As high school seniors and college students, you can’t avoid the topic of the FAFSA. But what is it, why is it important, what are the timelines and what do you need to do?
FAFSA stands for the Free Application for Federal Student Aid. The FAFSA is the only way to apply for federal student aid, such as federal grants, work-study, and loans. As the name suggests, the process is free so don’t fall victim to online scams that ask for payments for submitting the FAFSA. In addition to applying for Federal Aid, the FAFSA is also used by most schools when determining need based financial aid. So the FAFSA is very important for funding college.
The first thing you need to do in the FAFSA process is get an FSA ID. This is an account that identifies you and your parents in the FAFSA process. You and your parents will both need to create FSA ID’s. You can create or retrieve the account here. After you have your FSA ID, you can fill out the form.
The FAFSA website says that it should only take one hour to fill out the form, but in practice you should probably allocate more time. You will need to do this with your parents – it’s not something that you can do on your own. There is a process where you and your parents can complete the form separately, but it’s not easy. The info you’ll need to complete the FAFSA are:
- Your and your parents’ Social Security Numbers
- Your and your parents’ Alien Registration Number (if you or they are not a U.S. citizen)
- Your and your parents’ federal income tax returns, W-2s, and other records of money earned.
- Your and your parents’ Bank statements and records of investments (if applicable)
- Your and your parents’ Records of untaxed income (if applicable)
- Your and your parents’ FSA ID to sign electronically.
It’s not a long list, but pulling all that info together can take some time. To make things a little easier there is an IRS Data Retrieval Tool which pulls your tax return info directly from the IRS. It’s very helpful and most students can use it but some are excluded. You can view the types of students who are ineligible to use the tool but basically if your parents filed separately then it won’t pull in both accounts, so you can’t use it.
Figuring out when to submit your FAFSA application can be more confusing than actually filling out the form. Every school has different deadlines for when student aid forms must be submitted so make sure you submit earlier than those deadlines. The traditional thinking on applying for FAFSA is to submit your application as soon as possible. This is because some states and schools offer Financial Aid on a first come, first serve basis. This means that aid goes out to the students who submitted first. So if you submit your FAFSA later, even though you are eligible for aid, there may not be any left. That being said, there is also a line of thinking which says that you should wait later so that you can get your parents finances in order before applying – because the formulas for aid take into account debt, savings and investments. While that is true, the worst possible thing to do is to not submit the application. The first date you are allowed to submit a FAFSA is 01 October. Tell your parents to get their finances figured out before that date and then apply as early as possible after that 01 October date. That will let you meet both suggestions.
One last, and very important thing to remember… you need to submit the FAFSA every year – every single year you are in college. Don’t forget! Your federally backed loans or grants are only for one year, so you need to renew them each year. Schools will usually re-evaluate financial aid needs yearly as well. There is a renewal process for the FAFSA which speeds up the process a little, but again allocate enough time to do this properly because it’s important.
FAFSA has a great help page where you can find all this and more info.
The FAFSA isn’t a four-letter word and you don’t need to be afraid of the process. It’s just a bureaucratic process for figuring who gets aid. Like most things in the government it’s lengthy, slow and probably a little more complicated than it needs to be but it is an extremely important part of paying for college.
October First – Every Year – Don’t Forget!
All of this info was gathered from the FAFSA website. The photo at the top is attributed to P.ymcphone as part of a U.S. News and World Report article College Funding 101: Demystifying the Financial Aid Process.