USA Financial Aid

FAFSA (Free Application for Federal Student Aid) & CSS Profile

There are several financial aid forms for US citizens and for international students, the main ones are:

• USA Citizens: FAFSA (Free Application for Federal Student Aid). The FAFSA changed for the 2023-2024 application cycle. Typically the advice is to file the form as early as possible after October 1, as students must meet school deadlines in order to receive certain types of funds. For the 2023-2024 and 2024-2025 application cycle, follow the filing guidance within the Financial Aid pages of your particular university as the new FAFSA form will not be available by October 1. Consider using the Federal Student Aid Estimator to help determine what aid might be available to you.

• Everyone: Collegeboard CSS Profile is used by many colleges and universities to award their own private funds can be submitted electronically as early as mid-September. 

International students need to be aware that although there are government-sponsored and institutional financial aid programs, the cost of education in the United States is primarily the responsibility of the student and of the student's family. A few colleges have financial aid for students from outside the United States, but this aid is not enough to meet the need of all students. International students (Non-US Citizens) do not file the FAFSA but might be requested to complete the CSS Profile. These forms are private and must be filed directly by the family. The Universities Admissions Office does not file financial aid forms.

Aid from most of the major federal programs is awarded on the basis of financial need. When you apply for federal student aid, the information you report is used in a formula, established by the U.S. Congress that calculates your Student Aid Index (SAI), an amount you and your family are expected to contribute toward your education. Your SAI is used in an equation to determine your financial need as follows:

Cost of College Attendance minus Student Aid Index = Financial Need.

There are three types of federal financial aid:

• Grants are monies that you don't have to pay back.

• The Work-Study Program provides jobs for students allowing them to earn money to help pay education expenses.

• Loans are borrowed money that you must repay with interest.

The FAFSA produces the family's primary expected contribution figure, which will establish eligibility for federal student aid and, in most cases, state student aid. Some schools, especially the more expensive ones, may want additional information to determine your eligibility for collegiate awards. These schools will ask the family to file the PROFILE or an institutional aid form or both. Read each school's financial aid information carefully to determine which forms to complete. 

In general, all U.S. citizens should file the FAFSA, others will have to file the FAFSA and the CSS PROFILE, and some will have to file the FAFSA, the CSS Profile, and a separate institutional aid form.

Student Aid Index (SAI)

The SAI is a new term for the 2023-2024 application cycle. This used to be called the Expected Family Contribution (EFC).

The 'SAI' is the official term for the amount of money a family must contribute to college costs. Understanding how to figure this contribution is the key to formulating your entire financial aid strategy. For a dependent student, it's the sum of four separate calculations: the contribution from parents' income; the contribution from parents' assets; the contribution from the student's income, and the contribution from the student's assets. Most of the money available for student assistance comes from the federal government, the exact formula for calculating family contribution is prescribed by Congress and is called the Federal Methodology. Let's look at these factors one at a time.

• Parental income includes taxable and non-taxable sum from the year preceding the award year. From that, families subtract an income protection allowance - money for food, rent, transportation, and laundry. The bigger the family, the bigger the allowance. Also subtracted are federal income taxes, social security taxes, and variable allowances for state and local taxes. Finally, families receive an employment expense allowance. What remains is called available income. It is multiplied by a percentage that ranges from 22% to 47%. The higher the available income, the higher the percentage.

• Parental assets include the value of stocks, bonds, trusts, savings accounts and business assets as of the date you sign the form. From that, parents subtract an asset protection allowance - a sort of nest egg for the golden years. The older the parent, the bigger the allowance. What remains is multiplied by approximately 5.6%. Families with adjusted gross incomes who are eligible to file -a 1040A or a 1040EZ need not include the value of their assets when calculating family contribution.

• Student income. Students add up all their income and subtract their federal income taxes, social security taxes and a variable allowance of up to 7% for state and local taxes. Students may also subtract an income protection allowance. Students might be expected to contribute 50% of everything over that amount.

• Student assets. Students add up all their assets. They rate no asset protection allowance. Families must contribute to their value. This is a good time to note the difference in the way student and parent assets are assessed. Again - 20% of all the students' assets must go toward college costs compared to about 2.6%-5.6% of the parents' assets after they subtract an asset protection allowance (2019/20 rates).

Special Situations

While every family situation is unique, there are two ‘common’ special situations that probably affect many people.

The first applies to parents who are divorced or separated. In this case, students use the income and assets of the parent with whom they lived for the greater part of the twelve months preceding the date of the financial aid application. If the parent has remarried, the stepparent's income and assets must also be included for need analysis just as though he or she was a natural parent.

The second applies to families with two or more family members in college at the same time. In this case, the parental contribution to college costs may be divided by the number of family members (including parents) who are in college at least half-time. For example, if Jane and John Smith are both in school, each will have a separate family contribution figure consisting of half their parents' contribution from income and assets plus their own contribution from income assets

Tips

• Know which forms to use. If you are applying to a more expensive school, you will probably also have to file the College Board's Profile and the college's own aid application.

• Apply as early as possible. Colleges tend to run out of campus-based aid rather quickly.

• Be as accurate as possible when filling out forms. Errors cause delays, or an inaccurate assessment of your ability to pay. By the time you correct the information, some of the money may have run out.

• Be ready to back up the data on your aid application. Financial aid administrators verify the data submitted of all student aid applications. In other words, they will want to examine copies of your tax return. If the numbers on your aid application and your tax return don't tally within a certain, small tolerance, you will be asked to explain.

• Make copies of your aid application and your signed tax return.

• If the student is male, he must register for the draft.

* Make sure you are aware of the State Residency Requirements if you are applying to schools in your home state (i.e. California, Texas, etc...).

These are some excellent resources for further information about financial aid options:

• Collegeboard has a great section related to overall college costs (and a scholarship search)

• College Scorecard can help with determining average student debt, etc.

• Fastweb has excellent searches as well as articles to help explain the process

• International ACAC Resources - especially the Nonresident Undergraduate Alien Financial Aid Chart

• If you are a US citizen, then become familiar with FAFSA, including the Federal Student Aid Estimator