As if recalling the eye chart of acronyms connected to college planning and career planning wasn't hard enough, layering on how those ciphers relate to financial aid is probably worthy of a bachelor's degree, in and of itself.
Last time I shared some of the fundamental precepts of one of the most important acronyms a college-bound student must know - FAFSA. The Free Application for Student Federal Aid process is arguably the most commonly utilized financial aid metric for colleges and universities to assess a family's Estimated Family Contribution (EFC).
However, the FAFSA is not the only financial aid procedure one might encounter. The College Scholarship Service Profile, otherwise known as the CSS Profile, is another filter that is sometimes requested to assess a family's EFC. Both the FAFSA and the CSS Profile are required forms at selected private colleges and universities. And yet, there are significant differences between the two forms, as well as the metrics they use to compute a family's EFC.
Facilitated by the College Board, the CSS Profile is used primarily to determine non-federal financial aid, such as institutional scholarships, grants, and loans. As a general statement, the CSS Profile is a more detailed questionnaire that calculates need more stringently than FAFSA.
For example, FAFSA calculates aid based on what is referred to the Federal Methodology (FM) calculation, while the CSS Profile employs the Institutional Methodology (IM). The Federal Methodology does not include home equity as part of the equation, whereas the Institutional Methodology does require this information.
The IM computation requires a minimum financial contribution be made by each student toward his or her education, while the FM process does not assume a student will be able to contribute anything. However, this is not to say that colleges and universities requiring the FAFSA would not include a work study package, which provides the opportunity to "work off" a portion of the aid provided, by way of campus employment.
Another substantial difference between the two is that the Institutional Methodology is linked to the consumer price index, while FM is tied to government studies of the low standard of living.
If a family is applying through FAFSA, (e.g. the FM process) one of three possible formulas to determine a family's EFC will be applied - a regular, a simplified, or an automatically-assessed formula. The determination on which one is applied is based upon a family's unique financial situation.
Most families will fall into the regular formula, which assesses a family's assets and income to determine how much a family can contribute. This amount is then used to calculate the amount and type of aid, such as federal grants, loans, and work study.
Occasionally, the FM process bypasses a family's assets and uses only income only to calculate the EFC, thus making a family potentially eligible for the simplified formula. The key here is whether or not the applicant is eligible to file a 1040A or 1040EZ income tax form. Whether or not one has filed either of these forms is irrelevant.
According to Petersons College Search, "a family may have filed a 1040, but if their combined income was less than $50,000 and they were eligible to file a 1040A or 1040EZ, the qualifications for the simplified formula have been met."
The final FM formula is the automatically-assessed formula. Simply put, applicants (student or parent) who have filed, or can file a 1040A or 1040 EZ, or are not required to file any tax returns at all, AND have an adjusted gross income on his or her return of $20,000 or less, will have an EFC of zero and, therefore, qualify for the automatically-assessed formula.
In essence, the Federal Methodology calculation includes less filters, thereby creating the potential to qualify for a greater amount of aid, while the Institutional Methodology used by the CSS Profile incorporates additional financial filters, thereby creating the potential for a lower amount of aid.
There are approximately 275 colleges and universities that request applicants to complete the CSS Profile, a vast majority of them located on the East Coast. A list of these schools can be obtained through the College Board website - www.collegeboard.org.
Once you arrive at the College Board site, click on the College Planning tab at the top, then click the Pay for College, and finally the Profile Online link. A link listing the schools requiring the CSS Profile is listed there.
So, are the FAFSA and the CSS Profile the only financial aid assessments that a family might encounter? In purity, they are not, though the overwhelming majority of schools will use one or the other, or both. Students applying to private liberal schools should ask the admissions office if any other institutional aid forms are required when applying for aid.
• Brian Underwood is the executive director of Sierra Lutheran High School. He can be reached at underwood@slhs.com.
