College Financial Aid Originates with the FAFSA

Kelly Barnhardt – College Admissions Strategies
October 2022

High school seniors preparing to apply to college should complete and submit the Free Application for Federal Student Aid (FAFSA) — an indispensable tool for obtaining financial aid. Since it’s the only way to get aid from the Federal government, by far the largest source of funds for college, the FAFSA can be of great monetary benefit to students and their families. Nearly all other sources of financial aid, whether need- or merit-based, public or private, also require the FAFSA.

The FAFSA in Context
The FAFSA is managed by the U.S. Education Department (ED), which requires it in connection with the many Federal student aid programs funded by Congress annually. Congress appropriated $120 billion for college financial aid in 2021, yet 47% of applicants didn’t even submit a FAFSA. Although 53% did submit one, this was 5% less than the previous year. Collectively, college-bound students leave billions of dollars in Federal financial aid on the table every year.

The FAFSA is available online at and on October 1st of a student’s senior year. In addition to using it for its own purposes, the ED sends FAFSA data to states, colleges, and other sources of financial aid that use it to determine eligibility.

The Federal deadline for submission of the FAFSA is the June 30th following senior year, but colleges and states have earlier deadlines. Students should ascertain the deadlines for their state and the colleges to which they plan to apply.

Most students submit the FAFSA promptly after its October 1st  availability because many financial aid programs award money on a first-come, first-served basis until funding is depleted. After that, no matter how well qualified an applicant is, they will be denied.

A student’s first task is to open a FAFSA account at either or Students need only provide their name, social security number, home address, and either an email address or mobile number to set up an account.

Information Needed for the FAFSA
The FAFSA asks for information about the financial circumstances of the student and, if applicable, their spouse or family. The following basic information is requested:

  1. Social Security number,
  2. Social Security number of a parent of a dependent student,
  3. Social Security number of a spouse if married and filing taxes jointly,
  4. Student’s driver’s license number,
  5. Alien Registration number for non-citizens,
  6. Federal tax information for the student if independent, for them and their spouse if married and filing jointly, or for the student and parents if a dependent, and
  7. A  summary of assets such as bank balances, investments (such as, securities, trusts, and real estate other than the primary residence), and family businesses and farms.

For students applying to college in the 2022-23 admissions cycle, the tax information required is Tax Year 2021. The IRS Data Retrieval Tool simplifies matters by automatically transferring tax data from the IRS to the FAFSA.

Three weeks after submitting the FAFSA, applicants are provided with a Student Aid Report (SAR). Along with other FAFSA data, the SAR provides the Expected Family Contribution (EFC), which is the amount that the ED considers affordable for the student or family to pay toward the costs of college given their financial circumstances.  This data is also sent to colleges, state agencies, and private scholarships as designated by the student.

Often, the EFC is higher than the amount that a student or family can actually afford to pay from their income and assets. They will either need to secure sufficient financial aid to bridge the gap between what they can realistically afford and the cost of targeted colleges or, if this can’t be done, the student needs to lower their aim cost-wise.

The ED’s SAR doesn’t provide the types and amounts of governmental aid for which the student has been approved. This information is sent later by colleges. Colleges, when they accept applicants, determine the governmental aid programs and amounts for which the student has been approved. This information is sent along with aid offered by the college itself in a Financial Aid Award Letter, which is sent to the successful applicants of the regular admissions cycle in March or April. Successful early applicants receive it in January.

The FAFSA Simplification Act of 2020
The purpose of the FAFSA Simplification Act of 2020 is to modify the FAFSA to make it easier to complete and fairer to all applicants. Some provisions are already in effect and others will take effect in the next two years. The cutover to the new FAFSA will be completed by June 30, 2024. The changes are noted below:

  1. Eliminates the term EFC and replaces it with Student Aid Index (SAI). Since this doesn’t fix the problem of not knowing the cost of a college prior to the Financial Aid Award Letter, other changes have been made (see #2).
  2. Defines Cost of Attendance (COA) to include tuition/fees, housing/meals, books/materials, transportation, Federal loan fees, and other miscellaneous costs. Stipulates that the itemized COA must be disclosed on a college’s website.
  3. A family’s Income Protection Allowance (IPA) shelters part of their income from the SAI. The Act increases the IPA by 35%, or $9,410, per dependent student in 2022-23.
  4. Changes the parental information that is required from “The parent you lived with more during the past 12 months” to “The parent who provides more financial support”.
  5. Untaxed student income no longer needs to be reported.
  6. Implements an official process for changing information on the FAFSA.
  7. Distributions from a grandparent’s 529 account no longer need to be reported.
  8. Raises the Adjusted Gross Income exemption from $50,000 to $60,000.
  9. Expands the authority of financial aid administrators so that they may exercise judgement in cases of natural disasters, economic downturns, and business losses.
  10. Families no longer benefit from having multiple children in college at the same time.
  11. Reduces the number of questions on the FAFSA from 81 to 36.

Another Means of Obtaining Aid — The CSS Profile 
The CSS Profile is an online application used by colleges and scholarship programs to award non-governmental financial aid. The colleges are 240 selective institutions with resources that enable them to offer extensive aid. The CSS Profile should be submitted by all students applying to a CSS college. The Profile doesn’t replace the FAFSA — it supplements it.

The CSS Profile is a product of the College Board, the non-profit that administers the PSAT, SAT, Advanced Placement, and the College Level Examination Program. The Board is a membership association that has over 6,000 secondary schools and colleges as members.

The CSS Profile is available on the College Board website on October 1st of a student’s senior year. Deadlines for submission vary by college. Rather than wait, most applicants submit their Profile as soon as possible because financial aid programs of CSS colleges operate on a first-come, first-served basis.

Families should brace themselves for the CSS Profile. The Chronicle of Higher Education calls it the “Most onerous form in college admissions.” Families should anticipate that questions of a personal nature will be asked. They range from the value of a family’s primary residence and family-owned business to the cost of private primary and secondary education for siblings. For families with students who aspire to attend a CSS college and need external funding to do so, it’s worth some unpleasantness for a chance to receive substantial financial aid by means of the Profile.