FAFSA – What do those letters mean anyway?! And 4 important filing tips to keep in mind
By Joe Messinger, CFP®
June 2, 2015
Since this piece was written in June 2015, the FAFSA filing deadlines have changed. Please refer to our more recent blog by clicking here for the latest information.
If you are the parent of a college-bound student, FAFSA will become a necessary acronym to know during your college search and throughout your student’s college years. FAFSA stands for Free Application for Federal Student Aid, a Federal Student Aid filing, and is used to calculate a family’s Expected Family Contribution (EFC) toward college expenses.
FAFSA is used to evaluate every college student’s financial state and determine which students are eligible for need-based aid. The FAFSA takes a snapshot in time of a family’s size, income, and assets. If you are the parent of a high school senior, you’ll need to complete the FAFSA starting after January 1st of your student’s senior year. You’ll also need to complete the FAFSA every year the student continues in college.
Recently the U.S. Department of Education changed their security measures for accessing the FAFSA system. In the past, students and parents created PIN numbers to access their online application and make changes. Starting in May 2015, students and parents are required to create a FSA ID login with a username and password in an attempt to do away with the input of social security numbers online. If you have used a PIN in the past, you will be asked to link the PIN to your new FSA ID during its creation. Visit https://fsaid.ed.gov/ to create IDs.
Here are 4 key filing tips for you to keep in mind:
- The “Priority Filing” deadline for many schools is as early as February 1st of the senior year. Submitting your FAFSA by the deadline ensures your student will get the maximum award the college has to offer. For many families this deadline may be before the completion of your taxes due in April of each year. If you are completing the FAFSA in the beginning of 2016, the income numbers you will use are from your 2015 tax return. If your tax return has NOT been completed at the time of your FAFSA submission, you are encouraged to use estimated numbers. If your financial circumstance have not changed dramatically, we recommend referencing your prior year’s tax return for a reasonable estimate. Later after your taxes have been filed, you can submit a final FAFSA with your actual numbers.
- Even if you KNOW your family will not qualify for need-based aid, you still should fill out the FAFSA every year. Many colleges require the FAFSA be completed even if your student is receiving merit aid based on their academics. In addition having a FAFSA on file can be very helpful if your status changes at some point during the year affecting your financial aid status.
- Many families can take advantage of the Data Retrieval Tool available through the online FAFSA application (https://fafsa.ed.gov/). The tool pulls the actual numbers from your federal tax return and inputs them into the online worksheet—saving you time and preventing mistakes. If you filed estimated numbers early, use the Data Retrieval Tool to update the numbers two to three weeks after you file your federal tax return.
- We can’t repeat too many times—keep track of deadlines. Much of the financial aid available at colleges is given out on a first come first serve basis. Pay attention to deadlines so you don’t miss out.
This information will get you started with some tips on filing the FAFSA. Ready for FAFSA Part 2 – The Sequel? Keep reading for more specific planning measures you can take and actionable ways to get the most financial aid when completing the FAFSA.