<p>Our 2006 Tax year is very unusual, and based on that our EFC is high for that year. Our predicted EFC based on 2007 income would be almost half. However, I forgot to include that on the unusual circumstance section of the CSS profile that I submitted yesterday. </p>
<p>How do colleges use 2006 Tax information provided in CSS profile when calculating students financial aid eligibility?<br>
Wouldn’t the 2008-2009 financial aid eligibility be based primarily on 2007 Tax information?</p>
<p>For the 2008-2009 school year, your tax information for the 2007 year will be used primarily. When doing the Profile NOW (before those taxes are filed), you should use the best possible estimates based on your pay information for the year to date, and calculate out until the end of the year. Did you use 2007 estimates on your early profile submission or did you use info from 2006? I believe you should have used 2007 estimates. The Profile doesn’t ask for previous year’s income…does it??? However, you do need to know that some colleges do request tax returns for two previous years. These colleges can use this information as they choose because most of them are awarding institutional aid and using their formula to compute that. You should call the finaid office and ask who you should send a letter to explaining the large difference in your family income from 2006 to 2007. However, be alerted that some schools may think that part of that 2006 larger income could have been earmarked for college expenses…I do not know this for sure, but why else would they ask for two years of returns?</p>
Sometime around February for the RD schools, you should write a “special circumstance” letter to the financial aid department of each, detailing any sort of information that you feel will be helpful evaluating your situation. Before writing it, go to [FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org) and look up “professional judgment” to get a sense of various issues that the colleges might consider. </p>
<p>I has a situation a lot like yours and it actually worked in my favor, because I had unusual high state income tax liability from the prior year, which was deducted from my schedule A the next year; my d’s college treated that the same as if it had been federal income tax paid, and actually revised the FAFSA to show a larger amount of taxes paid in the year with the lower income. This ended up qualifying my daughter for a Pell grant.</p>
<p>I have since learned (same college) that the CSS Profile is not looked at that closely, so it isn’t good enough to write stuff in on that form anyway – they may miss seeing it. I had my d’s grant increased by several hundred dollars this year because of information that was reported on the CSS, but they didn’t account for – it was only through a very long discussion with a financial aid rep at the school that it was determined that this factor had not been considered. (You can be sure I will be proactive about that next year!)</p>
<p>This could hurt us big time. My daughter will graduate high school in 2009. I thought we would only be required to show 2008 tax information. Our 2007 income includes a large severence payout from my husband’s previous job. It’s unlikely we will ever return to that level of income as he has not been able to find permanent employment. I’ve filled out calculators based on projected income for what I thought would be the year under consideration (2008). How do they factor in the year before?</p>
<p>Thanks Calmom for the suggestions. Let’s hope that they don’t look closely at our 2006 earnings. In any case, I plan to write to finaid office around February.</p>
<p>Our 2006 income was about 30% lower than our 2005. For the present school year, we had to include both, but it is clear that the FA was based on 2006 income, not 2005. So at least at S’s school, the "higher’ income did not hurt us. Actually, for about the last few years, our income had been lower each one than the year before. FA seemed to reflect the current, not the past.</p>