Accuracy of NPCs depends on:
- Complexity of income and assets. Simple stuff like mostly W-2 with minor amounts of interest and investment income is more likely to be well handled. Self employment, small business, rental income, complex finances, etc. may be less well handled by NPCs – if the NPC does not ask about such income or assets, but the college uses CSS Profile in addition to FAFSA, it may not be too accurate.
- Divorced parents. Some colleges require both divorced parents’ finances. In this case, the person doing the NPC needs to include that, but often does not have complete information about both divorced parents’ finances, which can lead to inaccuracy. Some students and parents are not aware of some colleges’ requirement for both divorced parents’ finances and incorrectly do the NPC with only the custodial parent finances, generating a result almost guaranteed to be way too optimistic.
- Some colleges’ NPCs are just low quality and do not give good results that match the actual financial aid offers. You can usually tell by them asking very few questions, especially for colleges that use CSS Profile in addition to FAFSA.
- Some colleges change their financial aid policies significantly, so if they do not update their NPCs, or you used an old NPC result from before the change, the NPC result may not reflect their current financial aid policies.
Regarding which tax year, the prior-prior tax year is used. So FAFSA for the 2021-2022 school year will be based on the 2019 tax year. CSS Profile is the same. If the student will enter college in the 2022-2023 school year, the 2020 tax year will be used for FAFSA and CSS Profile. The student’s next year in 2023-2024 will use the 2021 tax year for financial aid.