FAFSA Mistakes To Avoid
By Joe Messinger, CFP®
September 30, 2022
The FAFSA is open and ready to be filled out today, October 1, 2022!
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 (as well as 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 (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.
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, it’s still crucial that you and your students fill out the form. A completed FAFSA is required for federal student loans – so even if you don’t qualify for aid, it’s important! 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 to complete the FAFSA.
The pot of money at most colleges is limited. Once it is gone, it is gone. First come, first served. Waiting until the deadline is acceptable, but truth be told, the earlier you fill it out, the better.
3) Not knowing deadlines.
Speaking of deadlines, it’s important to know them! The FAFSA has federal, state, and college filing deadlines.
The FAFSA opens on October 1st for the fall of 2023, and you can check federal and state deadlines on the FAFSA website by clicking here.
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 of busy families. 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.
There are several mistakes that are common on FAFSA forms. A few key tips are:
- Be sure to type Social Security numbers and other identifying information 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 of parents and students.
- Understand how divorced parents file.
- Don’t put parent numbers in student fields.
If you have questions about your FAFSA, working with a financial planning team that specializes in college-bound families and their unique needs can help.
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.
8) Forgetting to include all of 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 the FAFSA out online should take less than an hour. Save time with these helpful tips:
- Know what forms and information you need to complete the FAFSA before you start. Studentaid.gov lists everything you need to get started here.
- Create your FSA ID before you begin.
- Leverage the IRS Data Retrieval Tool.
- Know what your expected out-of-pocket costs may be before receiving financial aid offers by using Capstone Wealth Partner’s free College Money Report™.
Have questions? Reach out! Our team is here to help.
Originally published 10/2018
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