Source: Forbes.com 

Back in 2006 The Princeton Review found that the biggest worry of college students and parents was getting into their top school. Now it’s college debt. That’s what makes today so important: Today is the first day students can file the Free Application for Federal Student Aid (the FAFSA) and the College Scholarship Service Profile (the CSS Profile) for the 2020-21 academic year. Filing early is important because financial aid can run out.

You should apply even if you don’t think you’ll qualify. Even high net worth applicants are often eligible for some form of aid, such as preferred loans.

The FAFSA is free, so the most you lose is an hour or two of your time to complete the application. The CSS Profile, used primarily but not exclusively by private institutions, has a $25 filing fee for the first college and $16 for each additional college.

Where To Start

Start by filing the FAFSA; right now if you have access to the required information. There is a detailed guide on filing available on Forbes. It will walk you through:

1. Who Can Apply
2. What You Need in terms of documentation
3. How To File the application itself
4. What Happens After You File
5. Additional Info on non-federal aid and scholarships

The CSS Profile

The CSS Profile allows financial aid providers other than the federal government to determine need. The CSS Profile is more thorough than the FAFSA when it comes to assessing your financial status. It will consider some assets and income excluded by the FAFSA, such as home equity and annuities. Because it is more thorough, expect the application to take longer, as well. Budget a couple hours, at least. A few more important points regarding the CSS Profile:

• You can check to see if your school requires the CSS Profile on the list provided by the College Board.
• The College Board provides a calculator to help estimate the EFC (Expected Family Contribution), a term that may be familiar from the FAFSA. However, the EFC will likely vary between the FAFSA and CSS Profile.
• Divorced parent income may be included on the CSS Profile.
• The CSS Profile may have questions unique to participating schools.
• The application fee may be waived for families below certain income thresholds.

Filing The CSS Profile

Before filing anything note that the CSS Profile requires the same documentation as the FAFSA to complete, plus mortgage information. For those filing for the 2020-21 academic year, this means that you will need your 2018 tax return and current year documentation for all supporting sources such as bank statements. So if you’ve filed the FAFSA already then you already have most of the information you need. Then, to actually submit the CSS Profile:

1. Create An Account with The College Board
2. Select Your Schools – You will need to select the school(s) to which the CSS Profile will be submitted.
3. Complete The Required Online Forms

The CSS Profile is straightforward, but detailed. There is a tour of the CSS profile and a PDF guide, but even then there can be some confusing sections if you have complex finances or a unique family situation. In these cases, you can contact the financial aid office of the school to which you will be submitting the CSS Profile, check the CSS Profile FAQ, or contact the College Board’s CSS Profile support line at 844-202-0524 (current hours at 9:AM – 6:PM EST Mon – Fri).

The FAFSA Is Becoming Mandatory For High School Grads

In 2015 Louisiana became the first state to require students apply for federal financial aid as a prerequisite for high school graduation. The policy went into effect with the class of 2018. The result was record postsecondary education enrollment by Louisiana high school graduates. This year Illinois and Texas have both enacted similar requirements.

“Almost every state is seeking to increase the percentage of high school seniors who pursue some form of advanced education, part of their overall strategy to make sure they have the skilled workers necessary to be competitive in today's and tomorrow's economy.” said Michael Nietzel, President Emeritus of Missouri State University.

California, the District of Columbia, Indiana, and Michigan are all now considering similar requirements for their high school students. Given the success of Louisiana and addition of Illinois and Texas, it would not be surprising to see additional states follow-suit in their own policies and programs. Increased participation in postsecondary education among high school students leads to a more skilled workforce which, in turn, raises productivity and GDP for the respective state.

Sources

The College Board

Federal Student Aid Office (Department of Education)

Inside HighedEd

National Center For Education Statistics

National College Access Network

The Princeton Review

This information does not constitute tax advice and is provided for informational purposes only. Please consult your tax advisor, financial advisor, local taxing authority, and/or plan provider or sponsor for more information.