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  • Jason Flurry, CFP

Understanding details, timelines, and required documentation for FAFSA and the CSS Profile



I’ve written several articles recently talking about the financial aid process and this article is going to be about how to master details and documentation that go with your financial aid forms. If you been wrestling with the FAFSA and the CSS Profile lately, this article will give you some information on what next steps to take and help you make sure you’re on track with what you’re supposed to be doing.


Know your timelines The first thing I want to mention to you are timelines. When do you file your financial aid forms? It used to be that we would begin financial aid season in January of every year and we would use the previous year’s tax return to put that information in for the upcoming school year. A few years ago they changed the rules, and now you’re using your tax return from two years ago instead. You can also begin filing financial aid forms as early as October 1st of your student’s senior year.


This is an annual renewable process so be looking for financial aid season to begin in October each year that you have kids in school. You’re going to use your tax return from two years prior but the assets you report on the financial aid forms are as of the day that you file. Things may have changed a lot for you over the past two years income-wise, so pay attention there.


For example, if your income has gone down, you definitely need to report that to the college. To do that, you’ll start by reporting your normal tax return information on the FAFSA and CSS Profile and letting them process it. Then you’ll contact the financial aid office to let them know that your income has changed – for the worse. Maybe you lost your job or changed jobs since then and your new income level is much different than it was previously. Simply reaching out to the financial aid office and letting them know that the income that’s on that old tax return is not in place today can really open the doors for you to receive a lot more money at a very important time.


Educate yourself Be sure to review the all of the articles I’ve written about the financial aid process to make sure you don’t accidentally overstate your financial resources and your true levels of cash, savings, and investments. It’s so easy to do and the college will accept whatever information you send them. You want to make sure that you’re only sending them the stuff that matters.

Also, if you have money in your student’s name, then maybe there’s an opportunity to transfer it out of the student’s name before you file for financial aid. If so, definitely take advantage of that because it will lower your expected family contribution.


I’ve already messed up – now what? Maybe you’ve already filed for financial aid in previous years and you go back and find you’ve drastically overstated your assets. Will that have any impact on you when you file FAFSA going forward? The good news is, no, it won’t have any negative impact on you. Each year in the financial aid system is a standalone year.


Let’s suppose you had a really good year and then the next year things didn’t work out so well. You’re not penalized from the previous year during the year when you really need some extra consideration. If you made mistakes and/or you overstated your assets, or maybe you had money and you started a business that required you to transfer that money over into a business account, the money from the previous year does not affect the current year. Knowing that could give you a lot of flexibility inside the right plan. If you still have time to make any adjustments before you file your financial aid forms, get some help from a College Planning Specialist who can show you how to protect yourself and your money going forward.


Don’t forget your paperwork Let me also talk a little bit about documentation here. If you’ve ever tried to qualify for a mortgage, you remember that you had to disclose every possible imaginable detail of your financial situation in that mortgage underwriting process. Fortunately, the financial aid system is not nearly as complicated. Your tax return is usually the sanity check with the FAFSA form. In fact, you can download that information directly from your tax return through the IRS into your FAFSA, if the system work on the day you file (it can be quirky sometimes). For most people that download meets the documentation requirement for the federal form, unless your income is on the low side and you qualify for Pell Grant.


In those cases, you’ll probably receive a request to verify your information with the colleges and with the government. They say the verification process is random, but if you qualify for Pell Grant, I can almost guarantee that you’re going to be verified. It’s that random!

Fortunately, the verification process isn’t tedious. You just have to complete a form where you list out the student’s information and list the members of your household. If you used the IRS’s Data Retrieval Tool through FAFSA and downloaded that information directly into your FAFSA form, you’ll indicate that on the verification form for yourself and for your student, if they filed a tax return for that particular year.


If you didn’t use the IRS Data Retrieval tool inside FAFSA, they may ask you to provide a copy of your IRS transcript, which you can download for free on the IRS’s site. Once you check those boxes and possibly send them a copy of those transcripts, you sign and date the form at the bottom once everything’s complete.


What’s the deal? It’s not that the college is really concerned that you’re not telling the truth or that you may be trying to hide something. It’s really that the colleges have to cover their bases because they’re not only giving away their money, they’re also giving away Uncle Sam’s money. And they get audited from time to time too. So, if during a regular audit, the auditor randomly pulls your file out and sees that you received grant money from the US government, and then they see that the college failed to get the documentation required to verify your information, the college can get in big trouble for that.


I’m sure the colleges deeply love you and appreciate your business, but nobody in the financial aid office is going to get in trouble because they didn’t get your paperwork in the file.


But wait…there’s more In addition to this information for FAFSA, there’s additional information required sometimes with the CSS Profile. Colleges that use this form also use a completely different system for verification. They still want a copy of your tax return, but sometimes colleges will ask you to upload copies of your tax return directly to their website through a secure portal. Many colleges use a service administered by College Board called IDOC, which is a depository for financial documents, tax returns, and anything else they may require.


The verification process will be very similar from college to college. You will never have to provide copies of any of your investment or bank statements as evidence to prove or disprove the value of your home or your business. If you’re going to appeal your award through the financial aid appeal process, you may want to provide additional information to show them the details that you’re describing. But, as a part of the normal process, colleges should never ask you for account statements or information about your mortgage.


Naturally, if you disclose that information to them, colleges will use it against you as they determine whether they feel you can afford to pay for college. That’s why it’s so important that you only provide them with the information that’s required and make sure that it stays consistent between your FAFSA and your CSS profile.


The gift that keeps on giving Like I’ve said before making mistakes can cost you delays and cost you tens of thousands of dollars. And, whatever award you tend to get in one particular year, unless your financial situation really changes in subsequent years, that’s roughly the same amount that you’re going to get all four years your kids are in college. You really want to take the time and effort to make sure that what you’ve given them is accurate and timely so that you can get the best award possible.


A lot of people have compared filing for financial aid to filing their taxes and you know how much fun that is, but has the IRS ever given you $50,000 a year in free money to send your kids to college? Some of the colleges we’ve worked with do!


Take the time to educate yourself and make sure you get answers to the questions you really need to know so that you don’t pay more than your fair share of the college bill. There’s a lot of free money out there and you could be very close to claiming your share of it.

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