New College Aid Profile Form Cuts Paperwork

Ambitious high school seniors--and their parents--will have to start thinking about financial aid for college students earlier this year, thanks to new “two-step” forms required by many private colleges, says Kalman A. Chany, who writes about aid issues.

The new forms are called “CSS/Financial Aid Profiles” and they’ll be required of students who want to go to any one of roughly 600 public and private colleges and universities--as well as those who want to apply for more than 100 generous scholarship programs.

Among the colleges and universities requiring the profile forms are the University of Southern California, Stanford University, Loyola University of Chicago, Univerity of Notre Dame in Indiana, Iowa State University, Harvard, Tufts, Wellesley, Dartmouth, Colgate, Columbia and Cornell.

The point of the new form is to cut down on the number of aid applications that parents must complete when their child is considering numerous private colleges, says John P. Joyce, associate director of information and training at the College Scholarship Service in New York.

Since Congress revamped federal student aid formulas in 1993, students have been forced to fill out a growing number of aid applications. Today, if your child is considering six private universities, it’s not unusual for the parents to have to fill out seven separate aid applications--one for federal government and one for each college under consideration.

Each aid application consists of four-to-six pages of dense, complicated questions. Worse yet, while much of the required information is redundant, the applications are not standard. So, parents can’t necessarily just copy their answers from one application to another.

Why all the differing applications? The answer revolves around what income and assets are and aren’t included when aid analysts determine how much a family can spend on college bills. In general, all college financial aid formulas say that a student can spend almost all of his or her assets for college, while the student’s parents can spend between 6% and 12% of their assets and income to get the kids through school.

However, in an effort to aid middle-income families, Congress decided that home equity and retirement plan savings should not be included in a family’s assets, when calculating their ability to pay for college. The changes were made in 1993 because middle-income families complained that their built-up home equity made it impossible to secure financial aid--even when they couldn’t borrow against this equity because their income was insufficient to pay on a home equity loan.

As the result of the new rules, financial aid eligibility was vastly broadened and thousands of new students qualified for aid, Joyce says. However, the federal government did not dedicate additional money to paying the bills, which placed a bigger burden on colleges to come up with private aid dollars to meet a rapidly expanded amount of “need.”

Instead of just accepting the federal government’s new formula, many expensive private colleges demanded that students fill out separate financial aid applications to qualify for school-based scholarships, loans and grants. The school-based forms would include questions about the equity parents had in their homes and, often, in their retirement accounts--as well as anything else the school deemed pertinent.

But each school required slightly different information and calculated need differently, too, resulting in wide gulfs between the aid packages offered by one school versus another.

The new profile form aims to eliminate all the separate applications by creating a standard aid form for private colleges that has just one “customized” section. That section would include any additional questions required from all the private schools an individual student selected.

The downside to the profile form is that students must “register” to get this customized aid form. You register by filling out a form that says where you plan to apply for admission. And you pay a fee that’s based on how many schools that you want to receive your aid application. CSS then customizes the aid application for you, based on the schools you’ve chosen and the questions those schools say they need answered for students applying for aid.

It takes between four and six weeks before you actually get the customized aid application, so the registration forms must be filled out early, says Chany, who is the author of “The Princeton Review Student Access Guide to Paying for College.”

Otherwise, you might miss college financial-aid application deadlines, which can cost you thousands of dollars in aid, he says.

The registration form for the profile aid application--as well as the list of colleges that require it--is currently available in high school guidance offices, Chany says. Students who hope to attend a private college that requires the profile aid form should complete the registration form by the end of November or early December, at the latest, he adds.

“A lot of parents are complacent. They think January is when you need to start thinking about aid,” Chany says. “But if you weren’t aware that you were going to have to file the profile, you’d going to miss the deadlines unbelievably. That can cost you a fortune.”

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Kathy M. Kristof welcomes your comments and suggestions for columns but regrets that she cannot respond individually to letters and phone calls. Write to Personal Finance, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or message kristof@news.latimes.com on the Internet.