If a student is accepted by their first-choice college and that college uses the College Board's CSS Profile, a financial aid offer will be made around that same time. Due to the delay on the new FAFSA until late this month, any state and federal aid included in the offer would only be estimate (see OMG!!! Where is the FAFSA?)

Will Early Decision Really Cost Me?

I don't want to get too deep into the weeds on this subject, so perhaps the mile high view will be good enough... for now anyway.

The rule of thumb is if a student applies and is accepted to an Early Decision college, they lose the opportunity to compare the financial aid offer with others. While this is true, most of the colleges offering Early Decision are the more to most selective (colleges with selectivity rates below 35% a/k/a the Ivies and Elites) and meet a higher percentage of financial need.

Financial need is determined by a complex formula that tells you the least amount of money you could pay at any college. This is known as the Student Aid Index (SAI).

With a few noteworthy exceptions, the SAI is like the old Expected Family Contribution (EFC) and works like this:

Grants and loans are then deducted from the Financial Need, and when added to the SAI giving you a Cost of Attendance.

Depending on a parent's Adjusted Gross Income, elite institutions like Stanford, Princeton, Columbia, Yale, University of Chicago, Harvard College, MIT, Duke, UPenn, and Brown offer free tuition if you meet their income limits. If a student is applying to any of these schools, they most definitely want to file the FAFSA and CSS Profile aid forms.

What Is Fair?

By and large, colleges offering ED are likely to offer fair aid packages. Of course, fair is how the college defines it. Because income information submitted to the school is from two years prior to the start of the Fall semester, finances that have changed for the current year, or will the next year and are not accurately represented, should prompt a parent to write an appeal.

If a family's financial need is low (income and assets being too high to qualify for need-based financial aid, like grants) applying ED causes the loss of being able to compare. Many Ivies and Elites don't offer merit scholarships, so you could end up being what is known as a Full Pay. If you had the opportunity to compare offers, you could try to persuade the college to sweeten the pot (insider's language) with more free money.

Given the extremely high sticker price of college, most parents paying for college do not want to pay full price. If your student doesn't get accepted to ED, you could count yourself lucky because now you can be in a better position to pay less than you might otherwise.

OMG!!! Where is the FAFSA?

A few weeks ago, the Department of Education announced that the Free Application for Federal Student Aid (FAFSA) would be available by December 31st. In real terms, that means December 31st or January 1st. They also said that the colleges would not be able to receive students' financial aid data until the end of January or early February. This is causing a panic. And the media, who always need another disaster to report, is fueling it.

The media-- and in all fairness, not just the media, but mostly-- reports that students won't have enough time to gather all the information they need to complete the FAFSA. Colleges won't have enough time to generate aid offers like they used to and a panic that students won't have enough time to evaluate their offers.

Let's take a closer look:

It wasn't that may years ago that the FAFSA opened for business on January 1st. The idea that students won't be ready to file their FAFSAs is ridiculous. In reality they've been given a three-month extension! They should've already gathered the documents they need to complete the FAFSA and applied for their Federal Student Aid IDs so they can sign it.

The other issue of the colleges not receiving the financial aid data shortly after the student submits their FAFSA is also overblown. Many colleges download data every few weeks, and in short bursts so they don't get overwhelmed.

A little perspective and common sense seem to be missing from all of this.

It's understandable that delays will make it harder for students to get aid offers immediately. But the most selective colleges don't make their offers until the very end of March or early April anyway. So, waiting shouldn't be such a burden. In fact, I wouldn't be surprised at all if what happened during COVID-19 happened again this year: the May 1st National Decision Day could be delayed by two to four weeks, giving students and their parents more time to decide.

As a member of the National Association of Student Financial Aid Administrators, I feel for those having to deal with massive changes, all the new rules and hundreds of new regulations. If anything breaks this year, it will be those hard-working folks in the financial aid offices. If you do interact with a financial aid person, be patient, be tactful, respectful, and kind. By acting like a "person" you might get what you want-- if not what you need.

With the changes made to the FAFSA and the delays in being able to your SAI and what, if anything, you can do to lower it before you submit the FAFSA, There are a number of "lemons" in the new FAFSA which have been covered in previous newsletters. The good news is that I may be able to help you turn some of the lemons into lemonade! The practical benefit to you may be thousands of dollars of savings on your out-of-pocket college costs! Contact me at 330-345-5000 or jmyoung@whitakerwealth.com to schedule a meeting BEFORE you complete and submit the FAFSA. 

This month, a question was asked of me that I thought might be of general interest to parents applying for financial aid.

Q. I am the guardian (and a widow) of my grandson. His parents have no money to give me for his support. Do the colleges expect me to pay for his college education?

A. A student is considered independent if a court has granted guardianship to someone who is not the student's parent, like a relative. The guardianship order must be granted before the student turns eighteen and before the student completes the FAFSA. The legal guardian's information WILL NOT be used on the FAFSA unless they have legally adopted the student.

However, different universities have varied standards regarding who is deemed independent, therefore it is up to the university. If a college requires the CSS Profile, whatever parental information can be collected should be obtained. That is, unless contacting a parent is legally prohibited or dangerous for the student or you as the guardian. As a guardian and if the student is applying to colleges that use the CSS Profile, your information will be used. Some colleges may be willing to waive certain financial assistance standards in these cases, but you must contact each college individually to find out.

Saying Good-bye to 2023

This is our last issue of the year. We've enjoyed providing you with information that is both practical and effective. Many of our parents have been empowered to make better, more informed decisions about choosing colleges and paying for them all because of our newsletter.

College affordability is a problem even for those who you think can most afford it. It's possible they may not be able to afford it without help. Who amongst us discusses money with friends? So please share this newsletter. I'm certain they will be highly appreciative.