Don’t Get Intimidated by the Process
File FAFSA right after January 1st
CSS Profile Requirements
Strategies to Lower EFC
Useful websites to lower EFC
Financial aid is confusing. It’s even worse than income taxes. According to the American Council on Education, in 2006, 1.8 million students who would have qualified for federal and financial aid failed to apply. There is no reason to be among that number.
The fundamental precept of financial aid is filing the FAFSA as soon after January 1st of senior year as possible. The whole idea is to be at the front of the line when scholarships and grants are being allocated. At most of the public schools, including the University of California system, only filing the FAFSA is required. This vastly simplifies the process. Filing solely by the federal method (FM) makes applying to state schools almost a pleasure.
For private schools the process is often trickier. Many use, along with FAFSA, the CollegeBoard’s CSS Profile. Certain private schools even include their own financial aid form. This means some private schools require three financial aid forms; worse, all might be cross referenced to ensure responses jive. Inaccurate submissions might be rejected, and, as a consequence, though financial aid forms were initially filed prior to deadlines, the application might be shot to the back of the line.
Northwestern’s undergraduate financial aid website, www.ug-finaid.northwestern.edu, contains a financial aid calculator to estimate financial aid packages, and links to the FAFSA, CSS Profile, and Northwestern’s University Aid Application. There are also over a dozen other forms including, if things didn’t work out, the financial aid appeal application. It’s a world onto itself with deadlines, glossaries, and forms that would almost make the IRS proud.
Don’t however be distracted by the forms, the deadlines, and the calculator. The central purposes of the financial aid exercises are to attain as low an EFC (effective family contribution) number as possible, and to fill the gap between what you can afford to pay and your EFC with generous scholarships and grants. Anything else is noise.
The CSS PROFILE (also called the institutional method—IM) includes in its calculations the applicant’s home equity, non-custodial parent’s income and resources, outside scholarships, money held by other siblings, the applicant’s potential summer earnings, even whether a rich relative might be willing to throw bags of gold at the entire admissions process (if an applicant is willing to volunteer such information). The PROFILE wants to know everything about the past, present, and future of an applicant’s resources. However, it’s not completely cold blooded; if another sibling is paying private school tuition, or the family had excessive medical expenses not covered by insurance, these might be deductible.
Whether you’re applying to a school that is using CSS Profile (IM), or the FAFSA (FM), you might try the following strategies. Each is labeled by whether the strategy is appropriate for the FM or IM:
Use assets to pay off debt: having debt does not help you qualify for aid, so pay it off (IM) or (FM)
Move assets from student to parent account: Parents are expected to pay 5.6% of assets while students 20% (FM)
Make necessary large purchases before base year (the base year is a student’s junior year beginning in January) (FM) or (IM)
Reduce Base Pay in your job or delay any commissions during the base year (FM) or (IM)
Avoid capital gains: selling major stock holdings during the base year will increase your revenues—something you want to avoid (FM) or (IM)
Start a Home business: you can cut your current pay and reduce personal assets by investing in a home business (FM) or (IM)
Pay off your mortgage: if the school uses FM you will qualify for more aid should you pay down your mortgage. (FM)
Websites that might be useful in helping to qualify for the greatest amount of aid include TuitionCoach and FinAid.org. What really matters in the process is staying focused on getting the lowest EFC and the most scholarship and grant monies available. A good reference for estimating what the school has paid in the past can be found at College Navigator. Future tuition bills, though, can very much be affected by your actions now.