For anyone who has a senior in high school, October 1st takes on special significance. That’s the day that the US Department of Education releases the new Free Application for Federal Student Aid form to apply for financial aid for college.
The FAFSA is used by most public and many private colleges to determine eligibility for need-based aid. It should be filed as soon as possible after October 1st of a student’s senior year. Filling the FAFSA early can help maximize the potential for aid as colleges tend to use up their aid as the year progresses.
The form is comprehensive, requesting detailed income and asset information about the student and the student’s parents. This information is used to calculate the student’s Expected Family Contribution (EFC). The EFC is the amount that a college expects the student to contribute towards college expenses. Once you have calculated the EFC you can then subtract it from the Total Cost of Attendance to get your Demonstrated Need for the particular college. The higher your Demonstrated Need, the more likely you will receive an attractive aid package.
However, few colleges will meet 100% of your Demonstrated Need. That’s why you need to carefully consider which colleges to attend and look at multiple sources to meet the cost of college.
As we say in the Boston area, college is “wicked” expensive and that means planning ahead and getting an early start on understanding your EFC.
You can complete the FAFSA by going to www.FAFSA.ed.gov. You’ll need your 2018 tax return and additional financial information. If you want to get a head start this weekend, download last year’s form and use it as a guide to gather and organize your financial information. When the new form is available on October 1st we recommend completing it online. You’ll need to set up an i.d. for both student and parent so that you can electronically sign the form.
Note: Even if you are not expecting to qualify for Need-Based Aid, you’ll need to complete the FAFSA in order to obtain federal loans.
The FAFSA gets all the attention but the CSS Profile form is the other financial form that is used by many private colleges and universities - https://cssprofile.collegeboard.org/ This form is also available online on October 1st. You’ll need to look at the schools that you are applying to see which form (or both) is required by the college.
Questions about how to get started with the FAFSA? Give us a call; we’re here to help.
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client after entering into an advisory relationship. Information herein includes opinions and forward-looking statements that may not come to pass. Information is derived from sources believed to be reliable. Information is at a point in time and subject to change without notice. Such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.