of College Admissions Counselors), here are the “Top Factors in College Admissions”:

AP (Advanced Placement) classes/tests

IB (International Baccalaureate) classes/diploma

Dual-enrollment Courses

Rigor

Relevance

Quantity & Quality

SAT

ACT

AP & Subject Tests

It’s very unfortunate that families actually back out of an Early Decision (ED) offer, but it does happen. Applying ED is a serious commitment. It is indeed a binding agreement. You’re agreeing that, if accepted, your child WILL attend. And by implication you’re agreeing to accept the financial aid package, if any, forthcoming.

 

The Common Application instructions for ED state:

 

“If you are accepted under an Early Decision plan, you must promptly withdraw the applications submitted to other colleges and universities and make no additional applications to any other university in any country. If you are an Early Decision candidate and are seeking financial aid, you need not withdraw other applications until you have received notification about financial aid from the admitting Early Decision institution.”

 

Now there is a bit of wiggle-room in the instructions as indicated by this:

 

Should a student who applies for financial aid not be offered an award that makes attendance possible, the student may decline the offer of admission and be released from the Early Decision commitment. The institution must notify the applicant of the decision within a reasonable and clearly stated period of time after the Early Decision deadline.

 

So if you find yourself in this position, you should request being “released” from your commitment. And by all means get the release notification in writing/email.

 

How To Avoid This Situation

 

There are 2 things you can do to avoid back-peddling from an ED commitment:

 

1) Most highly-selective (private) colleges have a decent Net Price Calculator online to give you a ballpark idea of the financial aid you can expect. Start here to get a rough idea of what an average financial aid award would look like for your family’s profile.

 

2) If you cannot comfortably “write the check” for the total cost of college for an ED application, then you should request an Early Read from the Financial Aid Office. Different schools have different procedures for this activity. The results of this should be reliable and give you a reasonable idea of how affordable the school is for your family.

There’s not a one answer solution for this question. A large number of college freshmen enter undeclared. This is not uncommon, but for a student who has aspirations of entering an impacted curriculum or otherwise selective college within a university and assumes they can “slip in under the radar” by entering undeclared and then transferring late in the sophomore year, they will most often be very disappointed.

 

The accurate answer to your question is this: The necessity to declare (or not declare) a major depends on a number of factors, including the college, the major, even the student’s academic credentials.

The vast majority of colleges in America are what we call “pay-and-go”. Your son can easily get into many colleges with a GPA of 2.5. These colleges may or may not be the ones he has in mind.

 

The real concern is if your son should go to college or not? The first question to ask is why he wants to go – if he has a big enough why his GPA will go up and he will be willing to do whatever it takes to make his dream come true.

There’s one major difference that should be considered. Early Action is NON-committal, while Early Decision IS. You can apply Early Action and in the event that you’re accepted you don’t need to commit until May 1st. However, if you apply Early Decision and you’re accepted, you agree to attend as well as accept the financial aid award offered which may or may not be a good offer.

According to NACAC (National Association of College Admissions Counselors), here are the “Top Factors in College Admissions”:

 

Grades in College Prep Courses

AP (Advanced Placement) classes/tests

IB (International Baccalaureate) classes/diploma

Dual-enrollment Courses

Strength of Curriculum

Rigor

Relevance

Quantity & Quality

Admissions Test Scores

SAT

ACT

AP & Subject Tests

High School GPA

The cost can vary from approximately $50 to about $80 or so with the high end being $100 with additional costs of mailing, etc.

Every child’s situation is different but on average probably six (6) as a minimum with approximately 12 as the maximum.

Home equity is asked about ONLY on the CSS Profile Form, not the FAFSA. But the actual assessment of your home equity can vary dramatically from school to school. There are 3 methodologies used by Profile schools in assessing your home equity.

 

METHODOLOGY #1: 5% Assessment

 

The nominal assessment on College Board’s CSS Profile form for home equity is 5%. So if you have $200K of equity, the NOMINAL assessment would result in an additional $10K of EFC. OUCH!

 

METHODOLOGY #2: Cap The Equity

 

Many schools are now “capping” the assessment of your home equity as a function of your AGI (Adjusted Gross Income). Common cap multipliers are 1.2 and 1.5. So if, for example, your AGI is $100K and the school is using the 1.2 multiplier, then your home equity would be “capped” at $120K, regardless of how much equity really exists in your home. The EFC assessment due to home equity no higher than 5% of the $120K, or $6K. If your home equity is actually less than the $120K, then the actual equity would be assessed. But if your home equity was greater (even far greater) than $120K, then the capped $120K would be used in the 5% calculation.

 

METHODOLOGY #3: NO Assessment

 

This, of course, is everyone’s favorite! But only a few Profile schools are NOT assessing home equity at all. Princeton and Harvard began this policy a number of years ago.

 

SUMMARY

 

Needless to say, if your student is applying to a Profile school (or several Profile schools) and you’re hoping to receive some need-based financial aid, you need to understand the schools’ policies regarding home equity EFC assessment. You should contact the Profile schools’ Financial Aid Offices and ask them the direct question, “How do you assess home equity relative to the EFC assessment?”

Fortunately, there is. U.S. News does a great job every year in tracking these colleges. According to U.S. News:

 

“In a 2012 U.S. News survey, 1,164 colleges reported the average percentage of financial need they met for their incoming undergrad students in fall 2011.

 

64 of those institutions, including both National Universities and National Liberal Arts Colleges, reported meeting 100 percent, on average, of their admitted students’ financial need.

 

A college that meets full financial need won’t necessarily cover every dollar a family owes, but they will use some form of financial aid to cover the gap between total costs (including tuition, room and board, books, travel, and other expenses) and expected family contribution (EFC).

 

The calculation of an EFC can vary by institution, as schools may use their own formulas including indicators such as household income, assets, and family size to help determine what they think a family can reasonably pay for college. Schools can also use the federal EFC, calculated from a student’s Free Application for Federal Student Aid (FAFSA).

 

Once an institution has determined an EFC, the means they use to fill outstanding financial need can vary. While some schools on the list below may make up the difference with scholarships and grants, others may offer subsidized student loans or work-study opportunities. Still others may use a combination of the former (which students won’t have to pay back) and the latter (which will ultimately cost the student either money or time and effort).

 

Some institutions, such as Grinnell College, have reported meeting full financial need for years, while others, including the University of Notre Dame, are on the list now after not making the cut last year. Only schools that are defined by U.S. News as National Universities or National Liberal Arts Colleges were considered for this report.

 

These colleges claimed to have met 100 percent, on average, of the financial need of their admitted full-time undergraduate students in fall 2011:

 

School Name  State    U.S. News Rank & Category

Amherst College         MA      2, National Liberal Arts Colleges

Amridge University     AL        RNP*, National Liberal Arts Colleges

Austin College TX        63, National Liberal Arts Colleges

Barnard College         NY       22, National Liberal Arts Colleges

Boston College           MA      31, National Universities

Bowdoin College        ME      6, National Liberal Arts Colleges

Brown University        RI         15, National Universities

Bryn Athyn College of the New Church         PA        RNP*, National Liberal Arts Colleges

Bryn Mawr College    PA        26, National Liberal Arts Colleges

California Institute of Technology     CA       10, National Universities

Carleton College         MN      8, National Liberal Arts Colleges

Carroll University       WI       43, Regional Universities (Midwest)

Claremont McKenna College CA       10, National Liberal Arts Colleges

Colby College ME       18, National Liberal Arts Colleges

Colgate University      NY       18, National Liberal Arts Colleges

College of the Holy Cross       MA      32, National Liberal Arts Colleges

Columbia University   NY       4, National Universities

Concordia College      AL        RNP*, Regional Colleges (South)

Cornell University       NY       15, National Universities

Dartmouth College     NH       10, National Universities

Davidson College       NC       12, National Liberal Arts Colleges

Duke University          NC       8, National Universities

Emory University        GA       20, National Universities

Franklin W. Olin College of Engineering       MA      Unranked

Georgetown University          DC       21, National Universities

Gettysburg College    PA        46, National Liberal Arts Colleges

Grinnell College          IA         22, National Liberal Arts Colleges

Hamilton College       NY       16, National Liberal Arts Colleges

Harvard University     MA      1, National Universities

Harvey Mudd College CA       12, National Liberal Arts Colleges

Haverford College      PA        10, National Liberal Arts Colleges

Macalester College    MN      24, National Liberal Arts Colleges

Massachusetts Institute of Technology         MA      6, National Universities

Middlebury College    VT        4, National Liberal Arts Colleges

Mount Holyoke College         MA      32, National Liberal Arts Colleges

Northwestern University       IL         12, National Universities

Oberlin College          OH       26, National Liberal Arts Colleges

Occidental College     CA       39, National Liberal Arts Colleges

Pitzer College CA        43, National Liberal Arts Colleges

Pomona College         CA       4, National Liberal Arts Colleges

Princeton University   NJ        1, National Universities

Rice University            TX        17, National Universities

Scripps College           CA       24, National Liberal Arts Colleges

Smith College MA      18, National Liberal Arts Colleges

St. Olaf College           MN      55, National Liberal Arts Colleges

Stanford University    CA       6, National Universities

Swarthmore College  PA        3, National Liberal Arts Colleges

Thomas Aquinas College       CA       82, National Liberal Arts Colleges

Trinity College CT        38, National Liberal Arts Colleges

Tufts University          MA      28, National Universities

University of Chicago IL         4, National Universities

University of North Carolina—Chapel Hill    NC       30, National Universities

Jonathan         Lollipop           700

University of Notre Dame      IN        17, National Universities

Jonathan         Lollipop           700

University of Pennsylvania     PA        8, National Universities

University of Richmond          VA       28, National Liberal Arts Colleges

University of Virginia VA       24, National Universities

Vanderbilt University TN       17, National Universities

Vassar College NY        10, National Liberal Arts Colleges

Washington University in St. Louis    MO      14, National Universities

Wellesley College       MA      6, National Liberal Arts Colleges

Wesleyan University   CT        17, National Liberal Arts Colleges

Williams College        MA      1, National Liberal Arts Colleges

Yale University            CT        3, National Universities

* RNP = Rank Not Published

 

According to U.S. News, the financial need data above is correct as of Feb. 11, 2013. For complete financial aid data, full rankings, and much more, access the U.S. News College Compass.”

It’s very unfortunate that families actually back out of an Early Decision (ED) offer, but it does happen. Applying ED is a serious commitment. It is indeed a binding agreement. You’re agreeing that, if accepted, your child WILL attend. And by implication you’re agreeing to accept the financial aid package, if any, forthcoming.

 

The Common Application instructions for ED state:

 

“If you are accepted under an Early Decision plan, you must promptly withdraw the applications submitted to other colleges and universities and make no additional applications to any other university in any country. If you are an Early Decision candidate and are seeking financial aid, you need not withdraw other applications until you have received notification about financial aid from the admitting Early Decision institution.”

 

Now there is a bit of wiggle-room in the instructions as indicated by this:

 

Should a student who applies for financial aid not be offered an award that makes attendance possible, the student may decline the offer of admission and be released from the Early Decision commitment. The institution must notify the applicant of the decision within a reasonable and clearly stated period of time after the Early Decision deadline.

 

So if you find yourself in this position, you should request being “released” from your commitment. And by all means get the release notification in writing/email.

 

How To Avoid This Situation

 

There are 2 things you can do to avoid back-peddling from an ED commitment:

 

Most highly-selective (private) colleges have a decent Net Price Calculator online to give you a ballpark idea of the financial aid you can expect. Start here to get a rough idea of what an average financial aid award would look like for your family’s profile

If you cannot comfortably “write the check” for the total cost of college for an ED application, then you should request an Early Read from the Financial Aid Office. Different schools have different procedures for this activity. The results of this should be reliable and give you a reasonable idea of how affordable the school is for your family.

You need to first learn your EFC (Expected Family Contribution). If your EFC Due to Parent Income is anywhere near the total Cost of Attendance of the schools your family is considering, then moving assets will NOT improve your child’s financial aid situation at all.

According to federal law, whoever maintains the majority of PHYSICAL custody files the FAFSA. If you share custody 50/50 right down the middle, then whichever parent contributed more to the support of your son files. Don’t make the common mistake that whoever claims the child on their federal income tax return is necessarily the one who files the FAFSA form.

 

Only about 10% of 4-year colleges require the CSS Profile Form in order for them to assess eligibility for need-based financial aid. These colleges are referred to as Profile Schools, or Profile Colleges.

 

Most colleges use the FAFSA form to calculate a student’s EFC (Expected Family Contribution). This calculation is used to assess eligibility for federal and state financial aid as well as institutional aid (i.e., money from the college’s own endowment funds).

 

Profile Colleges use the FAFSA for federal and state financial aid eligibility, but they use the CSS Profile Form for institutional aid assessment. The Profile Form is much more comprehensive in its questioning than is the FAFSA. For example, the Profile Form asks about such things as home equity, business assets (regardless of the size of the biz), retirement funds, and younger children’s assets, whereas the FAFSA does not.

 

Even if your student applies to only one Profile School AND your income and assets make you eligible for need-based financial aid, you should complete the CSS Profile Form.

It is unfortunate, but unless there are some compelling “special circumstances” regarding your family’s finances or some exceptional level of hardship, it’s unlikely that any significant “free money” is available. Forecasting the out-of-pocket costs for colleges before applying is the key to avoiding this common problem. Once a student has accepted the offer for admission, with few exceptions the free money that comes through from the school doesn’t change much from the initial award.

This is such a common misconception and is absolutely false. Some families earning well beyond $100K qualify for significant need-based financial aid! To be sure, you should learn your EFC (Expected Family Contribution) early which means well before the FAFSA form is due in January/February of your student’s senior year in high school.

 

Also, when families have more than one child in college at the same time, each student’s need-based financial aid eligibility can increase dramatically. It depends on the colleges they’re attending, of course, but having 2 in college causes a split of your total EFC, nearly right down the middle.

Financial Aid Forms fall into 3 categories:

 

The Federal FAFSA Form

College Board’s CSS Profile Form

Institutional Financial Aid Forms (private colleges)

The individual college websites will indicate which of these is necessary. Some colleges require only the FAFSA, while others require the FAFSA and the Profile, and yet others, all three.

 

For many public colleges, the only “financial aid” offered some families is in the form of loans… the student Stafford loan and the parent PLUS loan. The SAFE Steps strongly advises AGAINST these loans.

Unless you qualify for federal and/or state funds, most families receive little to nothing from public colleges. Many private colleges, on the other hand, offer need-based financial aid resulting from your EFC calculation. Private schools offer much more merit scholarships as well.

There are only a few assets that do not need to be declared on the FAFSA form. They are:

 

Home Equity… this means your residence. Any rental property or 2nd-home equity must be declared.

Retirement Funds… this includes 401(k), 403(b), IRA’s (all types), and non-qualified annuity funds (all types)

Business Assets… if your business has 100 or fewer employees, your biz assets are NOT to be declared. Greater than 100, you must declare them.

Your net worth (according to the FAFSA form) for financial aid considerations is determined by 2 lines on the FAFSA:

 

Cash, savings, checking

Investments (stocks, bonds, mutual funds, 529 plans, etc.)

Because home equity, retirement funds, and business assets are NOT declared on the FAFSA form, it’s not uncommon for high net-worth, NON-W-2 wage-earning families to qualify for federal funds, including the Pell Grant and subsidized Stafford loans.

There’s nowhere on the FAFSA or CSS Profile forms to enter any type of “deduction” for student (or parent) loan debt. However, depending on the specifics, some families are able to take advantage of tax credits and deductions.

 

Tax credits, of course, reduce tax liability and translate dollar-for-dollar to more cash flow for college. Also, there’s a “Student Loan Interest Deduction” on the 1040 Form. Since this is positioned “above the line”, any such qualified deduction reduces Adjusted Gross Income (AGI), resulting in a reduced EFC.

 

If you’ve taken out higher education loans and have future FAFSA filings, you should plan on discussing this important topic with your tax professional.

Unfortunately, the answer is YES. That is, if you are referring to need-based financial aid. Schools requiring the FAFSA and/or CSS Profile form will NOT make your son a formal (final) financial aid offer until your income tax return has been filed with the IRS. Some schools will give you an estimate based on your estimated numbers, but nothing formal. And remember, need-based money can “run dry” from colleges own funds, so this could result in a lack of financial aid that would otherwise have been offered.

No, they are not. Student assets are assessed at a much higher rate than parent’s assets.

 

For the FAFSA form, student assets are assessed at the rate of 20% (versus the max rate of 5.64% for Parent Assets) And for the CSS Profile form, student assets are assessed at the rate of 25%. This is in comparison to the max rate of 5.00% for Parent Assets.

This is an issue that causes mass confusion among families every year. For the approximately 220 colleges that accept BOTH the FAFSA and the CSS Profile forms, the answer is really quite simple. The EFC (Expected Family Contribution) derived from the FAFSA form is used in determining FEDERAL and STATE eligibility for need-based financial aid. Funds like the federal Pell and SEOG grants as well as the subsidized Stafford loan are awarded as a function of the FAFSA EFC computation.

 

Institutional need-based financial aid is determined as a function of the CSS Profile EFC. Schools take their COA (Cost-of-Attendance) and subtract the EFC from the CSS Profile calculation to determine your student’s legitimate financial need. They then “overlay” their financial aid policies, often including how “desirable” the student is relative to the applicant pool, and award the student money out their own pocket.

 

It’s a little-known fact among families filing the CSS Profile form that their EFC varies often dramatically from one Profile school to another! This is due to “service options”, instructions provided on a college-by-college basis that supersede the nominal CSS Profile computation that would have otherwise been provided by College Board.

The Financial Aid Office of a college handles need-based financial aid, but the Admissions Office administers all merit-based financial aid.

The Department of Education administers the FAFSA form. When you submit the FAFSA, it goes to the Dept of Ed who distributes your data and resultant EFC (Expected Family Contribution) to all the colleges listed on the FAFSA. The Dept of Ed is effectively the conduit between you and the colleges. You don’t/can’t submit the FAFSA directly to a college.

The easy answer is that it’s never too soon but we advise parents to learn it by their oldest student’s sophomore year in high school. Understanding EFC should be an integral component in building the student’s college list.

Financial aid varies dramatically from student to student, as well as from college to college. An understanding of the “system” is mandatory in order to forecast with any level of accuracy “who gets what”. Every family should understand student’s need-based eligibility as a function of their EFC (Expected Family Contribution) computation as well as merit-based eligibility as a function of student achievement.

Financial aid varies dramatically from student to student, as well as from college to college. An understanding of the “system” is mandatory in order to forecast with any level of accuracy “who gets what”. Every family should understand student’s need-based eligibility as a function of their EFC (Expected Family Contribution) computation as well as merit-based eligibility as a function of student achievement.

SAR stands for Student Aid Report. This is the resulting document from completing and submitting the FAFSA form. Every submission of your FAFSA… including edits… results in a new SAR being generated and sent to all the colleges listed on your FAFSA.When you submit your FAFSA (or any revisions to it), within 3 days (typically) you’ll receive an email from “Federal Student Aid” informing you that your SAR is ready to retrieve from the FAFSA website (www.fafsa.gov). You should always retrieve your SAR(s), as this is evidence that you successfully submitted your FAFSA. Every SAR includes a permanent time stamp that serves as a “receipt”. Because of the high volume of FAFSA submissions, it’s not uncommon for colleges to claim they didn’t receive the FAFSA. Simply email your SAR as proof.

They are not easily obtained. Athletic scholarships are highly misunderstood. Only a small number of exceptionally talented high school athletes even have a chance of being recruited into a Division 1 college. And for those fortunate ones who are, the vast majority will find only a partial scholarship being offered them. Most often it doesn’t come even close to paying for tuition, not to mention room & board, books, and living expenses. The other thing to keep in mind is that in the event of an injury, the scholarship can be removed.

This type of scholarship is considered a Scholarship Prize. Such scholarships can be used for any purpose, including a computer, car, travel, etc., even clothes. However, if part or all the funds are used for such purposes, then 100% of the scholarship funds are seen as taxable income.If a portion of the scholarship is used to pay for college tuition but the rest is used to buy a car, then 100% of the scholarship funds are treated as taxable income. On the other hand, if ALL of the funds are used to pay for qualified educational expenses such as tuition & fees, required books, supplies, etc., then the scholarship would qualify as tax-free income under IRS guidelines.

No you do not. But you must claim your contribution in the “Untaxed Parent Income” section of the FAFSA form.

Yes, all income must be declared in “Household Income” regardless of the length of the marriage.

No, FAFSA and CSS do not care whether income is taxable or not. In most cases all income must be declared. There is a section for Untaxed Income.

This number is called the student’s “Income Protection Allowance” and is subject to change year-to-year. For the 2015-2016 FAFSA form, the number was $6,310.00.Any amount greater than $6,310.00 will be assessed at 50% and be applied to the Expected Family Contribution (EFC).

Whichever parent has physical custody of the child for the majority of the base year files the FAFSA form regardless of who claims the child on their taxes.

No, this will not increase your financial aid. While it’s true that 401(k) contributions will decrease your AGI and therefore your EFC (Expected Family Contribution), any contributions to qualified retirement plans… 401(k), 403(b), even IRA’s are added back on the financial aid forms, so it’s a “net-zero” effect.

No, this is not true. Until your child turns 24, gets married, has a baby, or enters the military, they are considered a dependent student in the eyes of the government and the colleges.

It can be advantageous as the EFC (Expected FAMILY Contribution) is divided by the number of kids in college for the given school year, and the resultant EFC is the number used for the individual student’s need-based financial aid eligibility.

Yes, that’s a great way to get prepared and informed. You can use the FAFSA4caster on their website.

If your child’s physical custody is indeed 50-50, then whichever parent provided the majority of their support in the base year (the year before entering college) should fill out the FAFSA. The other parent should NOT declare anything on the form, unless child support was provided to the majority provider. Child support received has a separate line on the FAFSA.

No, grant money is considered “free money.” Grants typically refer to need-based free money and are offered primarily by three entities:• Federal government• State governments• Private colleges

EFC is based on the federal algorithms (properly called the Federal Methodology), contained within the FAFSA form and calculates what you are expected to pay and has nothing to do with affordability.

No, the EFC, as calculated by the FAFSA form should be viewed as a benchmark used by colleges to assess a child’s eligibility for need-based financial aid and not as the yearly amount that you can expect to pay for attending the college.

The Asset Protection Allowance is one of the FAFSA calculations. It varies from family to family and is a function of the age of the older parent. It’s approximately $1,000 for every year of age of the oldest parent.

 

If the older parent is 50 the Asset Protection Allowance will be in the vicinity of $50K. If the assets claimed on the FAFSA are less than or equal to the Asset Protection Allowance ($50K for our example), then there is no assessment against the family’s assets relative to the EFC (Expected Family Contribution) calculation.

 

Everything above the Asset Protection Allowance amount is assessed up to a max of 5.64%. So if the declared assets for the family are $150K in cash, saving, checking and investments, the Asset Protection Allowance of $50K is subtracted from that amount resulting in a difference of $100K.

 

The $100K is assessed at 5.64% which equals $5,640, and this is considered the Parent Contribution due to Assets. The total EFC calculation is the sum of 4 components:

 

Parent Contribution due to Income

Parent Contribution due to Assets

Student Contribution due to Income

Student Contribution due to Assets

The Cal Grant is for California students attending California colleges. There are 3 criteria in order to be eligible for the Cal Grant:

 

Income less than the income ceiling – which varies based on family size

Assets less than the asset ceiling

Student GPA of 3.00

The account value of the trust must be declared on financial aid forms as a student asset. The FAFSA form assesses this at the rate of 20%, while the CSS Profile form assesses at 25%. This applies even if the trust funds can’t be accessed until after college graduation.

 

For example, if the trust is valued at $100K, the FAFSA form would assess the value of this asset at $20K, and this would be added to your son’s EFC (Expected Family Contribution) thereby decreasing his need-based financial aid eligibility by $20K. CSS Profile would assess the value at $25K.

This is a financial aid term that applies to both the FAFSA and CSS Profile forms. The base year is the year whose income must be declared on these financial aid forms. It’s the calendar/tax year BEFORE the student enters college as a freshman.

This is a great question. Many moms and dads are shocked when they learn that some colleges boast at “meeting 100% need”, with the financial aid award being comprised of nothing but loans.

 

There are 2 basic categories of student loans: subsidized and UN-subsidized. There’s somewhat of a case to be made that the subsidized loans are financial aid, only because these loans are interest-free to the student as long as the student is enrolled at least half-time in a college. The fact that the government/tax-payers is paying the interest lends itself to categorizing this type of loan as financial aid but it’s still a loan that must be paid back after graduation, and with some level of interest.

 

Now for the 2nd category of loans… unsubsidized. While the government and many colleges consider these too to be “financial aid”, it’s really a stretch. Granted, the payments are deferred until after graduation, BUT these loans begin accruing interest the day the funds are disbursed to the college. And the federal Stafford loan (the most common/de facto standard) could rise up to the capped interest rate of 8.25%.

Home equity is asked about ONLY on the CSS Profile Form, not the FAFSA. But the actual assessment of your home equity can vary dramatically from school to school. There are 3 methodologies used by Profile schools in assessing your home equity. 

METHODOLOGY #1: 5% Assessment

The nominal assessment on College Board’s CSS Profile form for home equity is 5%. So if you have $200K of equity, the NOMINAL assessment would result in an additional $10K of EFC. OUCH! 

METHODOLOGY #2: Cap The Equity

Many schools are now “capping” the assessment of your home equity as a function of your AGI (Adjusted Gross Income). Common cap multipliers are 1.2 and 1.5. So if, for example, your AGI is $100K and the school is using the 1.2 multiplier, then your home equity would be “capped” at $120K, regardless of how much equity really exists in your home. The EFC assessment due to home equity no higher than 5% of the $120K, or $6K. If your home equity is actually less than the $120K, then the actual equity would be assessed. But if your home equity was greater (even far greater) than $120K, then the capped $120K would be used in the 5% calculation. 

METHODOLOGY #3: NO Assessment

This, of course, is everyone’s favorite! But only a few Profile schools are NOT assessing home equity at all. Princeton and Harvard began this policy a number of years ago. 

SUMMARY

Needless to say, if your student is applying to a Profile school (or several Profile schools) and you’re hoping to receive some need-based financial aid, you need to understand the schools’ policies regarding home equity EFC assessment. You should contact the Profile schools’ Financial Aid Offices and ask them the direct question, “How do you assess home equity relative to the EFC assessment?”

Fortunately, there is. U.S. News does a great job every year in tracking these colleges. According to U.S. News:

 

“In a 2012 U.S. News survey, 1,164 colleges reported the average percentage of financial need they met for their incoming undergrad students in fall 2011.

 

64 of those institutions, including both National Universities and National Liberal Arts Colleges, reported meeting 100 percent, on average, of their admitted students’ financial need.

 

A college that meets full financial need won’t necessarily cover every dollar a family owes, but they will use some form of financial aid to cover the gap between total costs (including tuition, room and board, books, travel, and other expenses) and expected family contribution (EFC).

 

The calculation of an EFC can vary by institution, as schools may use their own formulas including indicators such as household income, assets, and family size to help determine what they think a family can reasonably pay for college. Schools can also use the federal EFC, calculated from a student’s Free Application for Federal Student Aid (FAFSA).

 

Once an institution has determined an EFC, the means they use to fill outstanding financial need can vary. While some schools on the list below may make up the difference with scholarships and grants, others may offer subsidized student loans or work-study opportunities. Still others may use a combination of the former (which students won’t have to pay back) and the latter (which will ultimately cost the student either money or time and effort).

 

Some institutions, such as Grinnell College, have reported meeting full financial need for years, while others, including the University of Notre Dame, are on the list now after not making the cut last year. Only schools that are defined by U.S. News as National Universities or National Liberal Arts Colleges were considered for this report.

 

These colleges claimed to have met 100 percent, on average, of the financial need of their admitted full-time undergraduate students in fall 2011:

 

School Name

State

U.S. News Rank & Category

Amherst College

MA

2, National Liberal Arts Colleges

Amridge University

AL

RNP*, National Liberal Arts Colleges

Austin College

TX

63, National Liberal Arts Colleges

Barnard College

NY

22, National Liberal Arts Colleges

Boston College

MA

31, National Universities

Bowdoin College

ME

6, National Liberal Arts Colleges

Brown University

RI

15, National Universities

Bryn Athyn College of the New Church

PA

RNP*, National Liberal Arts Colleges

Bryn Mawr College

PA

26, National Liberal Arts Colleges

California Institute of Technology

CA

10, National Universities

Carleton College

MN

8, National Liberal Arts Colleges

Carroll University

WI

43, Regional Universities (Midwest)

Claremont McKenna College

CA

10, National Liberal Arts Colleges

Colby College

ME

18, National Liberal Arts Colleges

Colgate University

NY

18, National Liberal Arts Colleges

College of the Holy Cross

MA

32, National Liberal Arts Colleges

Columbia University

NY

4, National Universities

Concordia College

AL

RNP*, Regional Colleges (South)

Cornell University

NY

15, National Universities

Dartmouth College

NH

10, National Universities

Davidson College

NC

12, National Liberal Arts Colleges

Duke University

NC

8, National Universities

Emory University

GA

20, National Universities

Franklin W. Olin College of Engineering

MA

Unranked

Georgetown University

DC

21, National Universities

Gettysburg College

PA

46, National Liberal Arts Colleges

Grinnell College

IA

22, National Liberal Arts Colleges

Hamilton College

NY

16, National Liberal Arts Colleges

Harvard University

MA

1, National Universities

Harvey Mudd College

CA

12, National Liberal Arts Colleges

Haverford College

PA

10, National Liberal Arts Colleges

Macalester College

MN

24, National Liberal Arts Colleges

Massachusetts Institute of Technology

MA

6, National Universities

Middlebury College

VT

4, National Liberal Arts Colleges

Mount Holyoke College

MA

32, National Liberal Arts Colleges

Northwestern University

IL

12, National Universities

Oberlin College

OH

26, National Liberal Arts Colleges

Occidental College

CA

39, National Liberal Arts Colleges

Pitzer College

CA

43, National Liberal Arts Colleges

Pomona College

CA

4, National Liberal Arts Colleges

Princeton University

NJ

1, National Universities

Rice University

TX

17, National Universities

Scripps College

CA

24, National Liberal Arts Colleges

Smith College

MA

18, National Liberal Arts Colleges

St. Olaf College

MN

55, National Liberal Arts Colleges

Stanford University

CA

6, National Universities

Swarthmore College

PA

3, National Liberal Arts Colleges

Thomas Aquinas College

CA

82, National Liberal Arts Colleges

Trinity College

CT

38, National Liberal Arts Colleges

Tufts University

MA

28, National Universities

University of Chicago

IL

4, National Universities

University of North Carolina—Chapel Hill

NC

30, National Universities

Jonathan

Lollipop

700

University of Notre Dame

IN

17, National Universities

Jonathan

Lollipop

700

University of Pennsylvania

PA

8, National Universities

University of Richmond

VA

28, National Liberal Arts Colleges

University of Virginia

VA

24, National Universities

Vanderbilt University

TN

17, National Universities

Vassar College

NY

10, National Liberal Arts Colleges

Washington University in St. Louis

MO

14, National Universities

Wellesley College

MA

6, National Liberal Arts Colleges

Wesleyan University

CT

17, National Liberal Arts Colleges

Williams College

MA

1, National Liberal Arts Colleges

Yale University

CT

3, National Universities

* RNP = Rank Not Published

According to U.S. News, the financial need data above is correct as of Feb. 11, 2013. For complete financial aid data, full rankings, and much more, access the U.S. News College Compass .”

According to federal law, whoever maintains the majority of PHYSICAL custody files the FAFSA. If you share custody 50/50 right down the middle, then whichever parent contributed more to the support of your son files. Don’t make the common mistake that whoever claims the child on their federal income tax return is necessarily the one who files the FAFSA form.

Only about 10% of 4-year colleges require the CSS Profile Form in order for them to assess eligibility for need-based financial aid. These colleges are referred to as Profile Schools, or Profile Colleges.

 

Most colleges use the FAFSA form to calculate a student’s EFC (Expected Family Contribution). This calculation is used to assess eligibility for federal and state financial aid as well as institutional aid (i.e., money from the college’s own endowment funds).

 

Profile Colleges use the FAFSA for federal and state financial aid eligibility, but they use the CSS Profile Form for institutional aid assessment. The Profile Form is much more comprehensive in its questioning than is the FAFSA. For example, the Profile Form asks about such things as home equity, business assets (regardless of the size of the biz), retirement funds, and younger children’s assets, whereas the FAFSA does not.

 

Even if your student applies to only one Profile School AND your income and assets make you eligible for need-based financial aid, you should complete the CSS Profile Form.

This is such a common misconception and is absolutely false. Some families earning well beyond $100K qualify for significant need-based financial aid! To be sure, you should learn your EFC (Expected Family Contribution) early which means well before the FAFSA form is due in January/February of your student’s senior year in high school.

 

Also, when families have more than one child in college at the same time, each student’s need-based financial aid eligibility can increase dramatically. It depends on the colleges they’re attending, of course, but having 2 in college causes a split of your total EFC, nearly right down the middle.

Financial Aid Forms fall into 3 categories:

 

The Federal FAFSA Form

College Board’s CSS Profile Form

Institutional Financial Aid Forms (private colleges)

The individual college websites will indicate which of these is necessary. Some colleges require only the FAFSA, while others require the FAFSA and the Profile, and yet others, all three.

 

For many public colleges, the only “financial aid” offered some families is in the form of loans… the student Stafford loan and the parent PLUS loan. The SAFE Steps strongly advises AGAINST these loans.

There are only a few assets that do not need to be declared on the FAFSA form. They are:

 

Home Equity… this means your residence. Any rental property or 2nd-home equity must be declared.

Retirement Funds… this includes 401(k), 403(b), IRA’s (all types), and non-qualified annuity funds (all types)

Business Assets… if your business has 100 or fewer employees, your biz assets are NOT to be declared. Greater than 100, you must declare them.

Your net worth (according to the FAFSA form) for financial aid considerations is determined by 2 lines on the FAFSA:

 

Cash, savings, checking

Investments (stocks, bonds, mutual funds, 529 plans, etc.)

Because home equity, retirement funds, and business assets are NOT declared on the FAFSA form, it’s not uncommon for high net-worth, NON-W-2 wage-earning families to qualify for federal funds, including the Pell Grant and subsidized Stafford loans.

There’s nowhere on the FAFSA or CSS Profile forms to enter any type of “deduction” for student (or parent) loan debt. However, depending on the specifics, some families are able to take advantage of tax credits and deductions.

 

Tax credits, of course, reduce tax liability and translate dollar-for-dollar to more cash flow for college. Also, there’s a “Student Loan Interest Deduction” on the 1040 Form. Since this is positioned “above the line”, any such qualified deduction reduces Adjusted Gross Income (AGI), resulting in a reduced EFC.

 

If you’ve taken out higher education loans and have future FAFSA filings, you should plan on discussing this important topic with your tax professional.

Unfortunately, the answer is YES. That is, if you are referring to need-based financial aid. Schools requiring the FAFSA and/or CSS Profile form will NOT make your son a formal (final) financial aid offer until your income tax return has been filed with the IRS. Some schools will give you an estimate based on your estimated numbers, but nothing formal. And remember, need-based money can “run dry” from colleges own funds, so this could result in a lack of financial aid that would otherwise have been offered.

 

No, they are not. Student assets are assessed at a much higher rate than parent’s assets.

 

For the FAFSA form, student assets are assessed at the rate of 20% (versus the max rate of 5.64% for Parent Assets) And for the CSS Profile form, student assets are assessed at the rate of 25%. This is in comparison to the max rate of 5.00% for Parent Assets.

This is an issue that causes mass confusion among families every year. For the approximately 220 colleges that accept BOTH the FAFSA and the CSS Profile forms, the answer is really quite simple. The EFC (Expected Family Contribution) derived from the FAFSA form is used in determining FEDERAL and STATE eligibility for need-based financial aid. Funds like the federal Pell and SEOG grants as well as the subsidized Stafford loan are awarded as a function of the FAFSA EFC computation.

 

Institutional need-based financial aid is determined as a function of the CSS Profile EFC. Schools take their COA (Cost-of-Attendance) and subtract the EFC from the CSS Profile calculation to determine your student’s legitimate financial need. They then “overlay” their financial aid policies, often including how “desirable” the student is relative to the applicant pool, and award the student money out their own pocket.

 

It’s a little-known fact among families filing the CSS Profile form that their EFC varies often dramatically from one Profile school to another! This is due to “service options”, instructions provided on a college-by-college basis that supersede the nominal CSS Profile computation that would have otherwise been provided by College Board.

The Department of Education administers the FAFSA form. When you submit the FAFSA, it goes to the Dept of Ed who distributes your data and resultant EFC (Expected Family Contribution) to all the colleges listed on the FAFSA. The Dept of Ed is effectively the conduit between you and the colleges. You don’t/can’t submit the FAFSA directly to a college.

The easy answer is that it’s never too soon but we advise parents to learn it by their oldest student’s sophomore year in high school. Understanding EFC should be an integral component in building the student’s college list.

Unlike the FAFSA form which doesn’t come online until January 1st, the CSS Profile form is available October 1st. The deadline for completion varies dramatically from college to college, so you should check their individual websites and/or contact their respective Financial Aid Offices. For students applying Early Action or Early Decision, the preferred deadline for submitting the CSS Profile form can be as early as November 1st of the senior year.

SAR stands for Student Aid Report. This is the resulting document from completing and submitting the FAFSA form. Every submission of your FAFSA… including edits… results in a new SAR being generated and sent to all the colleges listed on your FAFSA.

 

When you submit your FAFSA (or any revisions to it), within 3 days (typically) you’ll receive an email from “Federal Student Aid” informing you that your SAR is ready to retrieve from the FAFSA website (www.fafsa.gov). You should always retrieve your SAR(s), as this is evidence that you successfully submitted your FAFSA. Every SAR includes a permanent time stamp that serves as a “receipt”. Because of the high volume of FAFSA submissions, it’s not uncommon for colleges to claim they didn’t receive the FAFSA. Simply email your SAR as proof.

No you do not. But you must claim your contribution in the “Untaxed Parent Income” section of the FAFSA form.

Yes, all income must be declared in “Household Income” regardless of the length of the marriage.

No, FAFSA and CSS do not care whether income is taxable or not. In most cases all income must be declared. There is a section for Untaxed Income.

This number is called the student’s “Income Protection Allowance” and is subject to change year-to-year. For the 2015-2016 FAFSA form, the number was $6,310.00.

 

Any amount greater than $6,310.00 will be assessed at 50% and be applied to the Expected Family Contribution (EFC).

Whichever parent has physical custody of the child for the majority of the base year files the FAFSA form regardless of who claims the child on their taxes.

It can be advantageous as the EFC (Expected FAMILY Contribution) is divided by the number of kids in college for the given school year, and the resultant EFC is the number used for the individual student’s need-based financial aid eligibility.

Yes, that’s a great way to get prepared and informed. You can use the FAFSA4caster on their website. Click here to go there.

If your child’s physical custody is indeed 50-50, then whichever parent provided the majority of their support in the base year (the year before entering college) should fill out the FAFSA. The other parent should NOT declare anything on the form, unless child support was provided to the majority provider. Child support received has a separate line on the FAFSA.

Yes, they will qualify as an independent student and your income as a parent will not be declared on the FAFSA form.

EFC is based on the federal algorithms (properly called the Federal Methodology), contained within the FAFSA form and calculates what you are expected to pay and has nothing to do with affordability.

No, the EFC, as calculated by the FAFSA form should be viewed as a benchmark used by colleges to assess a child’s eligibility for need-based financial aid and not as the yearly amount that you can expect to pay for attending the college.

The Asset Protection Allowance is one of the FAFSA calculations. It varies from family to family and is a function of the age of the older parent. It’s approximately $1,000 for every year of age of the oldest parent.

 

If the older parent is 50 the Asset Protection Allowance will be in the vicinity of $50K. If the assets claimed on the FAFSA are less than or equal to the Asset Protection Allowance ($50K for our example), then there is no assessment against the family’s assets relative to the EFC (Expected Family Contribution) calculation.

 

Everything above the Asset Protection Allowance amount is assessed up to a max of 5.64%. So if the declared assets for the family are $150K in cash, saving, checking and investments, the Asset Protection Allowance of $50K is subtracted from that amount resulting in a difference of $100K.

 

The $100K is assessed at 5.64% which equals $5,640, and this is considered the Parent Contribution due to Assets. The total EFC calculation is the sum of 4 components:

 

Parent Contribution due to Income

Parent Contribution due to Assets

Student Contribution due to Income

Student Contribution due to Assets

The account value of the trust must be declared on financial aid forms as a student asset. The FAFSA form assesses this at the rate of 20%, while the CSS Profile form assesses at 25%. This applies even if the trust funds can’t be accessed until after college graduation.

 

For example, if the trust is valued at $100K, the FAFSA form would assess the value of this asset at $20K, and this would be added to your son’s EFC (Expected Family Contribution) thereby decreasing his need-based financial aid eligibility by $20K. CSS Profile would assess the value at $25K.

This is a financial aid term that applies to both the FAFSA and CSS Profile forms. The base year is the year whose income must be declared on these financial aid forms. It’s the calendar/tax year BEFORE the student enters college as a freshman.