Applying for College Financial Aid : The FAFSA Application

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In the world of financial aid, equitable allocation of available resources is the name of the game. This allocation can be made only when comparing apples to apples, assets to assets, and income to income. The financial aid powers that be make this comparison by using financial aid applications. You and your student have to apply for financial aid every year that your student needs assistance. And your child's need is determined based on the information that you provide regarding the year just past — otherwise known as the base year. In other words, if your student is beginning college in the fall of 2009 for the academic 2009-2010 year, you need to fill out a financial aid application using base year information for 2008. On this application, you must provide information not only about your child's income and assets but also your own (unless your child is an independent student, in which case she'll be completing her own application without any parental information). Every academic year your child is in school will have its own base year; a four-year college course will have four corresponding base years and four sets of financial aid forms.

Depending on where your child intends to attend school, you may have to complete more than one financial aid application. Although individual schools and many states have their own forms that they require you to complete, here are the two most common and the information you must provide:

• Free Application for Federal Student Aid (FAFSA): As long and as seemingly complicated as the FAFSA is, everyone needs to fill one of these out each academic year, if you need or want aid from any of the federal grant or loan programs. These applications are free (as the name suggests). You may complete the form online or use the more-traditional paper form after January 1 of the year in which you need the aid, using base year income figures and current asset information for both you and your student. You can take most of the required information directly from your, and your student's, base year income tax returns; the rest comes from current bank and investment account statements and your business's balance sheet (if you own part or all of a business). The amount of debt that you have, including mortgages, car loans, and credit card debt, isn't included on the FAFSA.

  You can get detailed info on the FAFSA and complete the online form of the application by visiting www.fafsa.ed.gov.

• CSS PROFILE: Administered by the College Scholarship Service, this form is required by many private colleges and universities in place of or, in most cases, in addition to the FAFSA. The CSS PROFILE contains much of the same data you put on your FAFSA; however, the information it requests is far more detailed and includes the amount of your net home equity (the value of your primary residence less any outstanding mortgage loans). You may complete the CSS PROFILE in the fall of the base year (unlike the FAFSA, which may be submitted only after January 1 of the following year). Also unlike the FAFSA, this isn't a free service; you pay a nominal application fee, plus an additional fee for every school you request your application be forwarded to.

  For more info, go online to http://profileonline.collegeboard.com.

The purpose of these and other financial aid applications is to help the federal government and your student's school determine your family's need for outside sources of funding and your ability to repay loans. Federal financial aid eligibility is determined by a strict formula known as the Federal Methodology based on FAFSA information. Although CSS PROFILE information is far more specific, it impacts only institutional aid (not federal grants, loans, and work-study). Individual financial aid officers are allowed to exercise great latitude in determining need based not only on the CSS PROFILE but also on any other information you may provide. If you believe your financial circumstances are not accurately reflected in the information provided on these forms, talk with the financial aid officer at your prospective colleges about your circumstances and the possibility of a "professional judgment," which allows the financial aid officer to make an aid award based on all the factors you present, not just the ones contained on your financial aid applications.

Don't lie on a financial aid application or even try to bend the truth a little. Although copies of your income tax returns and bank statements are not required attachments, you may be asked to provide them at a later date for verification purposes. Any intentional misrepresentation on your FAFSA may result in your having to repay any grant or loan money your child receives. In addition, you're also liable for fines up to $20,000, a prison sentence, or both.