<p>Go ahead and start the CSS Profile, if there’s a chance the student will apply to a school that requires it. You can start filling out all the routine, boring stuff on the form, leave the harder questions blank for later, and the online form will let you save your work, log off, and come back to it later, with your unanswered questions in red. Get to it through your kid’s signon at collegeboard.com … You don’t have to give them a credit card number to pay until you submit.</p>
<p>Pretty awesome Saturday night fun.</p>
<p>I did all this stuff for myself 30 years ago, but I’d rather let my DD have time for essays or homework or a wee bit of fun this generation.</p>
<p>Then if I’m reading correctly, after Jan. 1, the Profile will give you a worksheet (or pre-fill out an online form maybe?) that helps you do the FAFSA, with the same information. Input once, use the information twice.</p>
<p>First of all, though FAFSA does not ask for certain information, Profile wants the value of the fillings in your teeth (almost). All FAFSA does is give you a number, the EFC (expected family contribution or "every f’ing cent) which is NO guarantee of getting anything. The only things that number does is make you eligible for federal and state money if it is within threshholds. Most schools that use FAFSA only do NOT guarantee to meet full need. The schools that tend to meet full need most often use PRofile or their own apps that go into much more detail. They start the financial aid package with what you can get from the govt, which FAFSA dictates, and then add on it from their own resources. The aid usually comprised of self help as well as grants, which means loans. Also need defined by schools is often not the same as how families will define it.</p>
<p>From how many years does Profile want info? </p>
<p>FAFSA is just one year’s info, but I believe I read Profile goes back before that? My husband lost a very good job and our income has been cut by more than half. Our 2007 income includes a severence package, but with him being unable to find permanent work in a 10 month search so far, it appears likely our 2008 income will be much less. My daughter is now a junior. I had hoped her aid would be based off 2008 but it appears Profile may go back further than that. We’ve saved what we could off the severence but it’s not above the income allowance so it’s not like we’re sitting on a pile of wealth. Is there any way to get a read on our situation ahead of time? I’ve used the calculators but they don’t ask for previous years when doing Institutional Methodology. Does anyone have any idea how big shifts in income play out in real FA situations with Profile?</p>
<p>Profile asks for two years back and a prediction of next year’s income. The EFC that Profile calculates is just a formula result, which the colleges are free to pay attention to or not.</p>
<p>So for a student graduating in 2009, they would like financial information from 2007, 2008, and a prediction of 2009?</p>
<p>I had hoped the EFC calculators could be pretty much relied upon but I fear they not be in our situation, depending on how colleges choose to interpret things.</p>
<p>I am 49, the oldest parent, and just refinanced and will pick up a check for $40k in two days. When I do Profile in 4 days (for a 12-01 EA app), will that $40k be protected, or do I have to do the roof and windows before I do the profile?</p>
<p>Ouch. Bad timing. I’d submit the Profile before you accept the check. The 40K cash out isn’t a protected asset.</p>
<p>Regarding assets, Profile and FAFSA are taking a “snapshot” of your assets on the day you file. So the timing is important- you can maximize your potential aid by filing before you have those assets in hand. Or after you’ve spent them down, but not while the 40K is sitting in an account just asking to be used for college.</p>
<p>I read more than once that cash in hand is a bad deal. So if a person has $30,000 left on a mortgage and $57,000 in cash, does it make sense to payoff the mortgage?</p>
<p>How does the equity then effect FA, since the home would be owned outright?</p>
<p>“does it make sense to payoff the mortgage?”</p>
<p>That really depends on your total financial picture, and whether you might need the cash in the short term.</p>
<p>If you’ve got a balance on a home equity line of credit, though, and also cash on hand, it makes sense to pay that down to get your reportable assets below the asset protection allowance. The cash still remains available through the credit line should you need it.</p>
<p>dt is right-- most families have reportable assets that fall below the protection allowance, so there’s no need to try to “protect” them from the formula.</p>
<p>There are few hard and fast rules about enhancing your financial picture for possible additional aid from colleges. It may not be worth a few extra dollars to realign certain assets. The basic things I have seen advised are spending down student money since assets in a student’s name are hit harder than that in the family’s and paying off debts with assets since debts are not taken into consideration but assets are.</p>
<p>It would be a good idea for those with AGI of under $50,000 to take a look at [FinAid</a> | FinAid for Educators and FAAs | Simplified Needs Test Chart](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid). It covers what could make a person uneligable to file a 1040EZ or 1040A which you need to file to qualify for the simplified needs test. Some of these would be easy to avoid if you know ahead of time what to watch for. Some examples are line 10 - tax refunds… dont overpay to feel good about getting a refund, line 11 - rework your agreement to call it child support instead of alimony, line 12 - is that small part time business really worth a few hundred in income if it makes you ineligable to file EZ?, line 13 - if you only have a small investment that produces capital gains, such as a stock that was a gift, maybe sell it and invest in something that doesn’t have a yearly gain, line 26 - is the moving expense really big enough to worry about it?</p>
<p>These are just things to think about. Fortunately our income is high enough that this doesn’t apply to me personally. But, I have been helping a friend who would have qualified for the Simplified Needs Test if it weren’t for the above things. And they do have assest above the protection allwoance because of the recent divorce and a “cash settlement”. But this cash settlement needs to help cover basic living needs for many years, fund retirement, and help with college. They had very poor advice when this was done, but hopefully with some adjustments for next year (on the 1040EZ issue) their EFC for next year will go form about $15,000 down to $2000 - $3000. Again, just good planning, not “working the system”</p>
<p>A side note; any of you in a pending divorce situation. Think long and hard before wanting a cash settlement. It can have significant affects in this and other tax situations. This person mentione above could have had 1/2 of their spouse IRA, but was advise to take all cash instead. BAd move, at least in their case.</p>
<p>If your friend’s children qualify for federal aid programs, including reduced lunch at school, I think that also qualifies you for the Simplified Needs Test.</p>
<p>djdietz - good post - this is why people need to understand the rules early.. We had overpaid our State taxes the year before the base year - tax refund came in the base year so we could not file 1040a or ez. That cost us a few $$s this year as we would have qualified for simplified needs other wise. No difference in our income or assets - just in the type of return we filed. I learned the rules pretty thoroughly after that.</p>
<p>If anyone is interested the EFC formula guide for 2008-2009 is now available</p>
<p>It means you may be eligible for more financial aid - maybe grants, college based scholarship something of that nature. Anytime there is a “material” change in the financial information you had to report on the FAFSA you should contact the college financial aid office and let them know. They have “special circumstances” forms that you can complete to describe what is going on; someone lost a job, excessive medical bills, change in income, etc. ALWAYS make sure you share this kind of infor with the college financial aid - they can take this into consideration and it may cause them to offer you something you wouldn’t have received otherwise.</p>
<p>sblake7, why wouldn’t the $40k be a protected asset? It is under the $51k I saw listed here.</p>
<p>In an earlier post you said–
Adding- the current asset protection allowance for the hypothetical family mentioned above (older parent 50, two parent family) is $51,800.</p>
<p>I am that hypothetical family. I am 49 not 50, but I assume the protection is graduated per year.</p>
<p>On the timing of the refi - (1) in addition to good rates relative to what I have now, and a roof that was rotting my house before my eyes, I was going to pay off some consumer credit balances and absorb their payments into the mortgage on the belief that colleges would ‘see’ the mortgage as impairing my income, compared to not seeing those same impairments if they were under consumer credit. I should have read ‘the book’ before doing the refi, but see item one above.</p>
<p>From the link on post #75, the FAFSA asset protection allowance for the 2008-9 school year for a couple whose older member is 49 is $47,900.
Home equity is not an issue on the FAFSA at all, or for schools that just use the FAFSA. So it would depend upon the schools under consideration. Many privates do consider some home equity, variously defined. With them, debt which reduces home equity might be helpful, as a leaking roof or a car loan wouldn’t.</p>