The FAFSA and the PROFILE

If you plan to apply for financial aid, you should fill out the Free Application for Federal Student Aid (FAFSA) http://www.fafsa.ed.gov/. The FAFSA is issued by the federal government. Whether you are considering attending community college, vocational school, or a four year college or university, start the college financing process by filling out the FAFSA. You must fill out the FAFSA to get federal financial aid. Even if you believe you do not qualify for government funding, you may still want to fill out the FAFSA. Many companies that offer private scholarships require information contained on the FAFSA. States also give financial aid based on the information on the FAFSA.

The information collected from the FAFSA helps determine 1) who qualifies for need based federal financial aid and 2) if the student qualifies, how much the student qualifies for.

The FAFSA formula calculates need based financial aid based on parent and student income and assets. The assets included in the calculation are cash, investments, and real estate (excluding primary residences). Retirement plans, insurance, personal debt and home equity are not included in the FAFSA calculation.

Colleges expect 35 percent of student savings to be used for the cost of colleges versus 12 percent of parent savings.

After determining parent and student income and assets, the FAFSA calculation determines how much the student and parent must contribute for college.

In addition, the College Board College Scholarship Service developed the PROFILE. The PROFILE allows colleges to ask different questions about additional income and assets not disclosed by the FAFSA. The PROFILE can also allow parents to explain high debt or special circumstances not disclosed in the FAFSA calculation.

In addition to the FAFSA and the PROFILE, individual colleges will ask applicants to fill out additional financial aid institutional forms.