The cost of a college education has soared in the past 20 years. According to the College Board, students in 1990 paid an average of just over $1,900 per year for in-state tuition at public four-year universities. In 2017, average tuition at those same schools was a bit shy of $10,000.
Many students turn to federal financial aid such as student loans or PELL grants to help pay for college. However, filling out the Required Free Application for Federal Student Aid, or FAFSA, can seem like a daunting process. Students and parents can use this guide to seamlessly navigate the entire FAFSA process, as well as gain crucial insight into common mistakes applicant’s make and expert advice about the FAFSA.
Below are many of the most common questions students and parents have about filling out the Free Application for Federal Student Aid. Read on to learn more about tips and strategies to successfully complete the FAFSA and avoid common missteps and miscues that can lead to delays in completing the document and receiving federal financial aid.
Student financial aid expert Mark Kantrowitz provides insight on many of these questions. Kantrowitz has written about financial aid for the New York Times, Wall Street Journal, Washington Post, Reuters, U.S. News & World Report, Money, Newsweek and Time. He also is the author of four bestselling books about financial aid.
Students who qualify as dependents must include their parent’s financial information so the federal government can determine the family’s ability to pay for college (called the Expected Family Contribution). However, in certain situations students are unable to include this crucial information. There are special circumstances in which dependent students still can submit a FAFSA without their parent’s financial data. Typically, however, the only aid most students who fall under these circumstances qualify for is unsubsidized Federal Stafford Loans. Students who qualify as independents don’t need their parent’s financial data to complete a FAFSA.
Many factors influence the date of aid disbursement, Kantrowitz notes. Aid disbursement varies by institution, by when students submit a completed FAFSA, and by when they are admitted into a college or university. Disbursement also varies for new students and for returning students, he adds. Students should strive to fill out the FAFSA as soon as possible on or after October 1. Students who submit a FAFSA near the Oct. 1 date and are admitted to an institution might receive an award package from their college in early March or late April of the following year. This award details costs of attendance, along with federal grants, loans, work-study and other forms of aid students are eligible to receive. Students have until May 1 to accept the offer — this date is known as national decision day, or national candidates reply date.
Yes. A FAFSA is only valid for a single year’s financial aid. However, renewing a FAFSA is much simpler since it’s fairly easy to copy key non-financial information over to a new FAFSA from year to year for applicants who completed their original FAFSA online.
File the FAFSA first, and file as close to Oct. 1 as possible. “The early bird gets the grant,” Kantrowitz says. “You can file as late as the last day of classes, but there are about a dozen states that award on a first-come, first-served basis or until the money runs out.” While Pell grants and student loans don’t have limited funding, some forms of campus-based aid do because each college is awarded a fixed allocation of funds. When those funds are fully allocated, they are gone.
No. Students who seek federal financial aid must file a FAFSA; students who do not need or want federal or institutional aid are not required to file a FAFSA.
The Department of Education reports that most applicants can complete the process in under an hour – less for students who are doing a renewal FAFSA.
If students (and their parents for dependent students) are required to file a federal tax return, they must include that financial data on their FAFSA. Students who are required to file with the IRS and do not file a tax return will not be eligible for federal financial aid because of the conflicting financial information. The FAFSA uses tax returns from two years prior to the application date (called the prior-prior year formula, or PPY). Be sure to have this information on hand when filing out the FAFSA.
Students can fill out the FAFSA as early as October 1 for the next school year. For the 2018-2019 academic year, students can fill out the FAFSA from Oct. 1 of 2017 through June 30 of 2019, and for the 2019-2020 academic year from Oct. 1, 2018 through June 30 of 2020.
This is a bit of a tricky question, since there are many different aid programs, such as federal Stafford Loans, Pell grants, work-study, state grants and more. However, students’ (and parent’s for dependent students) income and asset information, along with certain demographic information, is used to calculate the Expected Family Contribution (EFC) – the measure of a family’s financial strength and its ability to pay for college. College financial aid departments determine student financial need, which is the cost of attendance minus the EFC. Student loans are not based on financial need.
Once students’ accept their award packages, the money is disbursed to the college, which applies funds to all fees and institutional charges. Any remaining credit balance is then distributed to students. These days, Kantrowitz says, credit balances are applied either through debit cards or electronic funds transfer to students’ bank accounts, and sometimes by check. Colleges usually pay out money in one disbursement per academic term. Students enrolled at quarter-based universities can expect payment at the start and middle of their academic year. First-time borrows also may have to wait 30 days after school starts for their first distribution, the Department of Education reports.
Kantrowitz says it’s because tax returns are verifiable financial information. “People don’t lie to the IRS,” he says. “They can be verified as the same figure you gave to the IRS, so it improves accuracy.”
The federal deadline for filing a completed FAFSA for the 2018-2019 academic year is June 30, 2019. For the 2019-2020 academic year, applications must be submitted by June 30, 2020. States have different deadlines for submitting a completed FAFSA, and colleges may have different deadlines as well. Students can check the Department of Education’s 2018-2019 FAFSA deadlines and 2019-2020 FAFSA deadlines as well as with their college’s financial aid office to ensure they adhere to all pertinent FAFSA timelines.
An FSA ID is a username and password students and parents create when they access federal student aid and Department of Education websites such as studentloans.gov or fafsa.gov. Students and their parents must have their own FSA IDs, the Department of Education notes, and parents and students can create an FSA ID here. The FSA ID also is used to electronically sign the FAFSA and other documents; as such, it is a legally binding electronic signature. Kantrowitz advises students to also add a cell phone number to their user profiles on such sites. “When you forget your password or the answers to security questions, having them text to your cell phone is an easy way for password recovery. Otherwise you will be pulling out your hair – it can be incredibly frustrating.”
The IRS Data Retrieval Tool allows FAFSA applicants to pull data from federal tax returns to their FAFSA to save time when completing the crucial financial parts of the FAFSA. Kantrowitz says a key benefit of using the tool is that financial data is not subject to verification, which significantly reduces applicants’ odds of having their FAFSA selected for verification. “It saves a lot of bureaucratic hassle.”
The federal government provides many different free resources to help applicants navigate the FAFSA process. These include the FAFSA Hotline at (800) 433-3243 (800-4FED AID), though emailed questions and an online help button when filling out the FAFSA online. There also are many different FAFSA preparers who help applicants navigate the process for a fee. The advocacy group Form Your Future also provides a free 25-page FAFSA guide. Kantrowitz also suggests students speak with school guidance counselors or financial aid administrators at their colleges.
Filling out the FAFSA doesn’t have to be a long and difficult process – applicants who follow these steps will find themselves at the end of the application in short order. The majority of students and their families complete the FAFSA online, the Department of Education reports. Students and parents can download a PDF version of the FAFSA and mail it in, or order a complete printed version of the document by calling (800) 4FED-AID.
Applicants also should have some key documents at the ready. These include:
The Department of Education also has a FAFSA worksheet applicants can use if they plan on filling out the FAFSA online to familiarize themselves with the required documentation and questions.
The first step in filling out a FAFSA is to log into fafsa.gov and select the button to start a new FAFSA (or “renew” if applicants have previously filed a FAFSA). New applicants will create a FSA ID to gain access across Department of Education financial aid websites. Students and their parents do not share FSA IDs – they are unique to each individual; however, parents can use their same FSA ID to electronically sign multiple FAFSAs if they have more than one child applying for aid. However, only one parent of a dependent student needs a FAFSA ID – it’s not necessary for both to fill out the form.
When creating a FSA ID, applicants will be required to provide the following information:
They also can register their mobile phone numbers to receive texts in case of forgotten password/login information. Lastly, applicants will be asked to choose a language preference and establish four security questions and answers. Note that FSA IDs expire every 18 months unless updated.
Each applicant must provide special information to establish privacy and security. Questions 1-31 in the FAFSA include:
Every applicant must complete questions 32-45, which deal with the following:
All applicants also must answer questions 46-58, which establishes whether a student is considered a dependent or independent. Questions include:
Dependent students and parents must answer questions 59-94. These include:
Questions 95-102 are for independent students. These questions include:
Applicants who file online can select up to 10 schools that will receive the information contained in their FAFSA. Students also can select their desired housing options – on campus or off campus. Students who fill out a paper FAFSA can only submit up to four college choices.
The final six questions on the FAFSA deal with electronically signing the FAFSA. There’s a section for students and parents to sign and date the document, as well as a section for a paid FAFSA preparer to sign and date if applicants engaged third-party help to complete the form.
Whew – you’ve successfully navigated more than 100 questions and completed the FAFSA! You’re almost in the clear — just a bit of housekeeping and the ball is completely out of your court.
Applicants who successfully complete and submit the FAFSA will see a confirmation page when filing online. Oftentimes, a link appears for students to complete a state financial aid application as well, since many states require applicants to complete a second application to determine state-level aid eligibility.
The confirmation page also includes an option to have parental or custodial information electronically transferred to another FAFSA, which can save a great deal of time for parents who have multiple children seeking federal financial aid.
Once all FAFSA and state-level aid applications are completed, the information is sent to the financial aid offices of the colleges and universities students list on their FAFSA. Information also is sent to the higher education agency in students’ home states, as well as the states where they’ve applied to school. Students and parents can always check the status of their FAFSA by logging back in to the fafsa.gov site.
Next, students and parents should keep an eye out for a Student Aid Report that summarizes the data they submitted on the FAFSA, as well as provides basic information about aid eligibility. Applicants who included an email address will get a notification about accessing their SAR online, which is usually ready in about three days to three weeks after submitting a completed FAFSA. The document is also sent via postal mail to applicants who did not include an email address.
Some applicants – especially those who did not use the IRS Data Retrieval Tool, as noted by our financial aid expert above – may be selected to verify the data they submitted on the FAFSA. This doesn’t mean applicants have done anything wrong; rather, their prospective schools are seeking additional documentation to ensure accuracy on the FAFSA. Applications also can be selected randomly for verification. Be sure to provide all pertinent documentation and data by the requested deadline, or applicants might be ineligible to receive federal and state-level financial aid.
Students who have been accepted to the schools they listed on their FAFSA will receive an award letter from that institution’s financial aid office. This award letter informs them how much and what types of aid they are eligible to receive, such as grants, loans and Federal Work-Study. The timing of award letters is dependent upon on several factors, including when students applied for aid, and the institution’s method of awarding aid. Eligible students must determine what types aid to accept.
Monies are dispersed directly to colleges and universities, which then distribute funds to students once all institutional fees are paid. Students should note that financial aid could be reduced if they drop classes once the semester begins, especially if they fall under full-time status, and they may be required to pay back financial aid funds.
Ronald Ramsdell is the founder of College Aid Consulting Services in Minneapolis. He’s spent more 27 years advocating for improvements in the identification of financial aid opportunities and matching the right programs to family’s needs.
Ramsdell provides insight into two crucial areas of the FAFSA process: The importance of filing early, and three common mistakes to avoid when filing out the FAFSA.
For the 2018-2019 academic year, the federal deadline to file a FAFSA is June 30, 2019, and for the 2019-2020 academic year, June 30, 2020. Families think they have that much time to do the FAFSA, but that’s a federal deadline. Be sure to check each college’s deadline, as some will have January deadlines, February deadlines, or even March deadlines.
File as soon as possible to meet college and state deadlines. Various states have earlier deadlines than college deadlines. If you file later, you have the potential to miss out on state or institutional aid. Families also need to be aware that some colleges have their own institutional form they use to determine institutional aid, and it benefits applicants to file early so they can be aware of that potential extra step.
Avoid these three common mistakes that often discount families from receiving good gift aid from colleges.
Families are not required to list these as assets. The formula that crunches numbers for the FAFSA does not assess retirement plans and annuities, but if families put in these numbers under investments it’s going to needlessly raise their EFC calculation, and that means less eligibility for aid.
If you are off by just one digit, it messes up the whole process. It takes an act of Congress to get everything right. Parents or students will be on phone numerous and lengthy times trying to get situation rectified. Make sure you put down the right social security numbers.
Using the incorrect household’s financial data can increase or decrease financial aid immensely. If it’s a 50-50 situation where the student resides with both families, use the custodial parent household information that has the lower wages and assets. If you have a situation where a dependent spends 70 to 80 percent with one parent, obviously you need to use the parent where the student resides. But if it’s 50-50, use the lower one.
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