College Financial Aid Basics

We’ve posted longer articles about college financial aid, but in this post, I just want to cover a few quick points:

  1. There are 2 kinds of college financial aid:  NEED-BASED aid and MERIT-BASED aid.  Need-based aid is based on a government formula that will determine how much you can afford, based on your income and assets.
  2. The Free Application for Federal Student Aid (FAFSA) is the first step towards applying for need-based financial aid.  When you fill out the FAFSA, you’ll get a reply within a few days which will tell you the result of the formula, which is called your Student Aid Index (SAI).  This is the amount you are expected to contribute towards your child’s education EACH YEAR.
  3. The FAFSA (and the CSS Profile, see below) typically open for each senior class on October 1.  For the high school Class of 2024, the FAFSA will not open until December, 2023.  You CANNOT BEGIN the FAFSA process before it is officially open, but you CAN create your FSA ID (see next step).
  4. Both the student and the parent will need to create an FSA ID first.  After the FAFSA opens on December 31, you’ll use your FSA ID to can create and access your FAFSA account.
  5. You can get a feel for what your SAI might be (it’s almost always higher than you think it should be) by using this practice calculator.
  6. When the FAFSA is open, READ THE DIRECTIONS!  The real FAFSA should take you less than an hour.  Here’s a list of the things you’ll need to fill it out.
  7. About 250 colleges require an additional document called the CSS Profile, which probes more deeply into your family’s financial situation.  Your SAI at colleges that require the CSS Profile may be higher than at colleges that use only the FAFSA.  Here’s the list of colleges that require the CSS Profile.
  8. Your financial need will be different at different colleges, because need is the total cost of a college (tuition + room & board + transportation + books + other expenses).  You may not have a demonstrated financial need at one college (in-state public, for example), but you may have demonstrated need at another.
  9. Need is determined by this formula: COA-SAI=NEED.  It’s the gap between what each college will cost and what the formula shows you can afford.
  10. Again, you’ll need to set up an FSA (Federal Student Aid) ID to get started.  Both the student and the parent need their own FSA ID.

This other post has much more information about college financial aid, but the above was just to get you started!

Best of luck on your journey navigating the college admission process!  Let us know if we can help.

 

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