​FAFSA: What Parents Need to Know About Filing the FAFSA for Federal Student Aid Money School/Education

If you’re headed to college this fall and you haven’t filled out an application for federal financial aid, you might want to complete it soon. The Free Application for Federal Student Aid (FAFSA), which you can file as early as October 1 of the year prior to entering college, determines not only how much you can get in federal grants and loans (as well as aid for work-study programs) but also how much financial aid most states and colleges will offer you. In several states, aid is given on a first-come, first-served basis, and many states have winter deadlines that are coming up fast. Some colleges also give priority to early filers.

This is the second year that college students have been able to file for financial aid as early as October 1 of the year prior to entering college. Before that FASFA couldn’t be filed until January 1 of the same year a student entered college. As a result, FAFSA forms are flowing in earlier. Follow these tips to make the FAFSA application process smoother.

• Apply, Even If You Don't Think You Qualify: As many as 2 million students a year who are probably eligible for aid don’t even apply, according to a report by the Bill and Melinda Gates Foundation. One reason is that people assume they make too much money to qualify for financial help. While your income is a factor in determining the amount of need-based aid you can get, there isn’t a specific earnings cap. Even upper-income families can sometimes qualify, depending on a number of factors, including where the student is applying. The number of children in a family and how many are enrolled in college at the same time also make a difference. So does the age of the parents with a dependent student. For older people, a larger portion of nonretirement savings is excluded from the financial aid calculation. (Retirement savings such as 401(k)s aren’t counted at all under the federal aid formula.)

• Gather Financial Documents: When you fill out the application, you’ll need your 2016 tax return, W-2s, bank statements and account records of other financial assets. You’ll need what’s known as a FAFSA ID to access the federal financial aid portal to fill out the application. Even if you’re a dependent on your parents’ tax return and need to submit their information, both you and a parent need FAFSA IDs to access the site. It can take up to three days before you can use your ID to get into the system, so don’t wait till you’re ready to fill out the form to get it. If you’re returning to school, you have to file a FAFSA every year to get financial aid, and you may have to update your password because it expires every 18 months.

• Know Your Deadlines: A number of states have early winter deadlines for the grants and scholarships they give out. In Tennessee, for example, applications for some state grants are due January 16. In Connecticut, all financial aid applications are due February 15. At least six states, including Alaska, Illinois, Washington and Kentucky, have no hard deadlines. They award money until funds run out. (Find state deadlines.) For federal financial aid, you can apply with FAFSA until the end of the academic year you’re enrolled in school. (That’s June 30, 2019, for the 2018 to 2019 year.) But consideration for programs such as work-study is given to those who apply earlier, so sooner is better for federal aid, too.

• File Online: FAFSA is long – about 100 questions – but the Department of Education has worked to streamline the process online. It estimates that it should take about 30 minutes to complete. The online application uses “skip logic,” so you see only the questions that apply to you, rather than sifting through many questions you don’t need to answer on the printed version. You can also cut down on mistakes by using the IRS data-retrieval tool, which automatically imports information from your tax returns. The tool was offline for a few months last year because of data security problems, but the IRS says it fixed the problem.

• Fill Out Other Forms as Needed: Several hundred private schools, a few public universities, and some scholarship programs also require an additional financial aid form, the CSS/Financial Aid Profile, to calculate the grants, loans, and scholarships they give out. The CSS asks for more detailed financial information. For example, while the FAFSA will use only 2016 tax-year information this year, the CSS Profile asks for projections of your 2017 and 2018 income. Make sure the information on the CSS matches what’s on your FAFSA. And check your school’s financial aid website to see whether it’s required. 

Read more of this article about FAFSA by Donna Rosato via Consumer Reports.