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New FAFSA Delay Presents an Opportunity
Guest Contributor
Paying for college is a concern for most families. Every year hundreds of thousands of students and their families seek financial aid for college.
Completing the FAFSA (Free Application for Federal Student Aid), and in some cases the CSS Profile, are crucial steppingstones to receiving that aid. Colleges require FAFSA completion for a student to receive any federal aid and in many cases college merit aid.
The U.S. Department of Education oversees the FAFSA and the College Board oversees the CSS Profile. Both forms undergo changes every year, whether they be major or minor ones. Each year they try and make the forms more user-friendly and address any concerns regarding complicated questions and unclear filing information.
According to the U.S. Department of Education, this year’s FAFSA will include the following changes and enhancements:
There is also a new version of the myStudentAid mobile app, where a user can complete the FAFSA form, manage their account, get a summary of their aid, and access a notification center regarding their aid. No major changes have been made to the app for the 2022–23 award year.
This year, filling out the FAFSA application may be complicated for some families who received COVID-19 unemployment benefits under the CARES Act.
CNBC interviewed Kalman Chany, the president and founder of Campus Consultants, a firm that guides families through the financial aid process. She provided a breakdown of why families should pay extra close attention to this year’s application.
“The provision to allow for up to $10,200 in unemployment income to be tax-free had not yet been passed when some people filed their tax returns in February or early in March,” Chany explained. “The IRS said that early filers didn’t need to amend their tax returns, and they would still grant them that tax credit. The issue there is for those people who filed early and are using the IRS Data Retrieval Tool on the FAFSA form, their income will be overstated because the Data Retrieval Tool will pull the originally filed data prior to the IRS’s adjustments for the UCE [Unemployment Exclusion]. That UCE tax break would have reduced their adjusted gross income.”
Families affected by these benefits should consult the financial aid offices of the colleges and ask for assistance and guidance. Guidance from the office of Federal Student Aid encourages financial aid administrators to work with affected families to use their professional judgment to appropriately adjust the family’s adjusted gross income on the application.
With the 2022–23 CSS Profile, the College Board recently announced that families making up to $100,000 a year will no longer have to pay for the CSS Profile.
In the past, the College Board provided fee waivers based on an applicant’s parental income and family size (previously, a family of four qualified with an income of $45,000 or less). Orphans and wards of the court under 24, as well as students receiving SAT fee waivers, also qualify. Otherwise, applicants pay $25 to submit the CSS profile to one college, then $16 for each additional one.
According to the College Board, granting a fee waiver to families earning less than $100,000 would double the number of students who don’t have to pay for the application (which is completed by more than 400,000 students a year). The form, used by more than 300 colleges, universities and scholarship organizations to allot about $9 billion a year to students with need, is more detailed than the FAFSA. It provides participating colleges with a more detailed picture of the family’s finances.
The College Board also announced plans to create a “lighter, shorter” version of the lengthy application, which many college-access advocates have described as a barrier for low-income and first-generation applicants.
