CSS Profile and FAFSA: The Death and Taxes of Applying for Financial Aid

You may have heard rumors that the FAFSA, or Federal Application for Student Aid, is changing and opening later this season, and that there is even a bit of uncertainty about what it will look like. These rumors are indeed true, but all reliable sources reassure us that this complicated, old financial aid formula is inching toward unprecedented ease and fairness. If using the terms ‘government forms’ in the same proximity as ‘ease’ seems counterintuitive to you, it is. And just when you thought this was the only complicated financial aid form you would have the pleasure of completing, the CSS profile comes into view, making the mountain in front of you even steeper. Like death and taxes, these two forms are the certainties of applying to all public and about 400 private institutions in the nation.

Though I am no financial professional, I hope that the following helps to clarify the difference between these two forms, what information will be needed to complete them, and some of the benefits of doing so. I will also touch on what is changing in the FAFSA, and what that might mean for your family Let’s start with a brief overview of both forms.

Since the CSS profile opens in October and the FAFSA will not open until December (or January?) we will begin there.

CSS PROFILE

The CSS Profile is a financial aid form found through the College Board that is only required by about 400 schools in the country. It is a deep dive into a family’s financial picture and gets quite specific. The CSS is linked to INSTITUTIONAL AID, or aid from the colleges themselves, NOT the federal government. The positive here is that these institutions have more money to give away than the feds do.

Some popular colleges that require the CSS are Rice, Baylor, TCU, Southern Methodist, Arizona State, Carnegie Melon and Duke, just to name a few. Click here for a complete list. You will need the following documents handy to complete the CSS:

• Most recent tax returns

• W-2 forms and records of current year income

• Records of untaxed income and benefits

• Assets

• Bank Statements

The CSS profile considers other facets of the financial picture, including home equity, medical expenses and additional education expenses. Each college may require slightly different information, so pay attention to details. Like the FAFSA, students need to complete the CSS every year they want institutional financial aid. The CSS also may require information from the non-custodial parent and stepparents.

For the pleasure of filling out the CSS profile, families will pay the low, low price of only $25.00, for the first college, and $16.00 for each additional college. That’s right, you pay to fill out the CSS unless your adjusted gross income is less than 100k per year, in which case, fee waivers are available.

There are, however, a few advantages to the CSS, in that families can highlight extenuating circumstances such as elder care, other educational expenses, COVID related hardships, etc. Another is that the supporting colleges tend to have more money to give away than the federal government, so the potential for students to receive aid is significantly greater. Though the schools that require the CSS tend to be those with higher prices overall, their high sticker price leaves room for markdown (what a sales strategy). Not everyone pays full retail, so it is advantageous to search for the discounts that may well apply to you.

FAFSA

The FAFSA, or Federal Application for Student Aid is how families apply for college assistance from the FEDERAL GOVERNMENT. Technically, most families who fill out this form are eligible for financial aid, if only in the form of federal student loans. The FAFSA needs to be filled out every year the student is in college and will snapshot the financial picture from two years prior to the student entering college. Though some states and school districts require FAFSA completion as a graduation requirement, is not mandatory that students complete it. Let’s begin with a few fun FAFSA facts:

1. Though FAFSA completion is not required for any student, it may be required by the individual college in order to be considered for scholarships.

2. Millions of dollars are left unclaimed every year by families who choose not to fill it out.

3. FAFSA determines eligibility for Pell Grants, Federal Subsidized and Unsubsidized loans, and Federal Work-Study programs.

4. The FAFSA is changing this year, and nobody has seen the new format yet. In theory, it will be simpler. Look for the FAFSA to open in December (or January).

In future years, the FAFSA will be open in October as it always has. Like with application deadlines, there are also FAFSA deadlines, so take a careful look at due dates as you would for admissions and scholarships.

Some very important changes to the FAFSA include:

• Terminology: The EFC (Estimated Family Contribution) is now replaced with SAI (Student Aid Index)

• Multi Factor Authentication: Students and parents need the FAFSA ID before starting the FAFSA. This may take 3-5 business days. DO NOT FORGET TO SAVE YOUR FAFSA ID. This backup code will only be given once. Please write it down or tattoo it on your forehead!

• Direct Exchange: Data is now directly exchanged between the Department of Education and the IRS via W2 forms. Students do not have to see the parent’s financial information. You must, however, authorize the FAFSA to access your info from the IRS.

• FAFSA no longer considers the number of children a family has in college at once.

• In the case of divorced or separated parents, the parent who provides the most financial support will fill out the FAFSA.

A list of assets that you must include on the FAFSA include:

• Vacation home and investment properties

• Adjusted net worth of businesses

• Stocks and Bonds

• Adjusted net worth of family farm

• College Savings accounts

Assets not included:

• Family home!

If the student has filed taxes, they will also need to consent to have their tax information provided to the Department of Education. In the name of simplification (also called the FAFSA Simplification Act), the FAFSA is generally shorter and simpler in most cases. I won’t hold my breath that it will cause less stress.

What both the FAFSA and the CSS have in common is that they are the necessary hurdles to receiving both institutional and federal financial aid. My best advice is to get started early and be prepared to ask all the questions you need to.

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Bonnie Kleffman, M.Ed., GCDF is the College Consultant Director at Access College America, a college planning agency in Austin, Texas. Learn more by visiting https://www.accesscollegeamerica.org/.