FAFSA Tips
These FAFSA tips will have you feeling like filling out the Free Application for Federal Student Aid (FAFSA) is simple, rather than a daunting and time-consuming task.
However, it is a crucial step in getting financial aid for college. In this guide, we will provide you with some tips on how to fill out this form correctly and make this process easy so you can get more money by avoiding common mistakes.
What is FAFSA?
FAFSA is a form used by the United States Department of Education to determine a student’s eligibility for financial aid. This includes grants, scholarships, and federal financial aid. It is also used by colleges and universities to determine need-based aid offered by their institution.
FAFSA is instrumental in the college financial planning process. It allows students and their families to understand their financial aid options and evaluate what they can afford.
By completing the FAFSA, students make themselves eligible for more financial aid opportunities. Many universities and colleges also require the FAFSA for any institutional aid they provide, making it an important step for any student seeking to offset the costs of higher education.
Additionally, some states and schools have limited funds, so they distribute their awards on a first-come, first-served basis to students who have completed the FAFSA. Hence, completing it as soon as possible can be beneficial.
Understanding FAFSA Changes
Each year, there are changes made to the FAFSA form.
The FAFSA has experienced several changes recently, designed to simplify the application process and make financial aid more accessible.
Starting with the 2022-2023 school year, you can submit your FAFSA earlier – on October 1st instead of January 1st. That means you’ll have more time to explore your financial aid options and make informed decisions.
Plus, some schools have limited funds for financial aid, so submitting your FAFSA earlier could increase your chances of receiving aid. Another change is the FAFSA will ask for income information from two years prior.
So, for the 2022-2023 school year, you’ll submit income information from 2020. This change aims to simplify the process because you may already have that information readily available. Just remember, you’ll need to update this information when you actually attend college, so keep track of any changes.
One significant change is the reduction in the number of questions on the form. The FAFSA used to require about 108 questions to be answered, but the latest version has reduced this number to a maximum of 36 questions, making it considerably less time-consuming.
The Expected Family Contribution (EFC), a number used to calculate a student’s eligibility for financial aid, has been replaced with the Student Aid Index (SAI). Unlike the EFC, the SAI can go into negative numbers, potentially increasing a student’s eligibility for aid.
Lastly, the formula used to calculate a student’s need for financial aid has been simplified. For instance, if a student or their family receives means-tested federal benefits, they will automatically qualify for the maximum Pell Grant. These changes are designed to make the process simpler and more transparent, helping students navigate the complex world of financial aid.
There are plenty of mistakes one can easily make, so in this blog post, we will outline the FAFSA tips you need to do the FAFSA right!
Get Prepared
The first of our FAFSA tips is to get prepared. The FAFSA is a form, not a test, so take your time and read the instructions carefully. Make sure you have all the necessary information, such as your Social Security number, tax returns, and bank statements. It’s also essential to complete the FAFSA as soon as possible because some types of financial aid are awarded on a first-come, first-served basis. Don’t leave free money on the table! Additionally, if you’re considered a dependent student, which typically means you’re under 24 years old, you’ll need your parents’ income information. If that’s the case, try scheduling a time to complete the FAFSA with them to ensure you have all the correct information.
You will want to have the following items ready before filing the FAFSA:
#1 Your parents’ SSNs if you’re a dependent student
#2 Tax returns
#3 Records of child support received
#4 Current account balances of savings and checking accounts and cash
#5 Net worth of investments, businesses, and farm
Let’s Get Started
#1 Save in Your Parents’ Name(s), Not Yours
Second of our FAFSA tips is key. One of the important reasons to save money in your parents’ name(s) rather than your own when preparing for the FAFSA is the way assets are assessed.
The FAFSA takes into account both student and parent assets when calculating the Student Aid Index (SAI), but they are not weighed equally.
Student assets are assessed at a much higher rate – 20%, compared to up to 5.64% for a parent asset. So, $10,000 saved in a student’s name would increase the SAI by $2,000, potentially decreasing the amount of aid a student is eligible for.
Conversely, the same $10,000 saved in a parent’s name would increase the SAI by up to $564, affecting financial aid eligibility less. Hence, it can be financially advantageous to save money in your parents’ name when planning for college expenses.
#2 Clarify Who Owns Your Assets
When filling out the FAFSA, it’s imperative to accurately specify who owns the assets. This clarity is crucial because the FAFSA calculates the Student Aid Index (SAI) based on both the parents’ and the student’s income and assets.
Misrepresenting or inaccurately reporting asset ownership can lead to miscalculations in the SAI, which could distort the amount of aid for which the student is eligible.
For example, if a grandparent owns a 529 plan (a tax-advantaged savings plan designed to encourage saving for future education costs) for the student, the distributions count as the student’s income on the FAFSA.
This could significantly increase the student’s Expected Family Contribution (EFC) and reduce their financial aid package. Therefore, understanding and accurately reporting asset ownership is a critical step in optimizing the financial aid process.
#3 Fill It Out Early, and Don’t Miss The Deadline
Of all the FAFSA tips, you may have missed this one already. Don’t worry. Focus on getting the FAFSA in before the deadline.
Filling out the FAFSA early and adhering to deadlines is integral for a few reasons. Firstly, many schools and states operate on a “first-come, first-served” basis while distributing financial aid.
Consequently, late submissions may miss out on potentially valuable aid opportunities.
Secondly, having time on your side allows you to handle any unexpected complications or discrepancies that might arise when filling out the form, preventing last-minute stress.
Lastly, early submission provides ample time for corrections if any errors are detected post-submission. Therefore, to ensure you maximize your potential financial aid, it’s recommended to submit the FAFSA as early as possible and certainly before the deadline of June 30, 2024 for the 2023-2024 award year.
#4 Use an FSA ID
You can create an FSA ID here.
An FSA ID, which stands for Federal Student Aid Identification, offers several benefits when filling out your FAFSA.
This unique username and password combination allows you to electronically sign your FAFSA safely and securely, ensuring your sensitive information is protected.
Furthermore, having an FSA ID streamlines the application process by saving your information for future applications. This means that when you need to renew your FAFSA each year, much of the information will already be pre-filled, saving you time and effort.
Lastly, your FSA ID gives you access to the Federal Student Aid’s online systems and can serve as your legal signature, further simplifying the application process.
Therefore, using an FSA ID on your FAFSA is a smart move to secure, expedite, and simplify your application process.
#5 Use the IRS Data Retrieval Tool
The IRS Data Retrieval Tool (DRT) is an excellent resource for FAFSA applicants, providing a simple and speedy way to access and transfer your tax return information directly onto the FAFSA form.
Utilizing this tool minimizes the risk of making errors when entering your financial information, a common issue that can lead to delays or inaccuracies in aid calculations. Moreover, using the IRS DRT can potentially reduce your chances of being selected for verification, a process that requires submitting additional documents to confirm the data provided on your FAFSA.
The IRS DRT not only simplifies the application process but also lends credibility to the information entered, enhancing your chances of obtaining the most accurate financial aid package. Therefore, it’s highly recommended to use the IRS DRT when filling out your FAFSA.
#6 Don’t Forget To Sign It
After all that, don’t forget to sign the form!
Forgetting to sign your FAFSA is a common but crucial mistake. The Department of Education won’t process your application without your signature, which verifies that all the information provided is accurate.
This oversight could delay your application and potentially limit the amount of aid you receive. It’s worth noting that both student and parent (if applicable) must sign.
Your signature serves as a legal affirmation, attesting to the authenticity and accuracy of the information provided. Therefore, remember to sign your FAFSA form — it’s an essential step towards securing your financial aid.
#7 Fill It Out Every Year
Yes ma’am, you need to fill out the FAFSA every year. Financial aid is not guaranteed, and your eligibility can change from year to year.
So, take a deep breath and remember that completing the FAFSA annually could help you continue to receive financial aid. If you’re renewing your FAFSA, some of your information may be pre-populated, but it’s still crucial to review everything and make sure it’s accurate. Use our FAFSA tips the second time around to check that everything is filled out accurately again.
#8 Celebrate When You Are Finished
You followed the FAFSA tips! Applying for financial aid including federal student aid and federal student loans is no joke.
Give yourself a little reward after you have completed this important step in applying for most financial aid.
It doesn’t have to be big. Take a bubble bath. Watch a movie you have been wanting to see, or watch an old movie you love that makes you laugh.
College’s cost is not a joke. and you took the time to read this article and fill out the FAFSA correctly. Take a breather for an afternoon or evening.
Need Help? There Are Free Resources
Finally, remember that there are free resources available to help you complete the FAFSA.
The Federal Student Aid website is an excellent place to start, and some states offer free help sessions. You can also contact your school’s financial aid office for assistance.
Don’t be afraid to ask questions or seek help if you need it. The FAFSA may seem overwhelming, but it can ultimately help you achieve your education goals.
What Now?
That was a lot of information, but I hope it was helpful and even a little entertaining.
Remember, the FAFSA is just one piece of the puzzle when it comes to financing your education. Don’t forget to research scholarships, grants, and other sources of aid.
And when in doubt, Google it! We live in a digital age, and there’s a wealth of information available at our fingertips.
So, don’t stress too much about the FAFSA, and always remember that you’re more than capable of navigating the financial aid process.
Good luck!
