Financial Aid is Available in Many Forms
By Howard Freedman - President of Financial Aid Consulting
Many students and families associate financial aid with the FAFSA (Free Application for Student Financial Assistance) as the only form needed financial aid. Though they may feel relieved once the FAFSA is initially completed, they should realize that this is only the beginning and not the end of a more lengthy financial aid process.
The most critical aspect of the financial aid process is to be in control. That means, understanding the financial aid requirements and deadlines for each college. The first step is to create a calendar or spreadsheet with the name of the college with critical college application and financial aid priority filing dates. This is the start of the roadmap that will relieve much of the stress and provide an ongoing status of how things stand. Be sure to include the key dates due and space for when they were completed.
Financial aid forms can be intimidating and overwhelming. Yes the forms have become more user friendly, yet there is no way of proving the accuracy of the source data or how it was entered on the form without further verification. Like a 1040 tax return, the FAFSA is free, and should be no problem to those is able to fill in the blanks. The greater challenge is the form but knowing how this information is used and its impact on the financial aid (discounted amount) awarded.
The Forms
The financial aid priority filing dates and required financial aid forms will vary by college. Usually most state schools only require the FAFSA. Here are many but not all of the financial aid forms that you are likely to encounter:
The FAFSA (Free Application for Federal Student Aid) is the primary need analysis form for federal state and some college’s financial aid. The result of the FAFSA is the EFC (Expected Family Contribution), the calculated amount a family should be able to contribute to the student’s education is electronically. This and other information is sent to each college listed. The FAFSA which is available on paper or on line for submission starting on January 1st is normally submitted at the time of application (after January 1st) when more financial aid funds are available. The FAFSA requires last year’s earnings (example 2007 earnings for September 2008 enrollment) and the student and parent’s assets. Since employer W-2 forms are not usually available by January 1st, that information for the FAFSA can be based on final payroll check stubs, prior year’s tax returns and best estimates that can be adjusted later when these forms are available. The FAFSA is also a work in process that can be updated for corrections, added colleges, changes in employment, family status, etc that may impact your EFC. Once the student is accepted to a college, the FAFSA data will be used as a basis for the financial aid award.
SAR (Student Aid Report) is produced each time the FAFSA is submitted. It is the edited version of the FAFSA after that information is processed. It also serves as a worksheet for changes, to report errors and provides some financial aid eligibility.
CSS/Financial Aid Profile, a service of the College Board is used by many private colleges and scholarship programs for institutional private aid. This from unlike the FAFSA is available in the fall of each year before the FAFSA. It asks more detailed questions and explanations such as past, present and projected incomes, home value, etc and calculates the Expected Family Contribution using a different methodology than the FAFSA to determine how the family should be able to contribute to educational costs.
NCP Profile (Non Custodial Parent) is an on line form offered by the College Board used by some colleges to measure a family’s ability to pay for college when the birth/adoptive parents do not live in the same household. The NCP may be needed when the student indicates on their CSS/Financial Aid Profile application that their biological or adoptive parents are separated or divorced. If so, an e-mail will be sent to the non custodial parent with secure log in and submission procedures. The NCP profile can also serve to justify their actual additional expenses, family obligations, etc to support the fact that they cannot provide further contributions.
Non Custodial Parent’s Statement is used by some colleges for students with separated, never married or divorced students for awarding financial aid.
Business Farm Supplement: The CSS/Financial Aid Profile may also require parents with small businesses or farm or self employed to provide profit and loss and balance sheet information for determining the college’s financial aid or institutional award.
Institutional Forms: Many colleges have developed their own financial aid forms asking specific questions similar to the CSS Profile. Each form may be required in addition to the FAFSA and CSS Profile
Award Letteris the financial aid package a college offers. Most award letters consist of scholarships, loans, grants and work study. It should report the Cost of Attendance (COA) less financial aid, family contribution and unmet need (amount left), if any. The financial aid award should be clearly scrutinized, compared to other awards and for determining the best deal and least out of pocket expenses.
MPNMaster Promissory Note (MPN) is a required promissory note that is used for all direct Student and Parent Loans for up to 10 academic years. First-time borrowers must also pass the online quiz that explains types of loans, responsibilities and repayment options, rights and resources.
Verification Worksheet: many colleges select or are required to verify actual and other financial documents to their completed financial id forms. This verifies the accuracy of the information and its impact on the actual financial aid award.
Appeal Letters: Financial aid awards can be appealed. Many colleges require a letter of explanation or may use their own forms. It is critical to provide sufficient back up data and whether the appeal is worth your effort. Always be sure that the FAFSA is up to date and if any special circumstances (job loss, reduction in hours, etc.) are reported to the financial aid office.
Finally, follow these guidelines.
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Track critical dates and forms required by each college
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Post completion dates to calendar or spreadsheet
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Call colleges to follow-up about exceptions
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Remain focused and in control.
Howard Freedman is financial aid consultant serving clients across America. He can be reached at at www.financialaidresults.com
