Summer is still winding down, but you might already be looking ahead to your child’s financial aid application process. Families of incoming and current college students can submit their applications for 2018-2019 school year funding starting Oct. 1, 2018, three months earlier than previously.
Before you get started, it’s important to understand the primary financial aid application forms and how each impacts your child’s eligibility for federal and institutional aid.
FAFSA and the CSS Profile
To apply for federal financial aid, such as Pell grants or loans, families must complete the Free Application for Federal Student Aid, or FAFSA. Some states and schools also use the FAFSA to determine eligibility for their own scholarships and grants.
The FAFSA uses your asset and income information, as well as your student’s, to calculate your expected family contribution, or EFC. This is the minimum amount that your family will be expected to contribute toward your child’s education during the following year.
The CSS Profile, administered by the College Board, is the application around 300 colleges and scholarship programs use to determine eligibility for their own aid dollars.
You might also have to fill out the FAFSA and CSS Profile to qualify your child for merit aid, even though these awards are based on achievements in academics, sports or other extracurricular activities, not finances.
The CSS Profile is used to determine a student’s eligibility for institutional aid and is used by approximately 200 schools. While these schools also use the FAFSA to provide aid from the government, the CSS Profile is used by these specific colleges to give out grants, scholarships, and loans directly from each school.
The CSS Profile is administered by the College Board, which states,“each year CSS Profile unlocks access to grant aid in excess of $9 billion for thousands of students.” In addition, the CSS Profile more closely examines a family’s financial situation in order to award aid to students with the most financial need.
While the FAFSA is free, the CSS Profile does cost money: $25.00 for the first college and $16.00 for each additional. Therefore, if you are applying to 8 colleges that require the CSS Profile, it will cost $137.00.
However, on December 14, 2017, the College Board announced that “starting in fall 2018, CSS Profile will also allow an unlimited number of CSS Profile applications for first-time, domestic college applicants who take the SAT with a fee waiver or meet income-eligibility criteria.”
Understanding Expected Family Contribution: Federal Method
After the FAFSA is completed, the government will determine your Expected Family Contribution (EFC), using the “Federal Method,” which is determined by your financial information.
Your EFC is NOT what you will have to pay for tuition! Rather, your EFC is a government formula that provides colleges with an indication of what you might be able to afford.
After filling out the FAFSA, it can take up to five days to receive your Student Aid Report (SAR). On this report, you will find your EFC and your Data Release Number (DRN), which is required for any changes to your FAFSA, so keep a copy of the SAR for your records. If the information on your SAR is correct, your FAFSA is complete.
Understanding Expected Family Contribution: Institutional Method
Colleges that use the CSS Profile in addition to FAFSA calculate a student’s EFC by using the Institutional Method, which will likely arrive at a different number from the Federal Method because the CSS Profile takes into consideration more financial information.
The College Board further clarifies that “the FM (Federal Method) is used to calculate the student’s eligibility for federal aid, such as Pell Grants, and most types of state aid. It’s used by most public universities. Many private colleges and scholarship programs, and some public universities such as the University of Michigan, UNC – Chapel Hill, and the University of Virginia, use the IM (Institutional Method) to determine the student’s eligibility for their own grant funds.”
Key differences between FAFSA and the CSS Profile
The CSS Profile can vary from school to school, but it generally requires more information than the FAFSA and weights income and assets differently. For instance:
Unlike the FAFSA, the CSS Profile often asks for the noncustodial parent’s financial information in cases of divorce and separation.
The FAFSA excludes the value of small businesses and nonqualified annuities, as well as your primary residence’s home equity, from aid calculations. The CSS Profile asks about such assets.
The FAFSA considers gifts made to parents — including by grandparents who want to help with college costs — assets, which get more favorable treatment in determining aid eligibility than income. On the CSS Profile, such gifts are generally considered income.
Schools that use the CSS Profile also collect information on your family’s estimated academic year income, medical expenses, elementary school tuition and any other circumstances that may affect your ability to pay.
The additional information on the CSS profile is meant to help aid officers better understand your family’s ability to pay for college, not hurt your child’s aid eligibility. The FAFSA aid calculation won’t necessarily produce a more generous aid package.