There are two kinds of financial aid provided by colleges – merit aid and need-based aid. For most colleges, what a student submits in the college application is used for merit awards (grades, test scores, extracurricular activities, etc.). Some colleges might have additional forms for merit aid. Merit aid is usually in the form of grants and scholarships, which don’t need to be repaid.
Need-based aid is awarded based on information provided on the Free Application for Federal Student Aid (FAFSA). The FAFSA is free to submit. Some colleges also use either an additional institutional form or the CSS Profile (which costs money to submit) to give them more details about a family’s financial situation. Need-based aid can consist of grants (“free” money from federal or state government or the college itself), work study (work for it), and loans. By filing the FAFSA your student and family can take advantage of the federal loan programs, which almost always have lower loan rates than private loans from banks.
The FAFSA form can be completed online AFTER Jan 1, 2016, and you can use estimated tax information, then update when you complete your taxes. If your taxes are already done when filing the FAFSA you can use the IRS Data Retrieval tool that will link your tax form with the FAFSA and pull over the financial data from the IRS so you don’t have to input it. Prior to filing the FAFSA, the student and one parent need to create a FAFSA ID. Make sure you select “Start a NEW FAFSA” for the 2016-2017school year when you start the FAFSA for the first time.
The CSS Profile is a College Board product so a student uses their log-in credentials that they use for their SAT account, if they registered for an SAT exam. Each college that uses the CSS Profile has its own list of questions, so the student needs to select those schools which use the Profile, and a unique form will be created based on the specific colleges’ questions. Deadlines for Profile vary, check colleges’ websites for verification.
If your student receives need-based aid or federal loans for the first year in college, he will need to file the FAFSA each year in college, for the following year.
The federal government will be implementing a change to the FAFSA filing process that will come into play for your student when filing for need-based aid for the sophomore year. You and your student can began submitting the FAFSA for 2017-2018 in October 2016 (so yes, just a month or so after they’ve started their freshman year)! You will be able to use prior year (2015) tax information. Since most families will have already filed their taxes for 2015, they can use the IRS Data Retrieval tool that will link the tax form with the FAFSA. This will make filing out the FAFSA much easier, quicker and more accurate.