Your Guide to the FAFSA Application

Oct 25, 2022 | Articles, FAFSA, Financial Aid & Scholarships | 0 comments

Your Guide to the FAFSA Application

Your Guide to the FAFSA
(Free Application for Federal Student Aid)

The FAFSA application is important for both need-based and merit aid. Use this guide to help complete your FAFSA to maximize both. 

Who? Nearly all students enrolling in a post-high school education program should complete the FAFSA. Even if your family’s income and assets prevent receiving need-based aid, be aware that some merit-based scholarships require completion of the FAFSA and that accessing National Direct Student Loans requires completion of the FAFSA.

When? FIll out the FAFSA during early October of senior year of high school and each October that your student plans on enrolling in college the following year.

Why? To be eligible for any student need-based aid— grants, work-study and loans—requires filling out the FAFSA. Many states, colleges, and even private foundations also use the FAFSA to determine qualifications for merit awards. Here are more reasons.

Where?  Apply for free online at https://studentaid.gov/h/apply-for-aid/fafsa.

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. 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

More than $3.75 billion in potential aid to an estimated 813,000 college students went unawarded in 2021. FILL OUT THE FAFSA!

To ensure more students receive aid, some states (Illinois, Louisiana, Texas, and others) mandate FAFSA completion as a high school graduation requirement.

Fill out the FAFSA early, in October

  • Early FAFSA completion (October of senior year!) helps conclude all your application requirements earlier to schools, and earlier applicants, especially at public universities, may see more generous financial aid than those who apply later in the fall. 
  • 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. Write down your FSA ID and password AND your student’s (you’ll need to create separate ones) and keep them 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 sophomore year through December 31 of your student’s junior year (calendar year 2020 for 2022 incoming freshmen). Calendar year 2021 will be considered for financial aid for this student’s sophomore year in college.
  • 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 simple. For business owners and independent contractors, you may need to visit with your financial advisor.
  • Filling out the FAFSA requires bank statements, records of investments, federal income tax returns, W-2s, and records of any untaxed income.

CSS Profile

  • About 250 institutions, many of them private colleges, require a second form called the CSS Profile, created by the College Board.
  • To complete a CSS Profile, sign in with your College Board login. You’ll need car loan amounts and other loan amounts, credit card debt amounts, your home value (www.zillow.com provides accepted estimates), and non-custodial parent income information. Click here for the College Board tips and tutorial.
  • No IRS Data Retrieval Tool is available for the CSS Profile. You’ll complete all of the information for the CSS Profile manually.
  • The CSS Profile costs $25 to submit, plus $16 per copy if you send it to more than one school. Fee waivers are available.

Delays May Decrease Your Aid

  • Double-check for accuracy. An error on your application could cause processing delays, potentially decreasing your aid award.
  • Approximately 30% of FAFSA filers are chosen for verification, which can also cause delays. 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. To avoid verification, use the IRS Data Retrieval Tool, which is considered verified data.
  • 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 work on your FAFSA and return later to complete it—just don’t forget to finish!

Expected Family Contribution (EFC)

  • The U.S. Department of Education determines your Expected Family Contribution (EFC) by reviewing your FAFSA. Your EFC is the government’s estimate of the amount you can afford to pay for your student’s college in the coming year. Most families feel their EFC is higher than it should be.
  • The school’s cost of attendance (COA) minus your family’s EFC is your demonstrated need. Colleges may not award need-based aid that exceeds your demonstrated need. Often colleges make need-based aid offers well below a family’s demonstrated need. 
  • To determine the EFC, household size, number of students in college, student income/assets, parent income/assets, and are all considered. The U.S. Department of Education adjusts the EFC Formula each year. Click here for the 2022-23 Formula.
  • Calculate your own expected cost 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. Again, schools often do NOT grant the aid necessary so that your actual net cost equals your EFC; your eventual cost is usually higher than your EFC– one reason you’ll want schools that fit your budget, schools that also offer merit-based scholarships.

FAFSA Application Tips

  • Avoid These FAFSA Mistakes
  • When selecting schools to receive your FAFSA info, search by state first, and then select the school. Be careful to select the correct institution. If you submit to more than ten schools, wait until you receive confirmation that your FAFSA has been processed, then log in again, delete the previous schools, add the new list, and re-submit.
  • To determine the EFC, the FAFSA assesses 20% of student assets and 5.64% of the parents’ assets. Therefore, if seeking need-based aid, students should not accumulate significant net worth, unless it’s in a retirement account, which is never considered for the EFC.
  • If the parents are divorced, the student should live over 50% of the time with the lower-income parent because the FAFSA does not consider home equity/assets/income from the noncustodial parent. However, the CSS Profile does.
  • Avoid income boosts during college years, such as cashing out retirement plans and stock options.
  • The FAFSA4caster provides an early estimate of eligibility for need-based aid. But you still must file an actual FAFSA form to be eligible for federal student aid.
  • The U.S. Department of Education offers a step-by-step timeline and a preview worksheet.
  • You can call the FAFSA Hotline at 800-4FEDAID (433-3243) or get help from the Federal Student Aid Information Center.