FAFSA Mistakes To Avoid
By Joe Messinger, CFP®
October 9, 2020
FAFSA is open and ready to be filled out! This year, according to the U.S. Department of Education, fafsa.gov has enhanced help topics by providing images of the form along with relevant line numbers to help students navigate the form. Now let’s take a closer look at the mistakes you want to avoid while filling out your application.
What is the FAFSA? A quick summary
Parents of seniors (and returning college students) complete the Free Application for Federal Student Aid (FAFSA) every year. It is an online application used to determine a family’s Expected Family Contribution or EFC. The EFC is determined based on a federal formula to measure a family’s financial strength and ability to pay for college.
The phrase “expected family contribution” is a little misleading. The EFC figure is not the amount a family is expected to pay each year. In reality, it is a number used by colleges to determine whether a student qualifies for need-based aid.
The FAFSA is the tool used to collect all the parent and student financial and demographic data to make this calculation.
Take advantage of these deeper dives into the FAFSA and EFC:
7 EFC Myths Debunked
Answers to Some FAFSA FAQ
Considerations for divorced parents
Getting the Most Need-Based Financial Aid You Can
9 things you should know about the CSS PROFILE® (an alternative to the FAFSA)
FSA ID instructions
9 Common FAFSA Mistakes
1) Not filling it out!
Each year, “millions of students who would have qualified for college grants still fail to file the FAFSA.” Even if parents think they won’t qualify for need-based aid, fill it out. A completed FAFSA is required for federal student loans. It is also used by states, colleges, and some private scholarship providers. In addition, a family’s financial status may change mid-year due to job loss or health issues. Having an original FAFSA on file helps when contacting the financial aid office for a review mid-term.
2) Waiting too long
The pot of money at most colleges is limited. Once it is gone, it is gone. First come, first served.
3) Not knowing deadlines
The FAFSA has federal, state, and college filing deadlines. For the 2020/2021 student term, the federal deadline is June 30, 2021, and the state of Ohio deadline is October 1, 2020. However, the college deadlines can be substantially earlier than these dates–February or March. But don’t forget #2 above, the earlier the better so why wait?! (Not in Ohio? Click here and scroll down to search for your state’s deadline.)
4) Not filling it out every year
The FAFSA completed by high school seniors who are starting college next fall is the most important. However, it is a good idea to file each year of a student’s college career for many of the reasons given in #1 above.
5) Paying someone to file on your behalf
Beware of scam companies out there who want to take advantage. The first word in FAFSA is “free.” You do not need to use a website that charges you for the service. Sites can be confusing so remember to always use www.fafsa.ed.gov.
6) Making mistakes on the form
Be sure to type the social security number correctly. Don’t leave fields blank (use a 0 if needed). Be sure to understand the definitions of the terms like household size, marital status, etc. used on the FAFSA. Use the actual legal names for parents and students. Understand how divorced parents file. Don’t put parent numbers in student fields.
7) Not using the Data Retrieval Tool
If you are eligible, take advantage of the Data Retrieval Tool (DRT). The DRT pulls the figures from your 1040 tax return and plugs them into the correct fields on the FAFSA for you. Doing this will avoid entry mistakes or misunderstanding which numbers go where. However, be aware that due to security issues in the past, you won’t be able to physically see those numbers displayed. It will say “Transferred from the IRS” instead of the actual number. (Click here for the list of reasons a student would not be eligible to use the DRT.)
8) Forgetting to include all the colleges the student is applying to
Unless a student is only applying to one school, include all the colleges on your list. The list does not impact any financial aid determinations.
9) And last but not least, forgetting to sign it!
Dependent students and their parents both need to sign the FAFSA with their FSA ID.
Just do it!
The FAFSA is a detailed but not overly laborious process. The whole process from gathering the documents to filling it out online should take less than an hour. (Click here for a list of the documents you’ll need.)
Originally published 10/2018
November 27, 2020
November 6, 2020