This post was originally published on May 13, 2019. It was updated on November 29, 2021.
Learn the Rules of the FAFSA and CSS Profile
Back when I presented our college funding workshop in person, I could always count on one audience reaction: a multitude of very audible sighs once we started going through the FAFSA and CSS Profile. During one workshop in South Carolina, in a church no less, an indignant mother had enough and yelled, “Are you kidding me???”
Since we’ve moved many of our workshops to an online webinar format, I imagine these once-frustrated sighs have become a collective slew of choice words shouted at a computer screen.
You may find it tedious to learn about and complete these need-based aid applications but knowing the difference between the two could save you a serious amount of money. especially if you are divorced, a separated spouse, or in a household situation where you do not live with the other parent of your biological child.
FAFSA and CSS Profile: Definitions
The FAFSA (Free Application for Federal Student Aid) is the form for those who seek federal financial aid for college. You can fill out this form for any college or university to which you apply.
Most families who choose not to file FAFSA do not realize that this application also puts you in the running for state aid, and some schools and private organizations require it for merit aid. Also, if you want to access federal loans, your ticket is submitting the FAFSA.
Some schools require you to file an additional form called the CSS (College Scholarship Service) Profile. The CSS is used primarily by private and elite state schools to determine whether you qualify for institutional aid. This is aid that the colleges disburse from their own war chests. Both applications use your financial info to determine your Expected Family Contribution (EFC).
Your EFC, in simplest terms, is an estimate of what the schools expect you to pay. It can drastically vary between the FAFSA and CSS Profile because the FAFSA looks mostly at income, while the CSS goes a little more in-depth into your financial background.
Using the FAFSA to Your Advantage
While there are distinctions in what items each of the forms looks at, one of the most significant differences between the applications involves divorced or separated parents.
The FAFSA only asks financial questions for the custodial parent, completely ignoring any income and assets for the non-custodial parent.
The custodial parent for the FAFSA is the parent with whom the student lived the most during the previous twelve months. If the child stayed equally at both parents’ homes, then the custodial parent is the one who provided more financial support in the past twelve months.
Imagine a high school senior applying for colleges. We’ll call her Suzie.
Suzie’s mother and father are divorced, and Mom is the custodial parent, according to the FAFSA. Mom makes $45,000 per year and received the vacation home in Florida along with a few other assets in the settlement. Dad is a doctor with a thriving medical practice and makes $250,000 per year.
The FAFSA overlooks Dad’s substantial income and focuses on the custodial parent’s income. Since Mom’s income is less than $50,000 per year, Suzie’s Expected Family Contribution is effectively $0. When Mom and Suzie fill out the FAFSA together, Suzie will be eligible for a shipload of need-based aid at any “FAFSA only” school in the country.
Most industry experts will emphasize this useful difference and recommend these “FAFSA only” schools for Suzie based on her current family dynamics.
Upcoming FAFSA Changes for Divorced Parents
We don’t have all the fine details yet, but the Department of Education has planned a rolling implementation of several changes to the FAFSA by the 2024-2025 school year. Unfortunately, one of these changes will have a big impact on divorced families and will throw a wrench in the strategy described above:
The custodial parent will be the parent who provides the most financial support to the student during the prior-prior tax year.
While the dates are not entirely definitive for each change, it sounds like the new custodial parent rule will be implemented when the FAFSA opens on October 1, 2023.
This means it’s time to start your college financial planning with these changes in mind. If you have a confusing financial situation or are worried about using your money efficiently in the future, feel free to reach out to one of our college funding experts about creating a college financing game plan.
The Unpleasant Truth of the CSS Profile
Now for the unpleasant truth. Same scenario, same student, same financials, but let’s say Suzie has her eyes set on a few prestigious schools that require the CSS Profile.
The CSS Profile, in general, combines the income and assets (even equity in the primary and secondary/vacation homes) of both parents, not just the custodial parent.
Consequently, Suzie’s Expected Family Contribution may be much higher based on the CSS Profile. Despite her mother’s income, she might even need to pay close to the sticker price at these prestigious schools.
The good news: there are a few CSS Profile schools that do NOT ask for this information.
Check out the complete list of 2022-2023 CSS Profile schools and determine whether they require non-custodial parent info.
The average sticker price of a private four-year college that requires the CSS Profile is about $50,000 per year. In contrast, the average cost for a four-year public university that only uses the FAFSA is closer to $25,000.
The out-of-pocket difference between these is at least $100,000 over four years. And remember, Suzie has an EFC of $0 at the FAFSA schools, so it’s very likely that she would pay significantly less than that $25,000 average cost per year.
Note: This example is very simple to demonstrate the potential catastrophe of not understanding the financial aid system. For a more in-depth analysis of college costs, check out A Peek Behind the Curtain of College Pricing.
Moral of the story: If you are divorced, separated, or part of a blended family, understand which forms the schools use before your “Suzie” gets emotionally attached to a school you cannot afford.
Not sure how much aid you will be eligible for? Want to get a better sense of what colleges expect you to pay? Use our EFC Calculator!