kitchen table math, the sequel: FAFSA, CSS Profile, and I'm going to shoot myself

Wednesday, January 15, 2014

FAFSA, CSS Profile, and I'm going to shoot myself

I have been putting this off for too long, but now it's nearing completion, although we will have to update the forms when the 2013 numbers are known. Some say that it's better to get the applications in early, but when does financial aid know whether someone has been admitted or not? I suppose they just crank the numbers through a formula so they just do it for all applications. Some schools say they are need blind, but what happens when they crank the numbers for those who are admitted and it comes out too high? I read an article that says that this is a problem for many schools. I don't know how that works if their yield is at 50%.

I like how they all assume that the student is filling out these forms. "You" means the student. Right.

All of my son's schools (save one) require the CSS Profile along with FAFSA. When we went to info sessions, they all talked about how little we might have to pay, even if we make pretty good salaries. There is a potential (no loan) benefit if you get into one of the rich schools, but that doesn't mean that your EFC will not require loans. Also, I don't like how families who are savers get hurt more than families who are not. Although FAFSA doesn't see retirement savings, the CSS Profile schools get those numbers. We should have taken trips and cruises instead of saving.

They also ask you how much you are willing to pay each year towards your child's college education. Um, zero? Is this a trap for the gullible? We should have paid more attention to those full ride offers from other universities. What is the future value of $100K not spent?

Any comments from experienced parents to us financial aid "newbies"? The one I learned too late is that some colleges require early financial aid information for Early Action. Fortunately, the one that my son chose was one of the few that had a late EA financial aid deadline. He was deferred so it was moot. Our high school had an open meeting about FAFSA, but said little about the CSS Profile.


Anonymous said...

I opened up KTM today and your post gave me a chuckle. My senior son wrapped up his applications over Christmas break and last night my husband and I sat down to crank through the last sections of the CSS Profile ahead of tonight's deadline for a few colleges. I too felt great remorse at the vacations not taken, the fancy cars not purchased, the dinners out that did not happen. Parents who have scrimped to make sure there is money in the bank are so disadvantaged in this process.

Hainish said...

Steve, if your kid has a parent (you) filling out the FAFSA for him, he is lucky. Very lucky. Just remember, when you grouse about the intended referent for the pronoun "you," that some of us were not as fortunate. Nobody filled out my FAFSA for me. If it's confusing and overwhelming for you (and I believe you when you tell me that it is), imagine how it must be for an 18-year-old who seeing the term "amortization" for the first time.

Anonymous said...

A friend of mine who is a teacher, but saved and scrimped and has her mortgage paid off, quickly realized that she should have taken a huge loan out or gone into debt so her daughter would have a chance at something.

Another friend of mine is completely broke and in foreclosure. Saved absolutely nothing for retirement. Spent years living above her means. Daughter got college paid for. Not that I'm against her getting help....

I think it was Andrew Ferguson that wrote about how they know everything about you financially so they're in a rather good position before they stick it to you.

We hired someone to fill out our son's FAFSA. So have most of my friends except one. I believe you do it every year, correct?

I try to stay out of it. I've informed my husband that I was the K-12 parent. It's all on him now, except for the care packages.


lgm said...

Ah, you were supposed to have retired in the year before the base income year, to a very expensive home that would befit someone of your station (and allow you to carry a hefty mortgage). While your son is in college, your spouse and you attend at the same time, to upgrade your skills for the business you'll start as soon as the last financial aid check clears.

debbie stier said...


I was reading this post via email and it didn't say who posted it ... and I knew within a paragraph it was you!

Oh, I feel your pain. You have no idea how I agonized over these forms last year. I'm praying it will be easier this year now that I've done it once before.

Last year I had everything in by 1/1 even though I hadn't done my taxes, which meant I had to go back and do more stuff once I did my taxes.

This year I'm not doing it all at once, AFTER taxes are done.

The two books I'd recommend are The Princeton Review book, Paying for College Without Going Broke, and Lynn O'Shaughnessy's books (both of them).

SteveH said...

That sounds about right. One also has to reduce assets to pay off all (non-mortgage) debt. Clearly, it's better to pay off regular debt that to pay off your mortgage early.

Princeton's own form wanted to know what scholarships we "expect" or "anticipate". I told them that all we can do is "hope". They told me that if he gets admitted and he accepts, he will be sent a form to fill out for scholarships in May. We want our son to work hard and apply for all of the scholarships he can, even knowing that the college might use those to just reduce our financial aid package.

That makes me think of the National Merit Scholarship. About 15,000 get to be finalists, and about 8000 of them get money from some source. Which schools get these students? Also, these students probably come with a bunch of other scholarships too.

So, we parents get hurt because we are savers, and our son gets hurt because he is a good student who will apply for as many scholarships as possible.

Has anyone heard of admittance being influenced by how much scholarship money you might bring in? I don't know if I believe them when they say that admittance is need-blind. It may be unspoken, but I don't think it's blind.

SteveH said...

"This year I'm not doing it all at once, AFTER taxes are done."

It's hard to know what matters in the pre-admission stage (10 colleges!), but I'm sure that we will wait until the taxes are filed next year.

We have planned and can pay for his college, but it's too late to try to minimize the result. With CSS, I don't think you can do that, and besides, we wouldn't do that. Now, we have to wait to see what the damage will be. Does anyone know how accurate the college estimator programs are? I haven't tried one yet. Are they typically better or worse than the final offer?

Since we are older, we just shoved most of our savings into IRAs and 401K accounts. Maybe Roth accounts would have been better because the totals would be smaller. I don't think CSS makes a distinction between the two, but it could be huge. If we have to take money out of our retirement accounts, we will first have to pay tax on the money. While we are still working, that would be onerous. Better yet would be to use our equity line of credit and that would make us look poorer next year. Then, when we do retire, we will be in a lower tax bracket and taking money out of our retirement accounts will cost us less.

I wish I could see the exact formula so I could judge the sensitivity of each variable.

Crimson Wife said...

At least back 20 years ago, parents who could afford to hire clever accountants were able to get generous financial aid for their children while regular middle-class families who actually needed the aid more got screwed over. Not sure if the colleges have wised up to the schemes, but it might be a good idea to discreetly ask around.

gasstationwithoutpumps said...

Most of the National Merit aid is from colleges, so the National Merit scholars are at colleges who bought them. Most of the rest of National Merit scholarships are from companies who pay for their employees kids. Do you work for one of those companies?

I tried a few of the net-price calculators, and got wildly different results. Either the support from the colleges my son is applying to varies by about $20k a year, or the calculators are just providing random numbers. It's all fantasy until the college makes an offer.

I was going to do the FAFSA 2 days ago, but managed to waste the entire day without doing the hard part (which is filling out income tax forms). The FAFSA looks easier than income tax, which in turn is easier than the CSS Profile, which I filled out in October, when my son was still planning to do early admission at one college (the only college that asked for CSS).

Grace said...

Retirement plan assets (IRAs and 401K accounts) are not counted in either FAFSA or PROFILE.  But the more information the schools have, the more leverage they have in deciding if you can "afford" to pay.

On the CSS Profile, retirement plan asset values do need to be reported along with current-year plan contributions. But again, the retirement asset values do not get included in the Institutional or Consensus Methodology’s calculation of EFC. So why then does the CSS Profile ask for retirement plan values?  In a case where a financial aid officer has to make a judgment call (professional judgment) about adjusting a student’s EFC due to unusual circumstances like loss of a job or excessive medical bills, he or she may use the information about retirement accounts to assess the family’s overall financial well-being.

This Forbes article has more details.

SteveH said...

There are also National Merit $2500 Scholarships

"Every Finalist competes for these single payment scholarships, which are awarded on a state representational basis. Winners are selected without consideration of family financial circumstances, college choice, or major and career plans."

These are for those who don't get college or company ones. Apparently, about half of the finalists get something.

palisadesk said...

One of the best college scholarship deals is the Jefferson Scholarship at the University of Virginia. See:
Jefferson scholarship

It covers everything, room, board, tuition, additional living and travel expenses. My nephew turned down Princeton (where he was offered some financial aid) to accept the Jefferson scholarship. The cash value of it amounted to close to a quarter million over 4 years. My nephew had a fabulous experience there, subsequently started a very successful tech business and is doing quite well, and had no college debt to pay off.

The scholarship is quite competitive but candidates do not have to be residents of Virginia.

Anonymous said...

I think that UNC Chapel Hill has a similar program and I know that the University of South Carolina, Columbia, has an outstanding Honors College (not limited to freshman-sophomore courses)and many scholarships. Out of staters with an Honors College scholarship, even small ones, get a tuition reduction that essentially gives them the in-state rate.

SteveH said...

Apparently, FAFSA shows your college list to all of your colleges, and puts them in the order in which you entered them. Some colleges use that to determine your college rankings and interest. I filled out the FAFSA form and put them in geographical order before I read about this. At least it doesn't make sense in terms of priority. Some say to put the colleges in alphabetical order.

So, our CSS and FAFSA stuff have been submitted (with estimates for 2013) and now I'm getting emails about IDOC verification even though I just got the last of my tax forms and am rushing to get our taxes sent out. How long will it be before it's in their system?

Then there are all of the mid-year reports (transcripts, mostly) that have to get sent out and any updates about amazing new things the student has done. The Common App handles the transcripts (via the high school), but one of his colleges has it's own system, and some other schools have given him IDs and log-ins to their schools. He has to see if there are things he needs to do there to show his love. I wonder if they check to see how many times you log in?

This is what MIT has for its midyear report (in addition to self-reporting grades).

"In the text box below, please update us on any changes or updates since you submitted your application. This might include new activities or awards, changes at home, or anything else important and relevant to your application. Also, if you have any changes in your curriculum since you submitted the application, please note the changes below. (250 words or fewer)"

"We prefer to receive your updates via this form rather than mailed or emailed updates."

"Don't have any updates? No problem! Many students don't. Know any good jokes or have a favorite inspirational quotation instead?"

My view now is that colleges care a whole lot about maximizing their yield at this point. Even Harvard and Stanford only get 75% of the students they admit, and that's after all of their likely EA admits.