It’s hard keeping track of what matters when in the prior-prior year world of the FAFSA and CSS Profile. Here is a table summarizing tax year and asset dates for the next few college years:
|FAFSA/ PROFILE Income Tax Year
|Assets As Of Oct*
|AOTC Tax Year**
To summarize based on where you are in high school:
Sophomores, this year is your first FAFSA income year. This year is your base year for EFC purposes. All future years will be compared to 2020.
Juniors (and seniors), 2020 income will also count for you for FAFSA purposes, but not until your second year of college. Families of juniors should think about what retirement contributions they can make this year and what to do with student summer job earnings to remove assets from the calculation come fall.
* Assets are as of the filing date, which may be as early as October or into the following year depending on the school’s filing date.
** Remember that the AOTC can only be claimed for four tax years, so families should decide whether the fall of freshman year is better than spring of senior year for claiming. With the income limit of $160,000 (married filing joint) or $80,000 (single), some families might not be eligible every year.
Parents may find that different strategies are needed during different years. For example, a family with a student beginning college in fall of 2022 might reduce pre-tax retirement contributions this year (to increase taxes, which are deducted from income on the FAFSA and therefore reduce EFC) and then maximize contributions beginning in 2022 to reduce AGI for AOTC claiming purposes.
Who knew we’d be a week away from the end of the year at this point? Kidding of course. If you’re among the many who want a year-end to do list, here goes! Continue reading What to do now?
Last month, the Department of Education announced the release of earnings and debt levels by major and school. This is a fantastic level of transparency when a career path is already in mind. The data is available on College Scorecard. Continue reading Earnings and Debt by Major
What do Harvard, Yale, MIT, Princeton, University of Connecticut, University of Oklahoma, Ohio State, Washington & Lee, Notre Dame and Michigan State have in common? Each had a student selected as one of this year’s Rhodes Scholars. The Rhodes Scholarship is arguably the most prestigious and competitive scholarship available to American students, and the size and diversity of the applicant pool– over 2,900 students endorsed by 298 different colleges and universities– speaks to the academic and leadership excellence of the 32 selected students.
It’s also testimony to the fact that you do not need to attend an expensive or reach school to compete at this level: 1/4 of these scholars attend public universities that admit more than 50% of applicants, according to College Navigator.
It’s time for my annual financial aid presentation at my kids’ high school. This year the topic is Five Questions for College-Bound Students, which your families might also want to discuss. Continue reading Five Questions for College-Bound Students
The FAFSA gets a lot of attention right around now, but it’s only one of two financial aid forms. The other is the CSS Profile, used primarily by private colleges and universities.
The Profile differs from the FAFSA in several major respects: Continue reading FAFSA vs Profile
Isn’t it horrible that organizations like US News & World Report rank colleges? Remember the good old days when you could just go to college and not worry about rankings? When admissions departments focused on finding best-fit students, not best test score students? Continue reading College Rankings
I’m taking a brief break from the programming I outlined for myself a week or so ago. It’s September and that means that many people are looking seriously at college for the first time. They may be parents of seniors, parents of freshmen, parents at any point who think now is a good time to start investigating this big future step. And after a few google searches or conversations with friends or counselors, they have concluded, “This is overwhelming! Where do I begin?” Continue reading “Where Do I Begin?”
The Common App and Coalition App are available now. It’s summer (at least here in Oregon it’s still summer), so why should you care? Looking now can give students a fuller sense of all the pieces they’ll need to assemble for their applications. Based on our experience and recommendations from guidance counselors, I’d suggest starting with the Common App. Continue reading The Common App and Coalition App
What do the numbers $7,000, $42,000, $44,000, $56,000, $58,000, $72,000 and $81,000 have in common? Each is a net price estimate (rounded) that we received from a different college, using the same data inputs. That’s one example of why one might reasonably argue that Expected Family Contribution (EFC) is of marginal significance. Continue reading Net Price Matters More