College aid forms can seem about as friendly as a 1040, and maybe even more upsetting emotionally. Plus, there are two of them most of us have to fill out—the FAFSA and the CSS Profile. If you’ve been reading this blog you know I advocate submitting the FAFSA on the earliest possible date, or as close to January 1st as you can. But here’s a shocker for most people: if your kid is applying for admission to any school early decision or early action, the school may require you to submit the CSS Profile by November 1st of senior year. For a list of schools that require the Profile in addition to the FAFSA, you can look at the second page of the Profile info from last year.
Be sure you check out not only the application deadlines but the financial aid deadlines. For example, last year Stanford’s early action deadline was November 1st, but their deadline to submit financial aid for early action was November 15th. However, at the University of Chicago this year, the deadline for early action admission and for financial aid for early action applicants is November 1st. But whoa, the Profile is only available beginning October. 1st. You’ve got some fun times ahead!
If these financial aid application deadlines are a surprise, well, it points out how important it is to start college financial planning early. Time after time I hear people say, “Well, I don’t have to start yet, my kid is only a freshman in high school”. Wrong! You need to start the intensive part at least that early, but you should ideally take “early action” when your child is a toddler. The earlier you start, the more likely you are to accumulate savings, and the more flexibility you will have to adjust to changing circumstances. The earlier you start “late stage” planning (at least by first year of high school) the more strategies you can employ to lower your out of pocket costs.
Okay, your student is a senior. What can you do now? You still have about one month to make changes if necessary—contribute to a Roth or IRA or fund an HSA for example. Spend this weekend assembling your 2010 taxes, doing an initial run through of your 2011 taxes. Contact your accountant if necessary, but you can often get an adequate picture if you can match your current figures to last year’s. The Profile will need to be revised after you have 2011 taxes completed, but schools use this first look to tentatively budget their financial aid and give you an early estimate of what you might be awarded. If you have to estimate, estimate on the honest low side (the side that makes you look poorer). And don’t depend 100% to the penny on what the estimate says—it’s not a final offer.
Now would also be a good time to write any letters documenting special financial circumstances—job loss, divorce, illness. In some situations, schools will require documented evidence from a third party. For example, if a non-custodial parent cannot or will not fill out the required document, some schools will require backup information from a disinterested third party.
My best advice is to see a financial planner for help. (What were you expecting?) An early look at your specifics can save you thousands of dollars either by increasing your eligibility or lowering your out of pocket costs. A plan in place can also help you avoid investment and retirement mistakes—college costs can have a domino effect on all family finances. Let’s get going!
