The FAFSA, or the Free Application for Federal Student Aid, is required of all students who wish to be considered for need-based financial aid at any accredited U.S. public or private college or university. As its name implies, there is no charge to file the FAFSA, which may be filed online:

http://www.fafsa.ed.gov/

The FAFSA is used to determine a student’s eligibility for federal loan and grant assistance, including the Pell Grant, Federal Supplemental (SEOG) Grant, the Perkins loan, and the Stafford loan. The FAFSA is based on a student’s (and the student’s parents’) income and asset information for the prior tax year.The magic number of the FAFSA is the Estimated Family Contribution, or EFC. This is what the government believes you should be able to contribute toward a college education, which is based on the financial information submitted on the FAFSA application. For example, if your EFC is determined to be $10,000, and the student’s college has a total cost of education (tuition, fees, room, board, books, supplies, personal expenses, and a transportation allowance) of $20,000, the student would be eligible for up to $10,000 of need-based financial aid.

The Profile application, administered by The College Board:

https://profileonline.collegeboard.com/prf/index.jsp

The Profile is used, generally in conjunction with the FAFSA application, at most private colleges and universities. The biggest difference between the Profile and the FAFSA applications is the inclusion of a family’s home equity (if applicable). The Profile considers home equity in its analysis, the FAFSA does not. At a private (i.e., more expensive) college or university, the FAFSA is used to determine a student’s eligibility for federal grant and loan assistance (Pell, SEOG, Perkins, Stafford programs). The Profile is used to determine a student’s eligibility for school-based aid, often known as “Institutional aid” – funds (generally grant assistance) available to a qualified student, in addition to federal grant and loan aid. Unlike the FAFSA, the Profile is not free, and currently costs $25 to have your information sent to one school and $16 for each additional school.The magic number for the Profile application, often known as an Institutional Methodology Estimated Family Contribution (IM EFC) is less clear – it’s actually quite clear, but it’s not published by The College Board, nor is it advertised by most schools. Why? The IM EFC is almost always more, even for families that have no home equity, which results in a lower aid eligibility than determined by the FAFSA. A student may have a FAFSA EFC of $10,000, but an IM EFC of $15,000. Instead of qualifying for up to $10,000 of aid, the same student (based on the Profile analysis) would be limited to $5,000. Less aid to such a student means more aid (but less of it) to more students.

Ever had a conversation with a impatient, rude, or even obnoxious financial aid counselor?

This is one of the more frequent comments made by many of our clients. One or two less-than-elegant customer service experiences can happen almost anywhere, especially when you’re dealing with the same office on a regular basis for four or more years. Frequent occurrences of poor customer service, though, seem to afflict the financial-aid industry on a more than regular basis. When a school asks for $20,000 (or, gasp, $60,000!) per year, every year, common courtesy is not only assumed, but expected. Demanded, by golly, you’re paying through the nose for it!

Unfortunately, that’s not always the case. Thankfully, we’re happy to report that not all aid offices rank high on the grump-scale. What’s more, if you or your student attends a college or university where the local financial aid officers are universally kind, respectful, and patient, you’ve discovered a gold mine. Stake that claim before someone else does!But why the bad finaid vibe? The aid industry, as a whole, is not a very fun place to work. The first problem, the pay is low. Many universities are guilty of offering low wages in return for “free” tuition benefits, which can be difficult, if not impossible to use for a full-time school employee. For those rambunctious financial aid employees who do take advantage of the free (but often taxed) tuition benefits, the schedules of these folks are stretched to the max: full-time job, school, nevermind family duties and possibly their own childcare responsibilities.

But it’s more than just the lousy pay. Working in financial aid is constantly stressful. Lots of kids can’t go to school unless an aid officer does his or her job effectively. Even when the job’s done well, the final result is often well short of the customer’s expectations. It’s a devastating blow when a student is admitted to a dream school, only to find out later that it’s not possible to attend because the aid offer was too low. Aid officers are yelled at, threatened, even physically harmed. We’re aware of one financial aid office that installed a panic button under the front desk following several hostile incidents in their lobby. The silent alarm went directly to the local city’s metropolitan police force, bypassing the school’s own campus police. Why not the campus police? They weren’t allowed to carry guns. No joke.

Lastly, and not surprisingly, the turn-over in most aid offices is high. Who wants to be paid poorly and work in a place of high negativity? After a year or two of that, a lot of people just leave. Looking for a job? Chances are your local financial aid office has one or more openings. For those who hang on, they’re faced with low pay, a stressful working environment, AND lots of work as they’re surrounded by people who regularly quit.An excuse to be rude, obnoxious, or hostile to students or parents? Absolutely not.

When selecting a college of university, check out the aid office. It’s easy. Just call or e-mail. Are you on hold for long periods? Are your calls promptly returned? Are they returned at all? Did you get a reply to your e-mail that, by the way, answered your question? Did you get a reply? If the answers to these questions were not what you had hoped, and if you will count on financial aid to make it work, think long and hard about that college. That situation probably won’t get better. The good news? There are lots of schools out there with highly functional aid offices. Thankfully, the grumpy aid counselors seem to be congregated at the same schools.

Two reasons:

First, don’t count yourself out quite yet. The financial aid application process relies on several dozen different variables, income being only one. It’s not unusual for families with incomes approaching $2000,000per year to qualify for need-based financial aid. Avoid aid disqualification through self-selecting yourself. You’re paying a lot of money for college, which includes putting the school’s financial aid office to work. You might be pleasantly surprised.

Second, the financial aid review process is inherently complex, time consuming, and requires the submission of multiple tax documents and applications such as the FAFSA or Profile (or both). In the event of an unfortunate or sudden change of family circumstances, including the loss of a job, a divorce or separation, or even the death of a parent, an absence of an aid application can cause significant stress and delay during a time when both should be avoided. In more than 30 years of experience with a variety of financial aid offices, we've seen these unfortunate instances occur by the score, every year. Even in an event where a financial aid office would like to assist, very strict federal guidelines prohibit any action until the needed financial aid forms (e.g., FAFSA or Profile) have been filed, received by the school, and reviewed. This process can, and often does, take weeks, even months.

Filing an aid application should be considered an insurance policy, often a free one, where your family and an aid office can immediately begin a review (or re-review) of a student’s aid application when time is of the essence.

So, should you apply for aid, even if you don't think you'll qualify. Yes! The aid application process is a moderately long walk. Don't remove yourself from the journey by not taking that first step.

Many would suggest that if a student is in college, they're already plenty independent, or at least independent-enough. For financial aid purposes, though, there's a HUGE difference between independent and Independent.

The vast majority of undergraduate students are Dependent, which essentially means that one's parental income and assets are considered in a student's aid application. Most high school students don't earn six-figure incomes, don't own half-million dollar homes, and don't have years or decades worth of retirement savings nestled away in a variety of accounts. But a lot of their parents do, and this can have a not-so-nice impact on an aid application.

What if all of those parental assets were not included in an aid application? Could that make a difference, a big difference? Without further declaring the obvious, absolutely.

How can an otherwise Dependent undergraduate student be considered Independent?

Only one of the six following criteria need be met. If you recently filed a Free Application for Federal Student Aid (FAFSA) application, you had to answer the following Yes-No questions:

1. Student is required to be 24 years or older?
2. Student is a veteran of one of the U.S. armed services?
3. Student is enrolled in a graduate degree program?
4. Student is a ward of the court?
5. Student is married?
6. Both parents of a student are deceased?

If any of these criteria apply to you, be sure not to race through this part of the FAFSA. Answering "yes" to any one of those questions could have an enormous, and positive, impact on your eligibility for need-based aid.

One of the best ways to receive need-based aid starts with an on-time (and complete) aid application. Indeed! It can be that easy. Most colleges and universities have a finite amount of financial aid funding for a given academic year.

Once the money's gone, c'est la vie!

Hence, the reason for the aid office's deadline. Somewhat of a dirty little secret, and one of the biggest reasons for the deadline in the first place. Schools know that some kids won't meet the deadline, which offers a school the chance to say, "Sorry! You're not receiving as much aid as you did last year because you didn't apply on time and our funding has been exhausted." It can save the school some money, even if only a few kids miss the deadline.

Don't give your aid office the easy way out!

But what to do if you can't complete your aid application on time? When we were in the aid-office trenches, we often heard this one: "But I can't complete my application by the deadline because my parents won't file their tax returns until August, maybe not until October!"

If that sounds familiar, you're not alone. What now? Complete as much of it as you can, the FAFSA, the Profile, and the school's aid application (if they have one). Use estimated tax information if needed, then follow-up with copies of the completed tax returns when they're done.

What to do if your school says too bad, if we don't get everything by the deadline, you're out of luck?

If you must, file a tax return with the IRS before the school's deadline, then file an amended tax return at a later date. You'll meet the aid office's non-flexible rule, and you're still open to filing that 1040X, if needed (don't forget to give a copy of the 1040X to your aid office if you do file an amended return).

Undoubtedly, this can be an enormous pain in the rear for your family (nevermind your accountant) with having to file two tax returns for the same tax year. For a student who may be eligible for a $20,000 need-based aid grant, though, it may be worth the trouble.

So apply on time, triple-check with your aid office that they have all of your documents, and sit back and enjoy the summer. You've earned it!

Students at most colleges and universities are expected to maintain a minimum level of satisfactory academic progress in order to receive and retain need-based financial aid. Both institutional (the word commonly used to refer to a specific college or university) and federal academic rules are almost always referred to as an aid office's "Satisfactory Academic Progress" -- or SAP -- regulations.

Grade point average (GPA) and credit hour requirements vary depending on the type of aid a student receives. Generally speaking (again, for most - though not all - schools) merit scholarship recipients are expected to maintain an overall B average.

For need-based federal aid, federal regulations require a minimum 2.0 GPA and 12 credit hours per semester for full-time students. In addition, federal regulations mandate that federal financial aid may not be extended to any undergraduate student who takes longer than 150% of the published length of his or her program of study.

For the Federal Perkins Loan, Federal Supplemental Opportunity Grant (FSEOG), and Federal Work Study Program (FWSP), these awards require a student to achieve a minimum C (2.0) or better GPA, while also registering for and completing the number of credit hours for which a student's budget and award(s) were based. For example, full-time undergraduates must complete a minimum of 12 credits.

For the Federal Pell Grant, recipients must achieve a C (2.0) or better GPA in the number of credits on which their payment was based:

Full time: at least 12 credit hours per semester
Three-quarter time: 9-11 credit hours per semester
Half-time: 6-8 credit hours per semester
Less than half-time: 1-5 credit hours per semester

Check with your student's college for the specific institutional regulations as they apply to school-specific loans or grants. The same federal rules should be recognized and followed at any school that participates in any federal aid program.

For divorced or separated situations, the custodial parent’s financial information is required on the Free Application for Federal Student Aid (FAFSA), while the noncustodial parent’s information is not required.

Who’s the “custodial” parent? For federal student aid purposes, it’s the parent with whom a student lived most during the previous 12 months – based on the FAFSA signature date, not the prior calendar year. The same policy applies even if each parent shared equal custody. In instances where a child spends half his or her time with each parent, and both parents shared half the support expenses, an aid administrator may be required to name the custodial parent.

Some college aid offices, often those of private schools, require information from a noncustodial parent, including applicable tax documents. Other private colleges may not, but they may still assess a noncustodial parent contribution.

Perhaps one of the most contentious financial aid issues: the responsibility of stepparents. Be prepared, for financial aid purposes, a stepparent is almost always considered financially responsible for a stepson or stepdaughter, even in cases of prenuptial agreements or court orders.