01 Dec Paying for College 101
The FAFSA launches today for the 2025-26 academic year — a delay from the typical Oct 1 launch date. Now is the time for students and families to decide whether to apply for need-based financial aid. While financial aid can significantly impact college affordability, it’s important to understand that the process—and requirements—vary from school to school. Keeping track of each institution’s deadlines and forms is essential.
What is the FAFSA?
The Free Application for Federal Student Aid (FAFSA) is a form that U.S. citizens and eligible non-citizens submit to apply for federal financial aid, including grants, work-study, and student loans. Many colleges also use the FAFSA to determine a student’s eligibility for institutional aid. By collecting detailed financial information from both the student and their family, the FAFSA helps schools assess how much financial support a student may need to afford college. It is an essential step for those seeking need-based aid in the U.S.
CSS Profile Considerations
For families applying to about 170 colleges and universities, the CSS Profile is also a necessary part of the financial aid process. The CSS Profile has been available as of October 1, 2024. You can check this list of schools requiring the CSS Profile, but families should verify with individual institutions whether the CSS is required to ensure families are submitting all the required forms.
Who Should Apply for Financial Aid?
If a family thinks their student might qualify for need-based aid at any point during their undergraduate studies, it’s highly recommended that the family apply for aid as an incoming freshman. Some colleges impose restrictions on students who apply for need-based aid in later years, and families don’t want to be unable to access aid if unexpected financial challenges arise.
Additionally, if a student is applying for merit-based aid at schools that require the FAFSA or CSS Profile for consideration, families should submit these forms. While most schools do not require them for merit aid, it’s best to double-check on each college’s website or with their admissions office.
Key Factors in Financial Aid Eligibility
The primary factor in determining financial aid eligibility for U.S. citizens and eligible non-citizens is the family’s Adjusted Gross Income (AGI), as reported on the U.S. federal tax Form 1040. Financial aid applications for students entering college in the fall of 2025 will consider income from 2023.
In addition to income, student and parent assets also play a major role. Reportable assets include savings accounts, investment accounts, and real estate (note that equity in your primary home is excluded from the FAFSA but included in the CSS Profile). Certain assets, such as retirement accounts, cars, and personal belongings, are excluded.
Who Should Not Apply for Financial Aid?
If paying the full cost of attendance is not a financial burden for a family and they are confident that no financial hardships will arise during the student’s time in college, there is no need to submit the FAFSA or CSS Profile.
Potential Disadvantages of Applying for Financial Aid
There are scenarios where applying for financial aid can place an applicant at a disadvantage, particularly during the final stages of the admissions process. Schools often have financial goals, and students with moderate to substantial need may be passed over in favor of students who can pay the full cost. However, this does not mean that full-pay applicants always receive preference. Colleges aim to build a diverse and academically strong first-year class, which often includes students with financial need.
State Requirements for FAFSA Submission
Some states now require students to submit the FAFSA to graduate from high school, though parents can typically opt-out. Families should check their state’s policies to see if this applies to them.
Final Thoughts
Applying for financial aid can seem daunting, but careful planning and attention to deadlines will help families navigate the proc