Another Round of Financial Aid FAQs
Financial aid season is in full swing, and we have received plenty of new questions from students and families completing their financial aid applications (most notable the FAFSA and CSS Profile). If one family has a question, it's likely that others are wondering the same thing, so we're sharing answers below that we hope will benefit many.
Q: How do we report joint accounts on the financial aid applications?
A: If both the parent and student's names are on an asset account, report the value of the account on the financial aid application under the person's name who receives the 1099 and reports the account's interest on his or her tax return. This is often the parent.
Q: What if a parent is in school the same time as a student?
A: Parents don't count as students when reporting the number of people in the household attending college, so unfortunately there's no advantage in the financial aid process if you have a parent pursuing a college degree. However, you can write a note to the financial aid offices letting them know, along with an estimate of what your household is spending for that parent's classes, as they could consider taking it into consideration when calculating the student's financial aid offer.
Q: Can I apply for financial aid from MA if I go to college out of state?
A: There's a limited amount of financial aid available from Massachusetts, and most of it requires the student to attend a college in the state. As an exception, the MASSGrant, a need-based grant for full-time students, can be used at colleges in Vermont, Pennsylvania, and Washington DC. Simply fill out the FAFSA to apply.
Q: How does your cost of living get considered by colleges in the financial aid process (it's more expensive in some parts of the country)?
A: Colleges that only collect the FAFSA do not treat students differently in the financial aid process based on the city or state in which they live except to assume a certain amount of taxes paid based on the student's home state. Schools that collect the CSS Profile, however, often do consider cost of living based on the student's zip code, with a higher allowance given to students who live in more expensive areas of the country. If your cost of living is high, contact the financial aid office to see if they can consider that fact when determining your financial aid offer.
Q: I'm divorced and my daughter lives with me, so we'll complete the FAFSA. Does my ex-husband, her father, also need to submit a FAFSA?
A: If you're a divorced family applying for financial aid, only the custodial parent (the parent the student lives with the most) and the student need to submit the FAFSA. The other parent (called the noncustodial parent) does not fill out anything in regards to the FAFSA. However, if the student is applying to a school that requires the CSS Profile, the school may require the noncustodial parent to complete a separate CSS Profile. Check in with the financial aid office to find out what's required.
Q: My grandmother is my legal guardian, though my parents are still alive. Whose information do I list on the financial aid applications?
A: If you're under legal guardianship, you'll be considered what's called an independent student on the FAFSA, and won't be required to list the information of your parents or legal guardian. However, the CSS Profile will require you to provide the financial and household information for your legal guardian as if he or she were your parent.
Q: How do I report a 529 plan on the financial aid applications?
A: Most families with 529 plans designate the parent as the owner and the student as the beneficiary. If this is the case in your family, report the 529 plan as an asset (investment) of the parent. Even though the asset will be used for the student's college costs, it's still reported as a parent asset. If you have more than one child with a 529 plan, you'll need to report the full value of the 529 plans for all of your children in the parent asset section, not just the 529 plan for the student.
Q: Do I need to report last year's financial aid on the applications?
A: A very small percentage of people must include the grants and scholarships they received within their Adjusted Gross Income (AGI) on their tax return (listed specifically on line 1 of their 1040). In that case, your AGI will report your financial aid for you. Otherwise, you don't need to report anything except any work-study earnings. The financial aid formula excludes your work-study earnings from your total income as a benefit when calculating your resources to pay for college (because it assumes those funds were already spent on college costs).
Q: Do we wait to submit the financial aid applications until after the admissions applications?
A: In most cases, no. The financial aid applications become available on October 1st each year, so complete them as soon as you're able, as some colleges award financial aid on a first-come first-serve basis. If you're not sure of every school to which you're applying in October, submit the applications to those schools where you know you'll be sending an admissions application. As you decide on additional schools, you can send the financial aid applications to those as well.