Most of you know by now that two key applications play crucial roles in financial aid: the CSS Profile and the FAFSA, each using their respective formulas to determine financial need. But did you know that there is a third formula? It's true; this formula is known as the Section 568 or Consensus formula. we don't hear very much about it because the Consensus is used by a very limited number of colleges and universities in the U.S. Let's talk about how the Consensus stacks up against the FAFSA and CSS Profile.
Aspects of the Consensus that are Similar to the FAFSA and CSS Profile
- In all three formulas, retirement assets are exempt from wealth tax.
- Income taxes are counted, including taxes on 401 (k) and IRAs, so deal with these assets early to avoid them being counted against your overall family assets.
Differences between the FAFSA, CSS Profile and Consensus Formulas
- FAFSA calculations exclude the value of your house, farm, small business and other property.
- CSS and Consensus formulas consider the incomes of both parents while FAFSA gives considerations for when the lower-income parent of a divorced couple has custody of the student.
- CSS considers a broad range of family assets when determining financial need, including farms, businesses, home equity, 529 college funds and more.
- Consensus considers home equity up to 120% of the parents’ income.
- FAFSA taxes parent assets at a rate of 5.6% each year, while CSS and Consensus tax only at a 5% rate. So, for every $100,000 you have, college costs will increase either $5,600 or $5,000 a year.
- Under all formulas, student assets are taxed too. CSS Profile taxes at 25%, FAFSA at 20% and Consensus at 5% each year.
- Consensus does not count the 529 college fund as student income.
Consensus/Section 568 Schools
For easy reference, the following schools utilize the Consensus formula method:
- Georgetown
- Grinnell College
- Haverford College
- MIT
- Middlebury College
- Northwestern
- Pomona College
- St. John’s College
- Swarthmore College
- University of Chicago
- Notre Dame
- U Penn
- Vanderbilt University
- Amherst College
- Boston College
- Claremont McKenna College
- College of the Holy Cross
- Columbia
- Cornell
- Dartmouth
- Davidson College
- Duke
- Wellesley College
- Wesleyan
- Williams College
FAFA, CSS, Consensus...Who can keep up with all of these applications and financial aid calculation methods? It's difficult, however, the pros are here to help! Never be afraid to head to the search engines for answers and even better: get in touch with Go Financial Aid anytime for the very best financial aid solutions available.
