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college financial aid

The Financial Aid Advisor

Help clients and their children avoid costly mistakes on aid applications. 

It’s financial-aid season, and millions of families will make mistakes when completing their aid applications in the next couple of months. To reduce the chances of committing errors, here are some filing tips for clients as they fill out these dreaded financial aid applications.

Make sure the right individuals are completing the aid form. Knowing who should file for financial aid can be trickier than you think for your clients who aren’t a traditional married couple. 

In cases of divorce or separation, the rule dictating who completes the FAFSA (Free Application for Federal Student Aid) is unusual. It is not based on which parent claims the child on the tax return or who provides child support. Only the parent with whom the child has lived for the majority of a 12-month period ending on the day the FAFSA is filed must submit the aid application. 

This rule can be a huge benefit when one parent has significantly more assets and income than the other one. 

For example, say the mother is a pediatrician and earns a large salary, and the father is a high school math teacher making much less. To increase the chances for financial aid, the father would have the child live with him for the majority of the one-year period. Consequently, he would be responsible for filing the FAFSA. 

Unmarried parents who live together must each share their income, assets and other information on the FAFSA. Not long ago, only one parent had to submit this information. This change occurred after the U.S. Department of Education decided that financial aid should depend more on the student’s relationship with their parents than the parents’ relationship with each other. 

In a fairly recent development, same-sex married couples must both include their financial information on the FAFSA. If any couple (same-sex or not) lives together and is not married, only the actual parent must submit the FAFSA. 

Don’t overlook the CSS/Financial Aid PROFILE. Each year roughly 20 million individuals file the FAFSA, making it the biggest college aid application by far. But the CSS/Financial Aid PROFILE, a creation of the College Board, is another financial aid application. Nearly 230 schools, which include many of the nation’s most prestigious colleges, use this application to determine which students will receive their own institutional money. 

Many parents may be confused as to why they have to fill out two aid applications. The FAFSA is used to determine who is eligible for federal and state grants and government loans. Nearly all public universities and most private colleges also use the FAFSA exclusively when determining who will qualify for their in-house awards. 

The PROFILE schools, however, decided that the FAFSA wasn’t thorough enough; the PROFILE asks considerably more questions. These schools use this secondary application to determine eligibility for their own aid, but they also require the FAFSA to determine eligibility for state and federal aid. 

First Come, First Serve

Make sure your clients know the deadlines. When students apply to colleges, they have multiple deadlines for filing for financial aid, and these deadlines can loom as early as the fall of their senior year of high school.

The schools with these early aid deadlines use the PROFILE, which can be completed as early as October for students who are college-bound the following fall. Students applying to PROFILE schools via Early Decision or Early Action will typically have to complete the aid form long before they have their tax documents. 

State aid programs have their own filing deadlines. Some states require the FAFSA to be filed as early as mid-February or March 1. If your clients miss the deadline, it’s highly unlikely that they will receive state assistance. 

The following 10 states currently offer money on a first-come, first-served basis: 

  • Alaska
  • Illinois
  • Kentucky
  • Nevada
  • North Carolina
  • Oregon
  • Tennessee
  • South Carolina
  • Vermont
  • Washington

Don’t assume that the first offer is the final one. Once your clients’ children receive a merit or financial aid award, they shouldn’t necessarily accept it. While colleges don’t tell families this, they are often willing to discuss granting a higher award. Except at the most elite schools, college is a buyer’s market, and most institutions worry each year about filling their freshmen slots. 

When appealing an award, parents need to be specific about what additional money they need and why, and include any documentation.

The case for more money can be stronger if students possess higher need-based or merit-aid offers from other institutions. Parents can approach a school and explain that their child would love to attend this institution, but that money is an issue and the awards are better at other universities. College staff often want parents to provide them with copies of competing awards as they contemplate extending a higher offer. n

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