Today I want to list some actions you can take now that will make life easier throughout the rest of this school year improve your financial aid awards. This information is immediately relevant to families with high school seniors or current college students. If your child is younger, you may want to get ahead by understanding the process now.
Here’s the big news for 2016—the FAFSA application will open on Friday, October 1 this year. In the past families began the FAFSA in January while they tried to estimate their past year’s income tax information. Now you will use your already completed (hopefully!) 2015 tax return.
What is the FAFSA?
FAFSA, the Free Application for Federal Student Aid, is the first step in the process of obtaining need-based aid from colleges and universities. The FAFSA is a means of evaluation. Completing the FAFSA is like being let in the front door. It doesn’t award you any aid but it’s your first step in the right direction.
Who gets financial aid? Should we apply?
Lots of people. Even middle-class and upper-middle-class families receive financial aid.
Financial aid is based in part on your family income / assets. The other factor in determining financial aid is the cost the college or university your child ultimately attends.
Financial aid is intended to cover the gap between the Expected Family Contribution (EFC) and the cost of a year’s education at a particular institution. A family with an EFC of $30,000 may not qualify for financial aid at a state university with an expected annual cost of $26,000. However, that same family would qualify for financial aid at the private university that costs $60,000 a year to attend.
How do we know if we qualify?
(Or, do we make too much money to apply?)
There are some online tools to help you estimate cost and financial aid. A good resource is the FAFSA4caster Of course, a lot of the equation depends on your family’s final college choice which may not be determined for months. So the first step in the application process is the Free Application for Federal Student Aid (FAFSA).
How can you submit the FAFSA?
You can save time and frustration by completing the FAFSA online at https://fafsa.ed.gov
There is an option to complete a paper copy of the FAFSA, but you are more likely to experience delays and data entry errors if you send in a paper application. In this day and age, even for people who don’t have regular Internet access at home, it is well worth completing the online FAFSA even if you need to use a computer at the local library, university, or high school.
How do you apply?
Step 1. You need to get a FSA ID which takes the place of the old pin number. This ID allows you to electronically access and sign your FAFSA application. The process should take less than 5 minutes and can be completed online at https://fsaid.ed.gov/npas/index.htm
Once you have a FSA ID put it somewhere where you will be able to safeguard it, but where you won’t forget or lose it before it’s time to file.
Step 2. Complete the FAFSA application. The window for submitting the FAFSA opens October 1st of a student’s senior year of high school. You will want to have these details handy:
- Social Security Number (or Alien Registration Number)
- 2015 federal income tax returns
- Bank and investment statements
- Records of any other income that may not be included on your tax return (untaxed income)
The FAFSA looks at student and parent finances, so have these documents handy for you and your student.
Step 3. Submit and wait. Once your data is processed, you will receive an SAR or Student Aid Report. The SAR is essentially a summary of the information you submitted in your FAFSA.
Verify the accuracy of the data and pay careful attention to your EFC– your Expected Family Contribution. This is the amount your family is expected to pay for college next year.
Step 4. Send your FAFSA results to all of the colleges on your list, complete any school specific aid forms, and wait. The FAFSA is the tool to start the process, but it does not award funds; individual schools do. Think of the FAFSA as one part of your application, like the SAT. Make sure you have completed all other required paperwork for financial aid at every college you are still considering. Contact financial aid departments if you have questions or special circumstances. Colleges should contact you with financial aid offers in the spring (and possibly in the fall once your are officially admitted.)
Do you need help completing the FAFSA?
If you can copy numbers from your bank statements and tax return, you can complete the FAFSA without paying someone to help. FAFSA questions about income will prompt you with the exact line numbers from your tax return, so you aren’t left guessing. Take a look at the FAFSA worksheet to see for yourself: https://studentaid.ed.gov/sa/sites/default/files/2017-18-fafsa-worksheet.pdf If you want to pay for help, you can, but they can’t “find” you extra money; they will just enter your numbers and hit the submit button. You can do this.
Do it now!
The FAFSA starts holding your place in the financial aid line. If you submit it now (in October) you will be in the front of the line when colleges start distributing the “good” aid like grants, which do not need to be paid back. If you forget to fill out the FAFSA or wait until April when you find your son actually was admitted to that really expensive Ivy League school (yes, this happened to a former student of mine), you will find the only aid remaining is student loans.
Ask if you need help.
I’m not a financial guru or a CPA. When I have questions, I pick up the phone and ask for advice. I’ve gotten plenty of free help from college financial aid officers. Additionally, you will find a live chat feature on the FAFSA site to help with questions and most area community colleges offer sessions to help parents and students complete the FAFSA. If you need help, ask.
I’m glad to see the FAFSA timetable start earlier this year. I think it puts the financial process in line with the college application process and helps families with the reality of selecting schools that will ultimately be affordable.