Family and Finances: How to Ace the FAFSA

The Free Application for Federal Student Aid (FAFSA) is a tool that students use to apply for more than $120 billion in federal funds. Unfortunately, each year many students miss out. A report from NerdWallet estimates that $1,861 per eligible high school graduate went unused in free federal grant money during 2014 because they did not complete a FAFSA.

Even if you don’t think you or your child qualify for federal aid, filling out a FAFSA is important because it could be used to determine eligibility for nonfederal aid and private funds.

“This nonfederal aid includes things like academic or merit scholarships,” notes Julie Strohlein, CPA.  “Many schools require a FAFSA before considering a student for any award, even one that is not need-based.”

New FAFSA availability date: October 1, 2017

Previously, the FAFSA was not available until January. A recent change now makes the application available October 1, 2017. This is because the 2018-19 FAFSA can be completed with your 2016 tax information.

“This new timing is important,” adds Julie. “ Before, applicants had to scramble to hurry up and get their tax returns completed as soon as possible after New Year’s Day.  This was impossible for many taxpayers who have complicated tax situations or numerous investments that require them to get an extension each year.  Since extended returns are due on October 15^th, all taxpayers should have a completed tax return shortly after the FAFSA becomes available on October 1^st.”

Avoid FAFSA mistakes

Don’t forgo federal student aid by making one of the following 3 common filing mistakes when filling out the FAFSA for your child.

Mistake #1: Not reading the instructions or questions

Tip: Answer all questions – even if the answer is zero. If left blank, the question will be considered unanswered. Here are some quick tips:

• Write dollar amounts without cents.
• Understand the definitions of key FAFSA language including: legal guardianship, parent and household size.
• “You” and “your” refer to the student, not the parents.
• Provide parent information if you or your child is considered a dependent student.
• Use the available resources, FAQs and FAFSA Information Center.

Mistake #2: Incorrect, incomplete or non-matching data

Tip: Complete the FAFSA online. Although you can complete the FAFSA on paper, it takes only 3-5 days to process when submitted electronically. The online version has built-in safeguards that identify and prevent many errors. Plus, the IRS Data Retrieval Tool can import information directly from your tax return. Logging in with a Federal Student Aid (FSA) ID will automatically load basic information (e.g., name, DOB, Social Security number), reducing the likelihood of typos. You even receive confirmation of receipt once you submit your online application.

Mistake #3: Not filing on time

Tip: Note the earlier FAFSA filing date and get the application submitted as soon as possible. The sooner you or your child gets started, the higher the likelihood of being awarded funds since many are distributed on a first-come, first-served basis.

“For high school seniors, filing the FAFSA may happen before applying to college!  Since many college applications are not due until November or later, the FAFSA may be done first.  It doesn’t matter if the student doesn’t yet know where they will go to school.  The FAFSA is asking about the family’s finances, not the cost of the college.  The same FAFSA form is used by almost all colleges when determining aid, so filling it out early (and correctly) is a great idea.” – Julie

Remember, students need to complete a FAFSA each year because eligibility does not carry over and can vary based on circumstances. Students can use the FAFSA Web Worksheet now to gather and organize the data needed for their application.

The information contained in this newsletter is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. For more information or for assistance with any of your tax or business concerns, contact our office at 856.667.4100.