What exactly is changing?
Starting in Fall 2013, Grinnell College is requiring every applicant for financial aid to submit the College Scholarship Service (CSS) Profile instead of the Grinnell Application for Financial Aid. All students and parents will receive a letter and email detailing the new financial aid application requirements.
When will it change?
These changes will take effect in the 2014-15 academic year. This means families must complete the Profile by April 15, 2014, in order to qualify for the maximum amount of financial aid for which their student is eligible in 2014–15.
In addition to the CSS Profile, families who wish to apply for aid will be required to submit the following:
- the 2013–14 Free Application for Federal Student Aid (FAFSA);
- signed copies of the parent’s/parents’ and student’s 2013 federal tax returns, including all schedules;
- the parent’s/parents’ 2013 employer W-2s; and
- a non-custodial parent statement, if applicable.
Why are you changing your process?
Over the last several months the Office of Student Financial Aid reevaluated the financial aid application process at President Kington’s request. We concluded that the existing process, which required a variety of documents and the retrieval of detailed data from the IRS, was excessively burdensome.
The change is also compliant with Grinnell’s membership in the 568 Presidents’ Group. The Group is a partnership of need-blind colleges and universities nationwide that cooperate to the extent allowed by law in determining financial need. Grinnell is the only college in the Group that had not yet adopted the CSS Profile. Doing so will help us calculate financial need in ways consistent with best practices in higher education.
Finally, research has shown the CSS Profile to be a more comprehensive and accurate assessment of family resources, including assets that were not consistently accessible by our previous process but should reasonably be considered in making award decisions. These include the resources of non-custodial parents, significant business and real estate holdings, etc. Only a very small number of families may see their awards reduced as a result of the shift. Unless there are significant changes in your family’s financial circumstances, these procedural changes will generally not impact how your financial aid eligibility is calculated.
In short, the new process is intended to simplify and streamline the way students submit financial aid information to our office; calculate need in ways consistent with best practices in higher education; and provide a more accurate assessment of family resources, leading to a just and fair allocation of gift aid.
How do I complete the new process?
Applicants for financial aid should complete the Profile online at http://profileonline.collegeboard.org by no later than the priority financial aid deadline of April 15, 2014.
The following information is offered in response to additional questions, received primarily from members of the College’s parent listserv:
Last year, the College indicated that specific financial aid initiatives would be grandfathered in so that current students would not be affected by changes that could disrupt their financial aid. Isn’t this a violation of that position?
It is not. The new application requirements simplify the process for submitting financial aid information to our office. Grinnell’s past application was quite labor-intensive, and many families found it challenging to fulfill the requirements. The college is making a serious attempt to resolve these deficiencies by conforming our process to best practices in higher education.
The implementation of the College Board’s CSS Profile for returning students will allow consolidation of all remaining forms and submissions into one application. Unless there are significant changes in your family’s financial circumstances, these procedural changes will generally not impact how your financial aid eligibility is calculated.
Will my Expected Family Contribution (EFC) increase because you introduce the Profile?
Grinnell is not implementing the CSS Profile in order to reduce students’ aid. And such reductions are unlikely, although they may occur in a very small number of cases where the Profile reveals additional resources that a family can reasonably be expected to contribute.
We have always requested home equity, business value and assets as part of the needs analysis and, in many situations, have calculated a higher contribution than indicated by the FAFSA application.
How will my retirement plan affect the calculation of my family need?
The value of retirement plans—401(k) plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.—is not counted as an asset. But contributions, as reported accordingly on the W2 will continue to count as income. Distributions from the retirement plan will appear in the AGI if taxable. This is true whether the distributions are lump-sum or annual. Similarly, the cash value or equity of a whole life insurance policy is not reported as an asset, but settlements are counted as income.
The major exception to this rule is that pension distributions are not reported if they were rolled over into another retirement plan during the same tax year.
Will cost-of-living differences be considered in the calculation of my financial need?
Grinnell recognizes that the cost of living is different in Manhattan, Kansas, from what it is in Manhattan, New York. Starting this year, the College will employ an alternative income protection allowance table that takes into account significant regional cost-of-living differences.
My family has a hard enough time covering the expenses of one student in college. How will I manage the cost of enrolling a second student at the same time?
The College takes college-bound siblings into account when calculating a family’s need. In recent years our need analysis formula divided the total parent contribution by the number of siblings enrolled in college, producing an expected Parent Contribution for each sibling. This approach awarded more generous aid to families with children who were close in age, while penalizing those whose children were born further apart and thus were not attending college at the same time.
Starting this year, we will now consider the number of children enrolled simultaneously in an undergraduate program, but instead of dividing the Parent Contribution by the number of students enrolled we will reduce the calculated Parent Contribution by 40% for families with two students in college, and by 55% if three are enrolled simultaneously. This practice is consistent with that of the 568 Presidents’ Group member institutions.
The table below illustrates how families with different numbers of enrolled children will be affected:
There are several qualifiers to this policy:
- Siblings enrolled in graduate/professional schools, or who are 24 years old or older, will not be counted as being in college unless the family can document that the enrolling institution regards that sibling as still dependent for aid purposes, and can show that they are paying the assigned parent contribution. These siblings will, however, still be included in calculations of household size.
- Siblings receiving full merit or athletic scholarships will not be considered in the number of enrollees, but will still be counted in calculations of household size.
- Siblings enrolled at community colleges and other low-cost schools will not be included in the number of enrollees. However, the College will reduce such families’ Parent Contribution through an allowance for the cost of tuition and mandatory fees at those schools.
- Parents themselves cannot be counted as enrollees for the purposes of calculating Parent Contribution. If, however, a parent takes courses in response to a workplace requirement or needs retraining after a job loss, Grinnell may, at its discretion, include such unreimbursed tuition in its calculations.
How will my home value, business and farm assets, etc., affect my student’s financial award?
Every family’s financial picture is different. But, in general, assets play a much smaller role in the needs analysis formula than earned and unearned income do. Furthermore, Grinnell has always collected home value/debt, assets and business value information as part of our analysis of financial need. So moving to the CSS Profile should not generally result in a change to the analysis of such value, or to your financial aid award, assuming that your family’s financial circumstances have not changed recently and your financial information has been accurately reported in previous years.
How will Grinnell compute the asset protection allowance? And will it be the same for all assets, or will you treat home equity differently?
Members of the Presidents’ 568 Group rely on what is known as “Consensus Methodology” to determine the percentage of discretionary net worth a family should reasonably apply toward their student’s education. The methodology treats all parental assets equally. What counts as an asset? Both the FAFSA and CSS Profile collect current (as of the day you sign your financial aid application) data about cash; savings and checking accounts; investments; businesses; and investment farms/farmland.
Within the savings and investments categories, calculated assets tend to appear in the following forms:
- college savings plans
- Coverdell savings accounts
- real estate
- installment and land sale contracts (including mortgages)
- trust funds
- mutual funds
- money market funds
- UGMA and UTMA accounts
- certificates of deposit
- stocks and stock options
- bonds
- commodities
- precious metals
In the businesses and farms categories, the following are assessed at current market value:
- land
- buildings
- machinery
- equipment
- livestock
- inventory
Net worth of a business or investment farm is calculated on the basis of current market value and debt owed. Business or farm debt includes only those debts for which the business or farm was used as collateral.
Finally, when determining a family’s asset contribution, the College provides allowances for the following:
- Emergency reserves, based on total number of people in the household;
- college expenses for siblings soon to be enrolled, based on the age of the siblings;
- a home equity cap, based on total family income; and
- adjusted net worth for business/farm values.
Grinnell maintains a policy that a family’s contribution from assets cannot exceed 5% of their discretionary net worth.
How will this affect my actual application process?
You will still be required to submit the Free Application for Federal Student Aid (FAFSA). In addition, you must now submit the College Board’s CSS Profile. The Profile submission costs $25. Unfortunately, the College Board does not offer waivers for currently-enrolled students.
In addition to moving to the CSS Profile, Grinnell will now use the College Board’s Institutional Documentation Service (IDOC) service. Through IDOC you will be asked to send your tax data and requested documentation to the College Board for imaging, at no additional cost to you. Any documents we receive from you for 2014-15 will be forwarded to the College Board for imaging purposes. These modifications will enable us to deliver timelier award notices and be more responsive to the high volume of questions our office receives about awards during the summer especially.
What is IDOC?
The College Board's Institutional Documentation (IDOC) Service collects applicants’ documents on a school’s behalf. The College Board will tell you when and how to submit the required documents. Once IDOC receives your documents, the College Board will provide electronic copies to Grinnell. We will use these documents to verify CSS Profile and FAFSA information and understand your family's financial circumstances.
What happens if I file a tax extension for 2013?
In order to receive an estimated financial aid notification you will have to provide the Grinnell Office of Student Financial Aid with a copy of your federal extension. Your aid award will not be penalized by the extension as long as: a) Grinnell receives the copy of your extension by April 15; and b) you submit your official tax returns to the College by either the August or October deadline (depending on which schedule you have chosen).
How can I track the status of my financial aid application?
Grinnell’s Office of Student Financial Aid communicates with students and parents by e-mail. Since personal e-mail accounts can change regularly, students need to monitor their campus PioneerWeb account and read and respond to official college e-mails promptly. It is your student’s responsibility to keep track of deadlines. Failure to comply with posted deadlines will result in a reduction of grant assistance that the student would otherwise have been eligible to receive.
Will these changes impact financial aid awards?
Again, these procedural changes will not generally impact how financial aid eligibility is calculated and awards are determined. Most current Grinnell families will not see a change to their financial aid awards, assuming that their financial circumstances have not changed recently, and that their financial information has been accurately reported in previous years.