The FAFSA: What You Should Know

By not completing the FAFSA application, more than $3.75 billion in potential aid to an estimated 813,000 college students went unawarded in 2021.

It’s important for you and your family to complete the FAFSA application before graduation, for need-based aid and many merit-based programs as well.

FAFSA (Free Application for Federal Student Aid)

Who? Every student who will enroll in a post-secondary education program should complete the FAFSA. Even if your family income/assets prevent your student from receiving need-based aid, many merit-based programs require completion of the FAFSA.

When? FAFSA applications open nationwide October 1; closing dates (January 15-July 1) differ by state and by college or university.

Why? To be eligible for any kind of federal student aid – including grants, work-study and loans – students must complete the FAFSA. Most states, colleges and universities, and even private foundations also use the FAFSA to determine qualifications for merit awards.

Where? Apply online at

How? Students and parents must use their own individual FSA ID to log in, and each will need his or her own social security number to do so. Parents can start a FAFSA by entering a student’s identifiers. Parents can work on a FAFSA form or make a correction to a form the student started using the Save Key created by the student. The FAFSA includes 6 sections:

  • Demographics
  • School Selection (up to 10 schools)
  • Dependency Status
  • Parent Demographics
  • Parent Financials
  • Student Financials

To ensure more students receive aid, some states (Illinois, Louisiana, and Texas) require the completion of a FAFSA application as a high school graduation requirement. Here’s some important information to make sure your student receives all the financial aid possible:

Apply for the FAFSA Early, Every year

Early FAFSA completion helps you apply early to schools, and early students may see more generous financial aid packages than those who apply regular decision. Historically, students who applied in the first three months received DOUBLE the grant money compared to those who waited to apply until spring. If you are a first-time FAFSA filer, you and your student must separately apply for an FSA ID prior to completing the FAFSA. It can take several business days to process your FSA ID. Make sure you have your child’s social security number handy. Write down your FSA ID and password AND your student’s (you’ll need to create separate ones) and keep them somewhere safe—you’ll need them again next year! Beware of government holidays and/or unexpected maintenance (three weeks in 2018). Don’t wait to complete the FAFSA.

Base Income Year

The FAFSA is based on tax information from the Base Income Year: January 1 of your student’s junior year through December 31 of your student’s senior year. (Calendar year 2018 for 2020 incoming freshmen) Simplify the process and easily populate tax information by using the IRS Data Retrieval Tool on the online FAFSA form. For parents who receive W-2s as employees, the FAFSA should be easy. For business owners, you may need to visit with your financial advisor. Otherwise, you will need several documents: bank statements, records of investments, federal income tax returns, W-2s, and records of any untaxed income.

CSS Profile for Private Institutions

Around 400 private institutions require a second form called the CSS Profile, a tool owned and operated by the College Board. To complete a CSS Profile, sign in with your College Board login. You’ll need car and other loan amounts, credit card debt amounts, a non-custodial parent’s income, and your home value ( provides accepted estimates) minus your outstanding mortgage amount. Click here for the College Board tips and tutorial. No IRS Data Retrieval Tool is available here. You’ll complete all of the information manually. It costs $25 to submit the CSS Profile, plus $16 per copy if you need to send it to more than one school. Fee waivers are available.

Delays May Decrease Your FAFSA Aid

Double-check for accuracy. A small error on your application could cause processing delays, potentially decreasing your aid award. Approximately 30% of FAFSA filers are elected for verification, which can also cause delays. To avoid verification, use the IRS Data Retrieval Tool, which is considered verified data. If selected for verification, you’ll need to submit a signed copy of your tax return or a signed statement explaining why you don’t file a tax return. You’ll still need to have your previous year’s tax return and your student’s tax return/W-2 available to enter some additional details. Names and addresses need to match EXACTLY those on your tax returns, or your FAFSA acceptance may be delayed. You can save your FAFSA application and return later to complete—just don’t forget to finish!

Expected Family Contribution (EFC)

The Expected Family Contribution (EFC) is calculated by subtracting the student’s demonstrated need from the school’s cost of attendance (COA). This amount, calculated from the FAFSA, is the portion of your student’s college education that the government believes you can afford. Household size, number of students in college, student income/assets, parent income/assets and age are all considered. The EFC Formula is adjusted each year by the U.S. Department of Education. Click here for details of the 2022-23 Formula. Calculate your own EFC for each school using the calculator found on each school’s website (many school sites listed here), or click here for an EFC estimate from the College Board calculator. The lower your EFC, the higher your need-based aid offer probably will be.

FAFSA Application Tips

  • When selecting schools to receive your FAFSA info, (counselors recommend sending to the full 10 allowed), search by state first, and then select the school. Some schools list every college under their name—be careful to select the main institution. If you want to send to more than 10 schools, wait until you receive confirmation your FAFSA application has been processed or mailed to those schools, then log in again, delete the previous schools, add the new list, and re-submit.
  • The FAFSA assesses 20% of student assets, while the rate is 5.64% for parents. Therefore, parents should not save college money in their accounts belonging to their student.
  • A student who lives over 50% of time with the parent with lower income will have a lower EFC. The FAFSA does not collect income/home equity/assets from the noncustodial parent.
  • Avoid income boosts during college years such as cashing out retirement plans and stock options.
  • The FAFSA4caster is a tool to provide an early estimate of eligibility for aid. You still must file an actual FAFSA form to be eligible for federal student aid.
  • The U.S. Department of Education offers several resources including a step-by-step timeline and a preview worksheet at this link:
  • You can also call the FAFSA Hotline at 800-4FEDAID (433-3243) or get help from the Federal Student Aid Information Center.

With your FAFSA application filed, you’re on your way to becoming a college graduate with minimal debt.