January 5, 2015
It’s time to complete financial aid forms for college, and doing it sooner rather than later can increase chances for a better aid package.
The new Free Application for Federal Student Aid, known as the Fafsa, will become available online on Jan. 1. The form is the starting point for students and families seeking federal aid, and is used by most states and colleges as part of the student aid process. The form collects financial and personal information about students, and their parents if they are dependents, to determine eligibility for scholarships, grants, work-study awards and loans. It must be completed every school year for students seeking aid.
Filing the Fafsa as soon as possible after Jan. 1 increases applicants’ chances of getting the best financial aid packages for which they are eligible. Those who file the form from January through March receive, on average, twice the amount of grant money as those who file later, said Mark Kantrowitz, publisher of the financial aid website Edvisors.com.
That probably is because many states and colleges have early deadlines. Connecticut, for example, has a Feb. 15 deadline for certain aid programs. Plus, some state grant programs distribute awards on a first-come, first-served basis. So waiting means that students may miss out on aid even if they qualify. (Edvisors offers a guide to filling out the Fafsa, available as a free download.)
The other commonly used college financial aid form is CSS/Financial Aid Profile. The New York Times has more information, including some common questions and answers about the forms.
Ann Carrnsdec, “It’s Almost Time to Fill Out College Financial Aid Form for Fall 2015″, New York Times, Dec. 29, 2014.
June 23, 2014
The short answer:
Your home equity will count on the CSS Profile, but not the FAFSA.
Michelle Kretzschmar of Do It Yourself College Rankings explains more.
Since each school decides if they use home equity in their methodology and how much to consider, how much home equity will affect financial aid will vary by institution. Mark Kantrowitz of Fastweb, estimates that colleges cap the amount of equity (value of home-mortgage) considered at between two to three times annual income. Troy Onink in Forbes reports that “home equity counts under the Institutional Methodology, but only up to 1.2 times the parent’s adjusted gross income (AGI) under the Consensus.”
When in doubt, ask the school directly.
If you want to know the actual figure, you’re best bet is to ask the college. According to Money Watch.com
If your home has appreciated a lot, ask private colleges how they factor in home equity when determining aid, advises Paula Bishop, a financial aid consultant in Bellevue, Wash. Their answers may differ dramatically. Some schools, such as Princeton University, ignore home equity. Others, such as Boston College and American University, include 100 percent of it as an asset.
Troy Onink, “How Assets Hurt College Aid Eligibility On FAFSA And CSS Profile”, Forbes, 2/14/2014.
Michelle Kretzschmar, “Does home equity affect financial aid?”, Do It Yourself College Rankings, 11/11/2013.
February 4, 2014
The federal government lets most divorced or absent fathers off the hook in paying for college expenses.
Among the “five questions that trip parents up most of all”, Forbes includes one with an answer that seems particularly counterintuitive and even unfair to many families.
2) If my parents are divorced, which parent’s income and assets do I report on the FAFSA and CSS Profile?
For students whose parents are divorced, separated, or never married, the custodial parent’s income and asset information must be reported on the FAFSA and CSS PROFILE. The “custodial parent” is defined as the parent with whom the student lived with most during the previous year. It does matter which parent claims the student as an income tax exemption. If the student lived with each parent an equal amount of time, then the parent who provided the most support to the student must provide his/her information on the FAFSA and PROFILE. If the custodial parent is remarried, the step-parent’s information must also be reported.
Parents and student should also be aware that colleges and universities may request information from the non-custodial parent to determine eligibility for institutionally-funded forms of financial aid. If a college requires information from the non-custodial parent, this process will be explained in the financial aid application procedures. Colleges that use the PROFILE typically collect non-custodial parent information via the CSS Noncustodial PROFILE Application. Other colleges may collect non-custodial parent information via an institutional application.
Several potential inequities arise from this treatment.
- Shouldn’t non-custodial parents bear some responsibility for their children’s college costs?
- Is it fair to make the custodial step-parent put his step-children’s college financial needs ahead of his other children’s needs?
- Isn’t it too easy to arrange for strategic sleepovers that would enable families to put the lower-income parent on the financial aid form to qualify for more aid?
Related: Boost your chances for college financial aid with these FAFSA tips (Cost of College)
January 28, 2014
The FAFSA form has been getting easier to complete.
In recent years, the U.S. Department of Education has simplified and streamlined the process. Nearly all applicants now complete the form online instead of filing out by hand a lengthy paper application. A feature that tailors questions to each applicant has reduced time. A tool used to retrieve Internal Revenue Service tax information online, rather than manually inputting the information, has shortened completion times as well.
The changes have led to a 50% increase in the number of students who completed the application over the last four years, Duncan said.
The form can usually be completed in about one hour.
The FAFSA “is required to tap the $150 billion in grants, loans and work-study funds doled out each year by the federal government, as well as other state and private funds”.
A reminder to complete the FAFSA as soon as possible after it becomes available on January 1:
“You do not want to wait until the last minute with financial aid — because when it’s gone, it’s gone,” she warned.
Related: What forms do you need to complete the FAFSA? (Cost of College)